EXHIBIT 10.1

                                                               LOAN AGREEMENT

                This Agreement is effective the 31st day of December, 2010, among American Bank, N.A. ("Lender"), and TOR Minerals International, Inc., ("Borrower").

SECTION ONE: LINE OF CREDIT

                1.01 Line of Credit . Subject to the further terms and provisions hereof, Lender agrees to and does hereby grant to and establish in favor of Borrower a revolving line of credit in the amount of $1,000,000.00 under which Lender shall be committed to make loans or advances to Borrower from time to time; provided, Lender shall never be required to make any advance under such line of credit when such advance together with the principal amount then unpaid and owing under the line of credit by reason of previous advances would exceed the amount which Lender is then committed to loan based on the loan value (also known as "Borrowing Base") of collateral pledged to Lender as set forth in SECTION THREE hereof. Further provided, in no event shall the Lender ever be required to make any advance to Borrower under the line of credit when such advance, together with the principal amount then unpaid and owing under the line of credit by reason of previous advances, would exceed said $1,000,000.00 amount.  Said line of credit is sometimes hereafter referred to as the "line of credit".  Further, the line of credit shall terminate on July 1, 2012, and on and after such date the Lender shall not be obligated to make any additional advances on the line of credit.

                1.02 Repayment of the Line of Credit . Principal advanced and owing under the line of credit shall be repayable in accordance with the terms hereof, but in any event on July 1, 2012.  Interest accrued and owing on advanced and unpaid principal shall be due and payable monthly on the first day of each month and at maturity. In order to evidence the obligation to repay Lender all advances, together with interest thereon, made by Lender pursuant to the said line of credit, Borrower shall execute and deliver to Lender a Revolving Credit Promissory Note.

                1.03 Interest Rate on Line of Credit . All amounts advanced hereunder on the line of credit loan shall bear interest, prior to maturity from the date advanced until repaid, at a variable rate which is to be determined from time to time and which is equal to one percent (1%) per annum above the Wall Street Journal Price Rate as such prime rate changes from time to time, not to ever be less than 5.5% per annum, nor to exceed the legal maximum that may be paid by Borrower, and as otherwise set forth in the said form of Revolving Credit Promissory Note. Matured principal and accrued interest shall bear interest until paid at the rate set forth in said Note.

                1.04 Conditions Precedent . The performance of every covenant to be performed by Borrower, and the truth of every representation made by Borrower, shall be a condition precedent to each and every advance to be made by Lender under the terms hereof, or to any other obligation whatsoever of Lender under the terms hereof; and, Lender shall not be required to make any advance to Borrower at a time that Borrower is then in default on any obligation to Lender, or in default hereunder or under any instrument executed pursuant hereto.

SECTION TWO: TERM LOAN

                2.01 Term Loan.   Lender agrees to loan to Borrower, as a term loan, the sum of $2,000,000.00.

                2.02 Repayment of Term Loan .  The term loan shall be for a term of sixty (60) months, with monthly payments based on a 60-month amortization. In order to evidence the term loan, Borrower shall execute and deliver to Lender a Promissory Note in the amount of the term loan. There shall be a 2.0% prepayment penalty if the loan is refinanced with a third party lender.

                2.03 Interest Rate on Term Loan .  The term loan shall, prior to maturity, bear a fixed interest rate of 6.65% per annum, and as set forth in the Promissory Note.

SECTION THREE: FUNDING AND ADVANCES ON LINE OF CREDIT

                3.01 Borrowing Base . The amount which Borrower is entitled to borrow from time to time under the line of credit shall be the then current loan value of collateral (the "Borrowing Base") pledged to Lender to secure indebtedness owing to Lender by Borrower, provided that in no event is Lender to be required to make any advance which would cause the outstanding principal balance owing by Borrower at any one time to be in excess of $1,000,000.00.  The Borrowing Base shall be redetermined monthly and shall be seventy-five percent (75%) of eligible accounts receivable arising out of Borrower's United States operations pledged to the Lender. The term "eligible accounts receivable" shall mean all billed gross trade accounts receivable, less: (a) balances due sixty (60) days or more after the date of the original invoice therefor; (b) accounts owed by companies related to or affiliated with Borrower or the Guarantors or owed by its employees or by Borrower's employees; (c) except for receivables from BASF SE, accounts owing by any one debtor which exceeds twenty percent (20%) of the total billed gross accounts receivable; (d) all accounts owing by any particular debtor if 10% or more of such particular debtor's accounts are ninety (90) days or more past due; and (e) accounts receivable which are disputed by the account debtor. 

                3.02 Monthly Redeterminations . Based on the monthly reports of accounts receivable to be provided by Borrower, the Borrowing Base will be redetermined monthly. In the event the principal balance owing on Borrower's line of credit note exceeds the Borrowing Base as such is redetermined, then Borrower will make such payment on the note as is necessary to reduce the principal balance to an amount equal to or less than the redetermined Borrowing Base, such payment to be made within five (5) days of the furnishing of the monthly listings report from which the Borrowing Base was redetermined.

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SECTION FOUR: SECURITY

                4.01 Collateral . The loan provided hereunder and all other indebtedness now or hereafter owing by Borrower to Lender shall be secured by first liens on all present and future accounts, goods and general intangibles of Borrower located in the United States or arising out of its U.S. operations and as set forth in that certain Security Agreement dated of even date herewith executed by Borrower in favor of Lender (the "Security Agreement").

SECTION FIVE: FURTHER COVENANTS, CONDITIONS AND REPRESENTATIONS

                5.01 Representations . In addition to the other covenants and representations herein, Borrower makes the following representations, covenants, or agreements to Lender, which representations, covenants, or agreements Borrower covenants to keep during the time that any indebtedness to be loaned to Borrower pursuant hereto remains unpaid (including renewals and extensions), to-wit:

                (a)           That it is a corporation duly organized and existing under the laws of the State of Delaware;

                (b)           That it is authorized to execute this Agreement and the various instruments to be executed pursuant hereto;

                (c)           That it has corporate authority and power to own its property and conduct its business as it is currently carried on;

                (d)           That the performance of its obligations under this Agreement will not conflict with any provision of law, nor with the Certificate of Incorporation and Bylaws of the corporation, nor with any contractual agreement binding on the corporation;

                (e)           That it will pay all taxes, assessments and other liabilities, as and when same become due except as they are contested in good faith; and

                (f)            That it will not become a party to any merger or consolidation nor will  it sell, transfer, convey or lease all or substantially all of its  business assets, nor will it purchase or otherwise acquire all or  substantially all of the business assets of any other corporation or entity except as approved in writing by Lender.

                5.02 Financial Condition . The Borrower represents that, at the present time, it is not a party to any material pending or threatened litigation, nor a party to any proceeding or action for the assessment or collection of a material amount of additional taxes, and that it does not know of any material contingent liabilities not provided for or disclosed in the financial statements heretofore provided Lender.  The Borrower also represents to Lender that the latest financial statements furnished heretofore to Lender fairly represent its financial condition for the period as of the date stated, all in accordance with generally accepted accounting principles consistently applied; and that no substantial adverse changes have occurred since the date of the last financial statement furnished to Lender.

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                5.03 Covenants .  Until all of the line of credit and term loan are paid in full, unless otherwise agreed to in writing by Lender, Borrower agrees to maintain the following covenants, and failure to maintain each and all of the following covenants shall be considered an event of default (subject to the provisions of Section 6 below) under any loans hereunder:

                a.             Cash Flow Coverage Ratio .  Borrower will maintain a ratio of cash flow to debt service of at least 1.25 to 1.0 measured on a rolling four quarter basis beginning with the four quarter period ending December 31, 2010. For purposes of making this calculation, debt service shall be defined as net income after all applicable state and federal income taxes plus interest expense, depreciation, amortization and any other non cash expenses less any dividends or distributions. Debt service to defined as all regularly scheduled principal and interest payments due and payable in the period being tested.

                b.             Additional Borrowings . Borrower shall not incur any additional indebtedness (including capital leases but excluding trade credit in the normal course of business) in excess of $500,000.00.

                c.             Guarantys .  Borrower will not become a guarantor or surety, or pledge its credit on any undertaking of another, or make loans or advances to any other, except trade credit extended in the normal course of business.

                d.             Ownership/Management .  There shall be no change in the President or Board of Directors of Borrower without Lender's written consent.

Unless otherwise specified, all accounting and financial terms and covenants set forth above are to be determined according to generally accepted accounting principles, consistently applied.

                5.04.       Reporting Requirements .  Until all the line of credit and term loan are paid in full, Borrower agrees to furnish to Lender reports and statements as set forth below, and failure to furnish any such reports and statements shall be considered an event of default (subject to the provisions of Section 6 below) under each of the Loans and Notes:

                a.             Monthly Financial Statement for Borrower .  Borrower shall furnish to Lender within 30 days after the end of each month, a balance sheet and income statement as of the end of such fiscal month, all in form and substance and in reasonable detail satisfactory to Lender, such monthly financial statements being prepared according to GAAP.

                b.             Annual Financial Statements for Borrower .  Borrower shall furnish within 120 days after the end of each fiscal year a financial statement of Borrower as of the end of such fiscal year, in each case audited by independent public accountants acceptable to Lender.  Each annual financial statement shall include a balance sheet, operating/income statement, contingent liabilities, statement of cash flows, comparison to budget and a reconciliation of retained earnings and net worth, and be in a form suitable to the Lender.

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                c.             Tax Returns .  Borrower shall furnish Lender a copy of each Federal income tax return with 30 days after the filing of such. 

                d.             Accounts Receivable Reports .  Borrower shall furnish to Lender within fifteen (15) days following the end each calendar month a listing of all trade accounts receivable from U.S. operations with ageing, such listings to be as of the close of business at the end of such calendar month.  Such listings shall include customer name, address, invoice number, date of invoice and amount owing thereon.

                e.             Notice of Litigation .  Promptly after the service of process or written notice received by Borrower, the Borrower shall notify Lender of all actions, suits and proceedings before any court or any governmental department, commission or board affecting Borrower or any of its properties.

                f.             Notice of Material Adverse Change .  Promptly inform Lender of (i) any and all material adverse changes in Borrower's financial condition, and (ii) all claims made against Borrower which could materially affect the financial condition of Borrower.

                g.             Compliance Certificate .  Borrower shall furnish a certificate signed by its Chief Financial Officer within 15 days after the end of each month, stating that Borrower is in full compliance with all of its obligations under this Agreement and any and all other loan documents relating to the Loans and Notes, and is not in default of any term or provisions hereof or thereof, and demonstrating compliance with all financial ratios and covenants set forth in this Agreement. The certificate of compliance shall accompany the monthly accounts receivable listings.

SECTION SIX: DEFAULT

                6.01 Events of Default . In addition to any other provision for acceleration of maturity contained in notes and collateral instruments to be executed by Borrower, and after the notice of default and opportunity to cure set forth in the Notes evidencing the term loan and the line of credit, Lender at its election may declare all sums owing by Borrower immediately due and payable upon the happening of any of the following events:

                (a)           Lender shall determine that any material representation or warranty by Borrower herein or elsewhere contained, or any material representation or warranty contained in any collateral instruments required hereunder shall not be correct in any respect; or

                (b)           Default by Borrower in the payment of any obligation owing Lender; or

                (c)           Failure of Borrower to timely perform any act or duty, comply with any agreement or covenant or furnish any report required under the terms of this Agreement or under the terms of any note, security agreement or other instrument to be executed pursuant hereto.

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SECTION SEVEN: MISCELLANEOUS

                7.01 Survival of Representations .  All representations, covenants or warranties of Borrower shall survive the execution and delivery of this Agreement and any notes, security agreements or other instruments executed and delivered pursuant hereto; and no investigation by Lender, nor information it might have determined from any other source available to it, shall diminish or otherwise affect the right of Lender to rely on such representations and warranties and to enforce same.

                7.02 Non-Merger . The covenants contained in the instruments made a part hereof by reference which are to be executed from time to time in connection with this loan are expressly adopted as covenants between the parties hereto as a part of this Agreement. The provisions of this Agreement shall not be merged into the execution of any note, mortgage or other instrument executed pursuant hereto, but shall continue to define the relationship of the parties hereto even after the execution of such instruments. The covenants contained in this Agreement are not in lieu of covenants contained in the instruments to be executed in connection herewith even though they may pertain to the same subject matters; rather, said covenants shall be cumulative of each other and shall be construed so as to not result in a conflict of terms, if possible, and only if a conflict cannot be so avoided will it then be considered that the express provisions of this Agreement shall be given controlling effect.

                7.03 Assignability . The rights of Borrower hereunder shall not be assignable without the express prior written consent of Lender. Lender shall have the right to assign its rights hereunder and assign any and all notes executed in favor of Lender hereunder, as well as the right to assign undivided interests therein.

                7.04 Non-Waiver . No delay on the part of Lender or its assigns in the exercise of any rights shall operate as a waiver, nor shall any single or partial exercise of any right preclude the other or additional exercise of any right. In the event of any default, and after notice of default and opportunity to cure as set forth in the Notes, Lender may enforce its security interests as to such collateral as it may elect in accordance with the terms of the Security Agreement. Its election to foreclose its lien on a particular collateral shall not be a waiver of its right to foreclose its lien in any other collateral. Only when all indebtedness owing Lender by Borrower has been fully paid will Lender ever be required to release any collateral.

                7.05 Amendment . This Agreement shall not be amended except in writing signed by the parties.

                7.06 Other Documents . In addition to the instruments specifically mentioned herein, Borrower shall execute and deliver such other and further documents deemed necessary by Lender to evidence and secure the indebtedness of Borrower to Lender contemplated herein, and to otherwise effect the transactions herein contemplated.

                7.07 Expenses . Borrower agrees to pay all reasonable expenses and fees, including attorneys' fees, incurred by Lender in connection with the making of the loan referred to herein as well as all other reasonable expenses incurred by Lender in connection herewith.

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                7.08 Certificates . Prior to the first advance hereunder, Borrower shall furnish Lender certified copies of resolutions adopted by its Board of Directors authorizing or ratifying Borrower's entering into this Agreement and the transactions herein contemplated; and shall also furnish a certificate of good standing from the State Comptroller.

                7.09 Notices .  All notices, requests, demands or other communications required or permitted to be given pursuant to this Agreement shall be in writing and given by (i) personal delivery, (ii) expedited delivery service with proof of delivery, or (iii) United States mail, postage prepaid, registered or certified mail, return receipt requested, sent to the intended addressee at the address set forth below and shall be deemed to have been received either, in the case of personal delivery, as of the time of personal delivery, in the case of expedited delivery service, as of the date of first attempted delivery at the address and in the manner provided herein, or in the case of mail, upon deposit in a depository receptacle under the care and custody of the United States Postal Service.  Either party shall have the right to change its address for notice hereunder to any other location within the continental United States by notice to the other party of such new address at least thirty (30) days prior to the effective date of such new address.  The addresses of the parties are as follows:

6.10 Binding . This Agreement shall be binding on the parties hereto, and their respective heirs, representatives, successors and assigns; and shall inure to the benefit of Borrower and of Lender and Lender's successors and assigns.

EXECUTED in multiple originals the date first set forth above.

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THIS WRITTEN LOAN AGREEMENT AND THE PROMISSORY NOTES, SECURITY AGREEMENTS, GUARANTY AGREEMENTS AND OTHER LOAN DOCUMENTS EXECUTED BY THE PARTIES REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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EXHIBIT 10.2

                                                                              SECURITY AGREEMENT

                                                                                                                                                                  Date: December 31, 2010

A.    PARTIES

        1. Debtor: TOR MINERALS INTERNATIONAL, INC.                                                                                                      

                    Check one: [    ] individual  [     ] partnership  [  X  ] corporation  [    ] other

        2. Address: 722 Burleson Street, Corpus Christi, Texas 78402                                                                                          

           Address shown is [  X  ] place of business  [    ] chief executive office (if more than one place of business)  [    ] residence

        3. Secured Party: AMERICAN BANK, N.A.                                                                                                                         

        4. Address: P.O. Box 6469, Corpus Christi, Texas 78466                                                                                                   

                                (Information concerning this security interest may be obtained at the office of the Secured Party shown above).

B.    AGREEMENT

        Subject to the applicable terms of this Security Agreement, Debtor grants to Secured Party a security interest in the collateral to secure the payment of the obligations.  A carbon, photographic, or other reproduction of this Security Agreement may be filed as a financing statement.

C.    OBLIGATIONS

        1.     The following are the obligations secured by this Agreement:

                a.   All past, present, and future advances, of whatever, type, by Secured Party to Debtor, and extensions and renewals thereof.

                b.   All existing and future liabilities of whatever type, of Debtor to Secured Party, and including (but not limited to) liability for overdrafts and as indorser and surety.

                c.    All costs incurred by Secured Party to obtain, preserve, and enforce this security interest, collect the obligation, and maintain and preserve the collateral, including (but not limited to) taxes, assessments, insurance premiums, repairs, reasonable attorney's fees and legal expenses, feed, rent, storage costs, and expenses of sale.

                d.   Interest on the above amounts, as agreed between Secured Party and Debtor, or if no such agreement, at the maximum rate permitted by law.

2.    List notes included in the obligations as of the date of this Agreement (collectively referred to herein as the "Notes"):

a.     Promissory Note of even date in the principal sum of $2,000,000.00 executed by Debtor payable to the order of Secured Party.

b.      Revolving Credit Promissory Note of even date in the principal sum of $1,000,000.00 executed by Debtor payable to the order of Secured Party.

D.    COLLATERAL

        1.     The security interest is granted in the following collateral:

                All goods, accounts and general intangibles now owned or hereafter acquired by Debtor,  which are located in the United States or which arise from Debtor's operations in the United States, and all proceeds thereof.  Terms herein are as defined in Section 9.102 of the Texas Business & Commerce Code. Without limitation, the term "goods" includes equipment and inventory. Notwithstanding  the foregoing, collateral under this Agreement shall not include Debtor's ownership or other interests in TOR Minerals Malaysia, Sdn. Bhd. ("TMM") and TOR Processing and Trade, BV ("TPT"), any assets or operations of either TMM or TPT or any proceeds thereof, wherever or however held.

E.    AGREEMENTS OF DEBTOR

        1.     Debtor will: take adequate care of the collateral; insure the collateral for such hazards and in such reasonable amounts as Secured Party directs in amounts as are customary for companies in similar industries as Debtor, policies to be satisfactory to Secured Party; pay all costs necessary to obtain, preserve, and enforce this security interest, collect the obligation, and preserve the collateral, including (but not limited to) taxes, assessments, insurance premiums, repairs, reasonable attorneys' fees and legal expenses, feed, rent, storage costs, and expenses of sale; furnish Secured Party with any information on the collateral requested by Secured Party; allow Secured Party to inspect the collateral, and inspect and copy all records relating to the collateral and the obligation; sign any papers furnished by Secured Party which are necessary to obtain and maintain this security interest; assist Secured Party in complying with the Federal Assignment of Claims Act, where necessary to enable Secured Party to become an assignee under such Act; take necessary steps to preserve the liability of account debtors, obligors, and secondary parties whose obligations are part of the collateral; transfer possession of all instruments, documents, and chattel paper which are part of the collateral to Secured Party immediately, or as to those hereafter acquired, immediately following acquisition; perfect a security interest (using a method satisfactory to Secured Party) in goods covered by chattel paper which is part of the collateral; notify Secured Party of any change occurring in or to the collateral, or in any fact or circumstance warranted or represented by Debtor in this agreement or furnished to Secured Party, or if any event of default occurs.

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        2.     Debtor will not (without Secured Party's consent): remove the collateral from the locations specified herein; allow the collateral to become an accession to other goods; sell, lease, otherwise transfer, manufacture, process, assemble, or furnish under contracts of service, the collateral, except goods identified herein as inventory; allow the collateral to be affixed to real estate, except goods identified herein as fixtures.

        3.     Debtor warrants: no financing statement has been filed with respect to the collateral, other than relating to this security interest; Debtor is absolute owner of the collateral, and it is not encumbered other than by this security interest (and the same will be true of collateral acquired hereafter when acquired); none of the collateral is affixed to real estate or an accession to other goods, nor will collateral acquired hereafter be affixed to real estate or an accession to other goods when acquired, unless Debtor has furnished Secured Party the consents or disclaimers necessary to make this security interest valid against persons holding interests in the real estate or other goods; all account debtors and obligors, whose obligations are part of the collateral, are to the extent permitted by law prevented from asserting against Secured Party any claims or defenses they have against sellers, or can be so prevented by Secured Party taking action provided by law for such purposes.

F.    RIGHTS OF SECURED PARTY

        Secured Party may, in its discretion after default and notice to Debtor and opportunity to cure as set forth in the Notes: terminate, on notice to Debtor, Debtor's authority to sell, lease, otherwise transfer, manufacture, process or assemble, or furnish under contracts of service, inventory collateral, or any other collateral as to which such permission has been given; require Debtor to give possession or control of the collateral to Secured Party; indorse as Debtor's agent any instruments or chattel paper in the collateral; notify account debtors and obligors on instruments to make payment direct to Secured Party; contact account debtors directly to verify information furnished by Debtor; take control of proceeds and use cash proceeds to reduce any part of the obligation; take any action Debtor is required to take or otherwise necessary to obtain, preserve, and enforce this security interest, and maintain and preserve the collateral, without notice to Debtor, and add costs of same to the obligation (but Secured Party is under no duty to take any such action); release collateral in its possession to Debtor, temporarily or otherwise; take control of funds generated by the collateral, such as dividends, interest, and proceeds or refunds from insurance, and use same to reduce any part of the obligation; vote any stock which is part of the collateral, and exercise all other rights which an owner of such stock may exercise; waive any of its rights hereunder without such waiver prohibiting the later exercise of the same or similar rights; revoke any permission or waiver previously granted to Debtor.

        DEBTOR MAY FURNISH THE INSURANCE REQUIRED OF DEBTOR BY THIS SECURITY AGREEMENT EITHER THROUGH EXISTING POLICIES OWNED OR CONTROLLED BY DEBTOR OR THROUGH EQUIVALENT COVERAGE FROM ANY INSURANCE COMPANY AUTHORIZED TO TRANSACT BUSINESS IN TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER AS MAY BE APPROVED BY SECURED PARTY.  The premium or rate of charge for any insurance Secured Party is selling or procuring is not fixed or approved by the State Commissioner of Insurance.

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        FAILURE TO PROVIDE INSURANCE:  If Debtor fails to maintain any of the coverages described above, Secured Party may at its option, but without being required to do so, obtain collateral protection insurance coverage at Secured Party's option and Debtor's expense.  Secured Party is under no obligation to purchase any particular type or amount of coverage.  Therefore, such coverage shall cover Secured Party, but might or might not protect Debtor, Debtor's equity in the property, or the contents of the property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect; and Secured Party may be the only person named to be paid under any policy obtained by Secured Party.  In addition, the insurance obtained by Secured Party may not provide any liability protection for Debtor or property damage indemnification and may not meet the requirements of any financial responsibility laws.  Debtor acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Debtor could have obtained.

G.    MISCELLANEOUS

        The rights and privileges of Secured Party shall inure to its successors and assigns.  All representations, warranties, and agreements of Debtor are joint and several if Debtor is more than one and shall bind Debtor's personal representatives, heirs, successors, and assigns. Definitions in the Uniform Commercial Code apply to words and phrases in this agreement; if Code definitions conflict, Article 9 definitions apply.  Debtor waives presentment, demand, notice of dishonor, protest, and extension of time without notice as to any instruments and chattel paper in the collateral.  Notice mailed to Debtor's address in Item A2, or to Debtor's most recent changed address on file with Secured Party, at least five (5) days prior to the related action (or, if the Uniform Commercial Code specifies a longer period, such longer period prior to the related action), shall be deemed reasonable.

        DEFAULT

        1.     Any of the following is an event of default after notice of default and opportunity to cure as provided in said Notes: failure of Debtor to pay any note in the obligation in accordance with its terms, or any other liability in the obligation on demand, or to perform any act or duty required by this agreement; falsity of any warranty or representation in this agreement when made; substantial change in any fact warranted or represented in this agreement; involvement of Debtor in bankruptcy or insolvency proceedings, death, dissolution, or other termination of Debtor's existence; merger or consolidation of Debtor with another; substantial loss, theft, destruction, sale, reduction in value, encumbrance of, damage to, or change in the collateral; modification of any contract, the rights to which are part of the collateral; levy on, seizure, or attachment of the collateral; judgment against Debtor; filing any financing statement with regard to the collateral, other than relating to this security interest.

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        2.     When an event of default occurs, Secured Party may proceed to enforce payment of same and exercise any and all of the rights and remedies available to a secured party under the Uniform Commercial Code as well as all other rights and remedies. When Debtor is in default, Debtor, upon demand by Secured Party, shall assemble the collateral and make it available to Secured Party at a place reasonably convenient to both parties.  Debtor is entitled to any surplus and shall be liable to Secured Party for any deficiency.

I.     FIRST AND PRIOR LIEN

                This security interest grants to Secured Party, a first and prior lien to secure the payment of the notes and obligations listed herein, and extensions and renewals thereof.  If Secured Party disposes of the collateral following default, the proceeds of such disposition available to satisfy the indebtedness shall be applied first to the notes herein, and renewals and extension thereof, in the order of execution, and thereafter to all remaining indebtedness and obligations secured hereby, in the order in which such remaining indebtedness and obligations were executed or contracted.  For the purpose of this paragraph, an extended or renewed note will be considered executed on the date of the original note.

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EXHIBIT 10.3

                                                             REVOLVING CREDIT PROMISSORY NOTE

$1,000,000.00                                                                                                                                                  December 31, 2010

                For value received TOR Minerals International, Inc., a Delaware corporation (hereinafter called "Maker" whether one or more) promises to pay to the order of AMERICAN BANK, N.A., ("Payee") at its office in Corpus Christi, Nueces County, Texas, in lawful money of the United States the sum of ONE MILLION DOLLARS, or so much thereof as may be advanced and unpaid hereon from time to time, together with interest on the unpaid principal balance hereon outstanding from time to time prior to maturity (except during certain periods of default as set forth below) at a variable rate which is one percent (1%) per annum ABOVE THE REFERENCE RATE, with such variable rate to change and be adjusted to reflect any change in such Reference Rate at the time of any such change; provided, such variable rate shall never be less than 5.5% per annum nor ever exceed the lesser of: (i) the maximum legal rate which may be lawfully contracted for, charged or received hereon from time to time under applicable law; or (ii) 17.5% per annum.

                As used herein, the "Reference Rate" shall mean the Wall Street Journal Prime Rate as reported in the Money Rates section of the Wall Street Journal which is based on the base rate on corporate loans at large U.S. money center commercial banks.  If the Wall Street Journal Prime Rate ceases to be made available by the publisher or any successor to the publisher, the interest rate will be determined by using a comparable index.  If more than one Wall Street Journal Prime Rate is quoted, the higher rate shall apply.  The Wall Street Journal Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer.

                All interest rates hereunder shall be computed on a full calendar year (365/366 days) basis. Chapter 346 of the Texas Finance Code shall not in any event apply to the loan evidenced hereby.

PAYMENT DEFAULTS/OTHER DEFAULT PROVISIONS :

                (a)  Late Charge for Payment Defaults :  If a regularly scheduled payment due prior to maturity is 10 days or more late, Maker will be charged 5.000% of the regularly scheduled payment.  The late charge shall not apply to payments due at maturity.

                (b)  Annual Interest Rate with Other Default : Maker hereby agrees that, prior to maturity, at the sole option of Payee and upon ten (10) days written notice to Maker, the entire unpaid principal balance of this Note may bear interest at the highest rate permissible under applicable law or 17.50% per annum, whichever is less, during any period(s) in which Maker fails to comply with or to perform any term, obligation, promise or condition, other than a payment default, contained in this Note or any agreement related to and/or securing this Note.  This Paragraph (b) does not apply to payment defaults, such being specifically addressed herein in Paragraph (a) Late Charge for Payment Defaults .

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$1,000,000.00 Revolving Credit Promissory Note
Maker: TOR Minerals International, Inc.
Payee: American Bank, N.A.

POST MATURITY RATE:

                The Post Maturity Rate on this Note is the maximum rate allowed by applicable law.  Borrower will pay interest on all sums due after final maturity, whether by acceleration or otherwise, at that rate, with the exception of any amounts added to the principal balance of this Note based on Lender's payment of insurance premiums, which will continue to accrue interest at the pre-maturity rate.

                Principal shall be due and payable on or before July 1, 2012 (the "maturity date"), and in accordance with a Loan Agreement of even date herewith (the "Loan Agreement").  Accrued interest shall be due and payable on a monthly basis commencing February 1, 2011, and on the same day of each succeeding month thereafter, and at maturity.

                Each payment will be first applied to reduce the amount owed for charges which are neither interest nor principal, including any late charges and costs to be reimbursed Payee under any agreement or document relating to or securing this Note.  The remainder, if any, of each payment will then be applied first to reduce accrued and unpaid interest, and then any remaining amount applied to unpaid principal.

                Principal and accrued interest may be prepaid in whole or in part from time to time without penalty or premium.

                This note evidences funds to be advanced to Maker pursuant to a Loan Agreement of even date herewith (the "Loan Agreement").  Payment hereof is secured by and guaranteed as set forth in such Loan Agreement.

                This note shall evidence the Maker's, endorsers', sureties' and guarantors' joint and several obligation to pay all advances, together with interest thereon, made by Payee to Maker or for Maker's account.  Interest shall accrue on principal only from the date advanced until paid.

                At the option of the holder hereof, and after the notice of default and opportunity to cure set forth below, the maturity of this note may be accelerated and all unpaid amounts of principal and accrued interest shall become immediately due and payable, without presentment or demand or notice to any person obligated as Maker or any other person obligated hereon, upon the occurrence of any of the following events: default in the payment of any indebtedness or any part thereof owing to holder by any person obligated as Maker or any other person obligated hereon, whether evidenced by this note or otherwise; or failure to perform or keep any of the conditions and covenants contained in any document given to secure indebtedness owing to holder by any person obligated as Maker or any other person obligated hereon or any document evidencing loan agreements made in connection herewith; or, if Maker is an entity, failure of Maker to maintain its status in good standing as an entity qualified to do business in the State of Texas, or any dissolution, merger or consolidation of Maker; or insolvency or making of any general assignment for the benefit of creditors by any person obligated as Maker or any other person obligated hereon; or the filing of any petition or commencement of any proceeding by or against any person obligated as Maker or any other person obligated hereon for any relief, discharge, rearrangement, reorganization or otherwise under any bankruptcy or insolvency laws; or the levying on, seizure or freezing of any account of any person obligated as Maker or any other person obligated hereon by any agency or instrumentality of the State or Federal government; or the issuance of any writ of attachment or garnishment relating to or affecting any of the property or assets of any person obligated as Maker or any other person obligated hereon.

Page 3
$1,000,000.00 Revolving Credit Promissory Note
Maker: TOR Minerals International, Inc.
Payee: American Bank, N.A.

                The holder hereof shall be entitled, as further security for the payment of this note, to a security interest in all property pledged as collateral and any money found on deposit with the holder to the credit of the Maker, and may retain and apply said money, securities or proceeds of such collections to the payment of this note and indebtedness in accordance with that Security Agreement of even date herewith executed by Maker in favor of Payee (the "Security Agreement").  The holder's right to set-off applies without prior notice by holder to Maker.  Holder will not be liable for wrongful dishonor of a check where such dishonor occurs because of holder's set-off of this debt against Maker's accounts.

                Except for the notice of default set forth below, Maker and all sureties, endorsers and guarantors of this note hereby severally waive demand, presentment for payment, notice of non-payment, protest, notice of protest, notice of intention to accelerate maturity, notice of acceleration of maturity, and all other notice, and diligence in collecting this note or filing suit thereon or enforcing any security given therefor, and agree to any substitution, exchange or release of any security now or hereafter given for this note or the release of any party primarily or secondarily liable hereon. Maker and all sureties, endorsers and guarantors of this note further severally agree that it will not be necessary for the payee or any holder hereof, in order to enforce payment of this note, to first institute or exhaust its remedies against any person obligated as Maker or other party liable therefor or to enforce its rights against any security for this note and hereby consent to the renewal and extension or modification from time to time of this note (regardless of the number or length of time of the renewals, extensions or modifications), and to any other indulgence with respect hereto, without notice of any such renewal, extension, modification or indulgence.  All persons obligated hereon, whether as a maker, endorser, surety, guarantor or otherwise, shall be jointly and severally liable for repayment of the indebtedness evidenced by or arising under this note. 

                In the event that this note is placed into the hands of an attorney for collection, or if collected through probate, bankruptcy or other judicial proceedings, then there shall be additionally owing hereon all expenses and costs of collection, including reasonable attorney's fees.

Page 4
$1,000,000.00 Revolving Credit Promissory Note
Maker: TOR Minerals International, Inc.
Payee: American Bank, N.A.

                It is expressly provided and stipulated that, notwithstanding any provision of this Note or any loan agreement or in any deed of trust, assignment, security agreement or other agreement securing payment of this note, in no event shall the aggregate of all interest paid by the Maker to the holder hereof or contracted for, chargeable or receivable hereunder ever exceed the maximum legal rate of interest which may lawfully be charged Maker under the laws of the State of Texas or the United States (whichever may permit the higher rate) on the principal balance of this note from time to time advanced and remaining unpaid. In this connection, it is expressly stipulated and agreed that it is the intent of the payee and the Maker in the execution and delivery of this note to contract in strict compliance with usury laws of the State of Texas or the United States (whichever may permit the higher rate).  In the event said maximum legal rate is calculated under Texas statutes, the applicable rate ceiling (maximum rate) shall be the indicated (weekly) rate ceiling from time to time in effect, as provided in Chapter 303 of the Texas Finance Code, as amended. In furtherance thereof, none of the terms of this note or any loan agreement or in any deed of trust, assignment, security agreement or other agreement securing payment of this note, shall ever be construed to create a contract to pay for the use, forbearance or detention of money, interest at a rate in excess of the maximum legal interest rate permitted to be charged to the Maker under such laws.  The Maker or any guarantors, endorsers or other parties now or hereafter becoming liable for payment of this note shall never be liable for interest in excess of the maximum interest that may lawfully be charged under such laws, and the provisions of this paragraph shall govern over all other provisions of this note or any loan agreement or any deed of trust, assignment, security agreement or other agreement securing payment of this note, should such provisions be in apparent conflict herewith. All sums paid or agreed to be paid to payee or the holder of this note for the use, forbearance or detention of the indebtedness of Maker under the terms of this note or otherwise shall be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest with respect to such indebtedness is uniform throughout the term hereof, and, in conjunction therewith, if the loan evidenced by this note should ever be deemed to consist of two or more loans, then any sum paid or agreed to be paid to the holder hereof for the use, forbearance or detention of the indebtedness of Maker to payee under the terms of this note which is deemed to be excessive interest with respect to one or more of such loans shall be allocated to the loans for which a maximum lawful rate of interest has not been contracted for, charged or received or for which no maximum rate of interest exists.

Page 5
$1,000,000.00 Revolving Credit Promissory Note
Maker: TOR Minerals International, Inc.
Payee: American Bank, N.A.

Notice of Default.   Notwithstanding anything in the foregoing, THE LOAN AGREEMENT, THE SECURITY AGREEMENT OR ANY OTHER AGREEMENT, CERTIFICATE, DOCUMENT OR OTHER INSTRUMENT RELATED HERETO to the contrary, the maturity of this Note shall not be accelerated until after the holder hereof has notified the Maker by personal delivery or by certified mail, return receipt requested, in writing of any default, and if the same be not cured within ten (10) days as regards any monetary default and within thirty (30) days as regards any nonmonetary default from the date of such notice, then without further notice, presentment, demand of any kind, acceleration of maturity hereof may be imposed.  In the event such notice is effected by personal delivery, the date and hour of actual delivery shall be the time and date of such notice to Maker.  Notice by certified mail shall be deemed given when placed in the United States mail, postage prepaid, addressed to Maker at the last known address of Maker as shown by the records of the holder hereof.                                 

NOTICE TO CONSUMER: UNDER TEXAS LAW, IF YOU CONSENT TO THIS AGREEMENT, YOU MAY BE SUBJECT TO A FUTURE RATE AS HIGH AS 17.5 PERCENT PER YEAR.

  EXHIBIT 10.4

                                                                              PROMISSORY NOTE

$2,000,000.00                                                                                                                                                December 31, 2010

                For value received, TOR MINERALS INTERNATIONAL, INC., (hereinafter called "Maker" whether one or more), promises to pay to the order of AMERICAN BANK, N.A. ("Payee"), at its office in Corpus Christi, Nueces County, Texas, in lawful money of the United States the sum of TWO MILLION DOLLARS or so much thereof as may be advanced and unpaid hereon from time to time, together with interest on the unpaid principal balance hereon outstanding from time to time prior to maturity (except during certain periods of default as set forth below) at a rate which is six and 65/100ths percent (6.65%) per annum.

                All interest rates hereunder shall be computed on a full calendar year (365/366 days) basis. Chapter 346 of the Texas Finance Code shall not in any event apply to the loan evidenced hereby.

PAYMENT DEFAULTS/OTHER DEFAULT PROVISIONS :

                (a)  Late Charge for Payment Defaults :  If a regularly scheduled payment due prior to maturity is 10 days or more late, Maker will be charged 5.000% of the regularly scheduled payment.  The late charge shall not apply to payments due at maturity.

                (b)  Annual Interest Rate with Other Default : Maker hereby agrees that, prior to maturity, at the sole option of Payee and upon ten (10) days written notice to Maker, the entire unpaid principal balance of this Note may bear interest at the highest rate permissible under applicable law or 17.50% per annum, whichever is less, during any period(s) in which Maker fails to comply with or to perform any term, obligation, promise or condition, other than a payment default, contained in this Note or any agreement related to and/or securing this Note.  This Paragraph (b) does not apply to payment defaults, such being specifically addressed herein in Paragraph (a) Late Charge for Payment Defaults .

POST MATURITY RATE:

                The Post Maturity Rate on this Note is the maximum rate allowed by applicable law.  Maker will pay interest on all sums due after final maturity, whether by acceleration or otherwise, at that rate, with the exception of any amounts added to the principal balance of this Note based on Payee's payment of insurance premiums, which will continue to accrue interest at the pre-maturity rate.

                This note shall be due and payable in 60 monthly installments, unless sooner paid, the first 59 installments being in the amount of $39,272.97 each, including accrued interest each, and the 60 ^th  and final installment being in the amount of the balance of principal plus accrued interest then remaining outstanding and unpaid hereon.  The first such installment is due and payable February 1, 2011, and the remaining installments are due and payable in consecutive order on the same day of each and every succeeding month thereafter until all sums hereunder have been paid, the final installment due hereon being due on January 1, 2016 (the "maturity date").  In the event of prepayment, no prepayment of principal shall reduce the amount of installments next coming due, and every prepayment of principal shall be applied in inverse order against the principal last coming due hereunder. 

Page 2
$2,000,000.00 Promissory Note
Maker:  TOR Minerals International, Inc.
Payee:  American Bank, N.A.

                Each payment will be first applied to reduce the amount owed for charges which are neither interest nor principal, including any late charges and costs to be reimbursed Payee under any agreement or document relating to or securing this Note.  The remainder, if any, of each payment will then be applied first to reduce accrued and unpaid interest, and then any remaining amount applied to unpaid principal.

                This note evidences funds advanced pursuant to a Loan Agreement of even date herewith (the "Loan Agreement"), and is secured as set forth therein.

                Refinance Penalty.   Maker shall be entitled to prepay this note in whole or in part with funds other than proceeds of a loan or credit extension made by another creditor; however, Maker shall not have the right to prepay this note with funds which are proceeds of a loan or credit extension made by another creditor, unless: (i) such prepayment is in full payment of the outstanding balance and all accrued and unpaid interest on this note; (ii) Maker shall provide written notice to the holder hereof not less than thirty (30) days prior to the date of such prepayment; and (iii) Maker shall pay to the holder hereof a prepayment premium equal to two (2%) of the principal amount that is prepaid. Provided, notwithstanding anything in the foregoing to the contrary, there shall be no prepayment premium for a prepayment during the three (3) months prior to the scheduled maturity date of this note.

                At the option of the holder hereof, and after the notice of default and opportunity to sure set forth below,  the maturity of this note may be accelerated and all unpaid amounts of principal and accrued interest shall become immediately due and payable, without presentment or demand or notice to any person obligated as Maker or any other person obligated hereon, upon the occurrence of any of the following events: default in the payment of any indebtedness or any part thereof owing to holder by any person obligated as Maker or any other person obligated hereon, whether evidenced by this note or otherwise; or failure to perform or keep any of the conditions and covenants contained in any document given to secure indebtedness owing to holder by any person obligated as Maker or any other person obligated hereon or any document evidencing loan agreements made in connection herewith; or, if Maker is an entity, failure of Maker to maintain its status in good standing as an entity qualified to do business in the State of Texas, or any dissolution, merger or consolidation of Maker; or insolvency or making of any general assignment for the benefit of creditors by any person obligated as Maker or any other person obligated hereon; or the filing of any petition or commencement of any proceeding by or against any person obligated as Maker or any other person obligated hereon for any relief, discharge, rearrangement, reorganization or otherwise under any bankruptcy or insolvency laws; or the levying on, seizure or freezing of any account of any person obligated as Maker or any other person obligated hereon by any agency or instrumentality of the State or Federal government; or the issuance of any writ of attachment or garnishment relating to or affecting any of the property or assets of any person obligated as Maker or any other person obligated hereon.

Page 3
$2,000,000.00 Promissory Note
Maker:  TOR Minerals International, Inc.
Payee:  American Bank, N.A.

                The holder hereof shall be entitled, as further security for the payment of this note, to a security interest in all property pledged as collateral and any money found on deposit with the holder to the credit of the Maker, and may retain and apply said money, securities or proceeds of such collections to the payment of this note and indebtedness in accordance with that Security Agreement of even date herewith executed by Maker in favor of Payee (the "Security Agreement").  The holder's right to set-off applies without prior notice by holder to Maker.  Holder will not be liable for wrongful dishonor of a check where such dishonor occurs because of holder's set-off of this debt against Maker's accounts.

                Except for the notice of default set forth below, Maker and all sureties, endorsers and guarantors of this note hereby severally waive demand, presentment for payment, notice of non-payment, protest, notice of protest, notice of intention to accelerate maturity, notice of acceleration of maturity, and all other notice, and diligence in collecting this note or filing suit thereon or enforcing any security given therefor, and agree to any substitution, exchange or release of any security now or hereafter given for this note or the release of any party primarily or secondarily liable hereon. Maker and all sureties, endorsers and guarantors of this note further severally agree that it will not be necessary for the payee or any holder hereof, in order to enforce payment of this note, to first institute or exhaust its remedies against any person obligated as Maker or other party liable therefor or to enforce its rights against any security for this note and hereby consent to the renewal and extension or modification from time to time of this note (regardless of the number or length of time of the renewals, extensions or modifications), and to any other indulgence with respect hereto, without notice of any such renewal, extension, modification or indulgence.  All persons obligated hereon, whether as a maker, endorser, surety, guarantor or otherwise, shall be jointly and severally liable for repayment of the indebtedness evidenced by or arising under this note. 

                In the event that this note is placed into the hands of an attorney for collection, or if collected through probate, bankruptcy or other judicial proceedings, then there shall be additionally owing hereon all expenses and costs of collection, including reasonable attorney's fees.

Page 4
$2,000,000.00 Promissory Note
Maker:  TOR Minerals International, Inc.
Payee:  American Bank, N.A.

                It is expressly provided and stipulated that, notwithstanding any provision of this Note or any loan agreement or in any deed of trust, assignment, security agreement or other agreement securing payment of this note, in no event shall the aggregate of all interest paid by the Maker to the holder hereof or contracted for, chargeable or receivable hereunder ever exceed the maximum legal rate of interest which may lawfully be charged Maker under the laws of the State of Texas or the United States (whichever may permit the higher rate) on the principal balance of this note from time to time advanced and remaining unpaid. In this connection, it is expressly stipulated and agreed that it is the intent of the payee and the Maker in the execution and delivery of this note to contract in strict compliance with usury laws of the State of Texas or the United States (whichever may permit the higher rate).  In the event said maximum legal rate is calculated under Texas statutes, the applicable rate ceiling (maximum rate) shall be the indicated (weekly) rate ceiling from time to time in effect, as provided in Chapter 303 of the Texas Finance Code, as amended. In furtherance thereof, none of the terms of this note or any loan agreement or in any deed of trust, assignment, security agreement or other agreement securing payment of this note, shall ever be construed to create a contract to pay for the use, forbearance or detention of money, interest at a rate in excess of the maximum legal interest rate permitted to be charged to the Maker under such laws.  The Maker or any guarantors, endorsers or other parties now or hereafter becoming liable for payment of this note shall never be liable for interest in excess of the maximum interest that may lawfully be charged under such laws, and the provisions of this paragraph shall govern over all other provisions of this note or any loan agreement or any deed of trust, assignment, security agreement or other agreement securing payment of this note, should such provisions be in apparent conflict herewith. All sums paid or agreed to be paid to payee or the holder of this note for the use, forbearance or detention of the indebtedness of Maker under the terms of this note or otherwise shall be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the actual rate of interest with respect to such indebtedness is uniform throughout the term hereof, and, in conjunction therewith, if the loan evidenced by this note should ever be deemed to consist of two or more loans, then any sum paid or agreed to be paid to the holder hereof for the use, forbearance or detention of the indebtedness of Maker to payee under the terms of this note which is deemed to be excessive interest with respect to one or more of such loans shall be allocated to the loans for which a maximum lawful rate of interest has not been contracted for, charged or received or for which no maximum rate of interest exists.

Page 5
$2,000,000.00 Promissory Note
Maker:  TOR Minerals International, Inc.
Payee:  American Bank, N.A.

Notice of Default.   Notwithstanding anything in the foregoing, THE LOAN AGREEMENT, THE SECURITY AGREEMENT OR ANY OTHER AGREEMENT, CERTIFICATE, DOCUMENT OR OTHER INSTRUMENT RELATED HERETO to the contrary, the maturity of this Note shall not be accelerated until after the holder hereof has notified the Maker by personal delivery or by certified mail, return receipt requested, in writing of any default, and if the same be not cured within ten (10) days as regards any monetary default and within thirty (30) days as regards any nonmonetary default from the date of such notice, then without further notice, presentment, demand of any kind, acceleration of maturity hereof may be imposed.  In the event such notice is effected by personal delivery, the date and hour of actual delivery shall be the time and date of such notice to Maker.  Notice by certified mail shall be deemed given when placed in the United States mail, postage prepaid, addressed to Maker at the last known address of Maker as shown by the records of the holder hereof.