Amended and Restated Security Agreement between Polar Molecular Corporation and Lenders (February 4, 2003)

Summary

This agreement is between Polar Molecular Corporation and a group of lenders. It amends and restates a previous security agreement, granting the lenders a secondary security interest in the company's intellectual property and related assets as collateral for loans totaling up to $2.2 million. The agreement also adjusts the terms of convertible notes and warrants to protect lenders from dilution if the company issues more stock. The agreement allows for additional loans and clarifies the priority of security interests among various lenders and employees.

EX-10.59 49 dex1059.txt AMENDED & RESTATED SECURITY AGREEMENT Exhibit 10.59 AMENDED AND RESTATED SECURITY AGREEMENT This AMENDED AND RESTATED SECURITY AGREEMENT (the "Security Agreement") dated as of February 4, 2003, is entered into by and among Polar Molecular Corporation, a Delaware corporation (the "Borrower") and each of the Lenders set forth in Schedule I hereto (each individually, a "Lender" and collectively, the "Lenders"). RECITALS The Borrower has requested, and the Lenders have agreed to make loans to the Borrower in the maximum aggregate principal amount of $2,200,000 (the "Aggregate Amount"), on the terms and conditions set forth in each respective Convertible Promissory Note by the Borrower in favor of each of the Lenders (each individually a "Note" and collectively, the "Notes"); and The Aggregate Amount will be raised in two separate borrowings, the first of which will be made for approximately $700,000 of the Aggregate Amount and the second of which will be made for the remainder of the Aggregate Amount, and each of such offerings and the parties thereto shall be subject to the terms of this Security Agreement upon consummation of the applicable offering; and The Lenders have requested, and the Borrower has agreed to amend the Notes and the Warrants to adjust the conversion ratio provided in the Notes and the exercise price provided in the Warrants, to provide the Lenders with anti-dilution protection in view of issuances of stock by the Borrower since the beginning of the private placement of Notes and Warrants; and The Borrower has granted a lien and security interest in the Collateral (as such term is defined below) pursuant to the terms of that certain security agreement in favor of Lockhart Holdings, Inc. ("Lockhart") dated October 19, 2001, and that certain security agreement in favor of Affiliated Investments, L.L.C. ("Affiliated") dated October 26, 2001, and may grant liens and security interests in the Collateral on substantially similar terms in favor of one or more additional third-party lenders with respect to the Additional Priority Loans (as such term is defined below) (Lockhart, Affiliated and any other parties who become lenders to Borrower pursuant to security agreement(s) with substantially similar terms as the Existing Security Agreements shall be referred to herein collectively as the "Secured Parties," and their security agreements as "Existing Security Agreements"); and The Borrower has granted a lien and security interest in the Collateral (as such term is defined below) pursuant to the terms of that certain security agreement in favor of the list of employees and service providers (the "Employees") set forth therein dated January 2002, as amended through the date hereof (the "Employee Security Agreement"); and In a Security Agreement dated as of March , 2002 (the "Original Security -- Agreement"), the Borrower granted the Lenders, on an equal priority with the Employees, a secondary security interest in the Collateral contemplated by this Security Agreement effective as of March , 2002 (the "Effective Date"); and -- The Borrower has requested, and the Lenders have agreed, to permit the Borrower to obtain additional loans in the aggregate principal amount of $500,000 (the "Additional Priority Loans") from one or more of the Secured Parties, including new Secured Parties who have not previously loaned funds to the Borrower, to be secured on an equal priority with the obligations originally secured by the Existing Security Agreements with Affiliated and Lockhart; and The Borrower and the Lenders desire to amend and restate the Original Security Agreement in the manner set forth herein. NOW, THEREFORE, in consideration of the promises set forth therein and herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower hereby agrees as follows: AGREEMENT Section 0. Anti-Dilution Adjustment; Effectiveness. (a) In order to provide the Lenders with anti-dilution protection, the Borrower and the Lenders agree that the conversion ratio for the Notes and the exercise price of the Warrants shall be adjusted to take into account all stock issuances by the Borrower (other than in connection with the Notes and Warrants) since the beginning of the private placement of Notes and Warrants that were not contemplated by the Borrower's Private Placement Memorandum dated as of April 11, 2002. (b) The parties hereto hereby agree that this Security Agreement amends and restates the Original Security Agreement in accordance and in compliance with the terms of Section 14 of the Original Security Agreement. Upon execution of this Security Agreement by Lenders holding the requisite principal amount of Notes, this Security Agreement shall become binding upon all Lenders. (c) The parties hereto acknowledge that, except as expressly provided herein, nothing in this Security Agreement is intended to alter, or shall have the effect of altering the creation, attachment or priority of the security interest granted to each of the Lenders under the Original Security Agreement. Section 1. Grant of Security. The Borrower hereby pledges to the Lenders, and hereby grants to the Lenders a secondary lien on and security interest in, all of the Borrower's right, title and interest in and to the following items, whether now owned or hereafter acquired (collectively, the "Collateral"): (a) Patents. All patents and patent applications and the inventions and improvements described and claimed therein, including without limitation, all patents and applications described on Schedule II, together with (i) all reissues, divisionals, continuations, renewals, substitutions, extensions and continuations-in-part thereof, (ii) all income, royalties, damages and payments now or hereafter due or payable under and 2 with respect thereto, including without limitation, damages and payments for past, present and future infringements thereof, (iii) the right to sue for past, present and future infringements thereof, and (iv) all rights corresponding, incident or relating thereto (collectively, the "Patents"); (b) Trademarks. All trademarks (and the goodwill of the business symbol-ized thereby; and with respect to the intent to use applications, the entire business to which such application and the marks subject thereto as required by 15 U.S.C. (S) 1060), trademark applications and registrations, trade names and trade name applications and registrations, including without limitation, all trademarks and applications and registrations listed on Schedule II, together with (i) all renewals thereof, (ii) all income, royalties, damages and payments now or hereafter due or payable with respect thereto, including without limitation, damages and payments for past, present and future infringements thereof, (iii) the right to sue for past, present and future infringements thereof, and (iv) all rights corresponding, incident or relating thereto (collectively, the "Trademarks"), and together with the goodwill and assets of Borrower's business (including without limitation, know-how, trade secrets, customer lists, proprietary information, inventions, methods, procedures and formulas) connected with the use of and symbolized by the Trademarks; (c) Copyrights. All copyrights and copyright registrations together with (i) all renewals and extensions thereof, (ii) all income, royalties, damages and payments now or hereafter due or payable under and with respect thereto, including without limitation, damages and payments for past, present and future infringements thereof, (iii) the right to sue for past, present and future infringements thereof, and (iv) all rights corresponding, incident or relating thereto (collectively, the "Copyrights"); (d) Licenses. All licenses and similar agreements and covenants not to sue with respect to all Patents, Trademarks and Copyrights, or any of them (other than any existing license agreements or covenants not to sue which by their terms prohibit assignment, transfer or the grant of a security interest by Borrower or give the other party thereto the right to terminate the same upon an assignment, transfer or the grant of a security interest therein, which licenses or covenants not to sue do not in the aggregate have a material adverse effect on the value or utility of the assets of Borrower individually or as a whole), together with (i) all renewals, extensions, supplements and continuations thereof and supplements thereto, (ii) income, royalties, damages and payments now or hereafter due or payable with respect thereto, including without limitation, damages and payments for past, present and future breaches thereof, (iii) the right to sue for past, present and future breaches thereof, and (iv) all rights corresponding, incident or relating thereto (collectively, the "Licenses"); and (e) Proceeds. All proceeds and products of any and all of the foregoing and, to the extent not otherwise included, any payments under insurance (whether or not the Lenders are the loss payee thereof) or under any indemnity, warranty or guaranty by reason of loss to or otherwise with respect to any of the foregoing. 3 In each case, the foregoing shall be covered by this Security Agreement, whether Borrower's ownership or other rights therein are presently held or hereafter acquired (by operation of law or otherwise) and howsoever Borrower's interests therein may arise or appear (whether by ownership, security interest, claim or otherwise). Section 2. Security for Liabilities. This Security Agreement secures the payment of (i) all obligations of the Borrower now or hereafter existing under the Notes, whether for principal, interest, expenses or otherwise, and (ii) all obligations of the Borrower now or hereafter existing under this Security Agreement (all such obligations, together with the obligations, being the "Liabilities"). Without limiting the generality of the foregoing, this Security Agreement secures (junior in interest only to the superior security interest in the Collateral granted to the Secured Parties pursuant to the Existing Security Agreements and on an equal priority with the security interest granted to the Employees pursuant to the Employee Security Agreement) the payment of all amounts which constitute part of the Liabilities which are now or at any time hereafter owing by the Borrower to the Lenders under the Notes. Section 3. Representations and Warranties. The Borrower represents and warrants as of the Effective Date: (a) Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The address of the chief place of business and chief executive office of the Borrower is 4600 S. Ulster, Suite 940, Denver, Colorado 80237. (b) The Borrower is the legal and beneficial owner of the Collateral free and clear of any lien, security interest, option or other charge or encumbrance except for the security interest created by this Security Agreement, the security interest granted or to be granted to the Secured Parties pursuant to the Existing Security Agreements and the security interest granted to the Employees pursuant to the Employee Security Agreement. No effective financing statement or other document similar in effect covering all or any part of the Collateral is on file in any recording office, except such as may have been filed in favor of the Lenders related to this Security Agreement, such as may have been filed in favor of the Secured Parties pursuant to the Existing Security Agreements, and such as may have been filed in favor of the Employees pursuant to the Employee Security Agreement. The Borrower's exact full legal name is, and for the previous five year period was, as set forth in the first paragraph of this Security Agreement. Borrower has no trade names or styles. (c) This Security Agreement creates a valid security interest in the Collateral which, upon the filing of a UCC-1 Financing Statement pursuant to the applicable provisions of the UCC, shall constitute a perfected security interest in the Collateral (junior in interest only to the superior security interest in the Collateral granted to the Secured Parties pursuant to the Existing Security Agreements and on an equal priority with the security interest granted to the Employees pursuant to the Employee Security Agreement) securing the payment of the Liabilities. 4 (d) As of the date hereof, other than the consent of Affiliated Investments, L.L.C. to the grant of a security interest in the Collateral, a copy of which has previously been delivered to the Lender Representative (as defined below), no consent of any other person or entity and no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required (i) for the grant by the Borrower of the security interest granted hereby or for the execution, delivery or performance of this Security Agreement by the Borrower, (ii) for the perfection or maintenance of the security interest created hereby (other than the filing of UCC financing Statements describing the Collateral, in accordance with the applicable provisions of the UCC) or (iii) for the exercise by any Lender of its rights and remedies hereunder. Section 4. Further Assurances. (a) The Borrower agrees that after the Effective Date from time to time, at the expense of the Borrower, the Borrower will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the Lender Representative may reasonably request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable any Lender to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, upon the Effective Date, the Borrower will upon such request, execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Lender Representative may request, in order to perfect and preserve the security interest granted or purported to be granted hereby. (b) As of the Effective Date, the Borrower hereby authorizes the Lenders to file one or more financing or continuation statements, and amendments thereto, related to all or any part of the Collateral without the signature of the Borrower where permitted by law. A photocopy or other reproduction of this Security Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. (c) The Borrower will furnish to the Lender Representative from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Lender Representative may reasonably request, all in reasonable detail. The Lender Representative shall provide promptly all such information to the other Lenders. Section 5. Location of Collateral. The Borrower shall keep its chief place of business and chief executive office and the office where it keeps its records concerning the Collateral, if any, at the locations referred to in Section 3(a) or, upon 30 days' prior written notice to the Lender Representative, at any other locations in a jurisdiction where all action required by Section 4 shall have been taken with respect to the Collateral. The Borrower shall not change its name or its jurisdiction of incorporation unless prior written notice has been provided to the Lender Representative. 5 Section 6. Transfers and Other Liens. (a) Other than as contemplated by the terms of any additional offering of the Borrower's securities, the Borrower shall not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral, or (ii) after the Effective Date, create or permit to exist any lien, security interest, option or other charge or encumbrance upon or with respect to any of the Collateral with rights superior to those granted to the Lenders under this Security Agreement, except as provided herein with respect to the Secured Parties (specifically including the Additional Priority Loans). (b) Each of the Lenders hereby acknowledges and accepts that the Borrower has granted, on an equal priority with the security interest granted by this Security Agreement, a security interest in the Collateral to the Employees pursuant to the Employee Security Agreement. (c) Each of the Lenders expressly acknowledges and accepts that the priority of the Secured Parties under the Existing Security Agreements with respect to the Additional Priority Loans is superior to the security interest granted to the Lenders under this Security Agreement. Section 7. Affirmative Covenants of the Borrower. Except as otherwise consented to in writing by the holders of Notes representing a majority in interest then outstanding under the Notes, for so long as any obligations remain outstanding under the Notes, the Borrower shall: (a) maintain its corporate existence in good standing; (b) comply in all material respects with all laws and regulations applicable to the Borrower and the conduct of its business; (c) maintain the Collateral and the validity of all patents constituting the Collateral; (d) maintain all insurance policies related thereto or to the assets of the Borrower, and all insurance policies covering the directors, officers, employees or agents of the Borrower; (e) pay all taxes due and owing by the Borrower; and (f) provide Lender with (i) annual financial statements together with management's discussion and analysis within 150 days following the end of each fiscal year; and (ii) quarterly financial statements including an income statement, a current balance sheet, and a statement of cash flows within 30 days following the end of each fiscal quarter. 6 Section 8. Negative Covenants of the Borrower. Except as otherwise consented to in writing by the holders of Notes representing a majority in interest then outstanding under the Notes, for so long as any obligations remain outstanding under the Notes, the Borrower shall not: (a) materially change the nature of the business conducted by the Borrower; (b) dispose of any material portion of the assets of the Borrower not in the ordinary course of business consistent with past practice; (c) other than with respect to the Secured Parties (specifically including the Additional Priority Loans), permit the Collateral to be subjected to any new encumbrance, lien, mortgage or pledge granting a security interest; (d) pay, loan or advance any amount, not in the ordinary course of business consistent with past practice, in excess of $5,000; (e) declare any dividend on its securities other than dividends payable from legally available funds; provided that in the event that there is a default under any of the Notes, such dividends may not in any event be declared; (f) grant any increase in the compensation payable or to become payable to any of the officers, directors or employees of the Borrower not in the ordinary course of business and consistent with past practice; or (g) other than loans to officers and consultants of Polar in an aggregate principal amount that is less than the accrued wages or other payments due to such officers and consultants, enter into any compensatory agreement or arrangements with any of the officers, directors, shareholders or employees of the Borrower or any of their respective affiliates not in the ordinary course of business consistent with past practice. Section 9. Events of Default. An "Event of Default" shall occur if the Borrower shall fail to pay the Liabilities or fail to perform any obligations hereunder, or under the Note. The continuation of either of the following after 10 days written notice to the Borrower shall also constitute an "Event of Default" hereunder: (a) Any representation, warranty, or statement made by the Borrower herein or in connection with this Security Agreement or the Note shall prove to have been incorrect or untrue in any material respect on or as of the date made, or as of the Effective Date, as applicable; or (b) The Borrower shall default in the observance or performance of any term, indemnity, covenant or agreement contained herein or in connection with the Note. Section 10. Lender Representative. Each of the Lenders party hereto hereby irrevocably appoints from time to time the Lender holding the Note representing the greatest principal amount to be the representative of the Lenders (the "Lender Representative") to act with full authority in the place and stead of each of the Lenders and in the name of each Lender 7 for purposes of this Security Agreement. Each of the Lenders further agrees to be bound by the actions of the Lender Representative for purposes of Sections 11, and 13 hereof and agrees to hold harmless the Lender Representative from his actions taken as Lender Representative hereunder, as long as Lender Representative is acting in good faith and without gross negligence or willful malfeasance. To the extent that the Lender holding the Note representing the greatest principal amount declines to act as the Lender Representative, such Lender may designate another Lender to act as the Lender Representative, and the appointment and agreement of each of the Lenders provided by this Section 10 shall apply to such designated Lender Representative. Section 11. Lender Representative Appointed Attorney-in-Fact. The Borrower hereby irrevocably appoints the Lender Representative the attorney-in-fact of the Borrower, with full authority in the place and stead of the Borrower and in the name of the Borrower, any of the Lenders or otherwise, from time to time in the Lender Representative's discretion following the occurrence and during the continuance of an Event of Default, to take any action and to execute any instrument which the Lender Representative may deem necessary or advisable to accomplish the purposes of this Security Agreement, including, without limitation: (a) To ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Collateral. (b) To receive, endorse, and collect any drafts or other instruments, documents and chattel paper, in connection therewith. (c) To file any claims or take any action or institute any proceedings which the Lender Representative may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of any Lender with respect to any of the Collateral. The provisions of this Section 11 shall terminate upon termination of all of the Notes and the complete satisfaction and repayment of all of Borrower's obligations thereunder. Section 12. The Lenders' Duties. Except for the safe custody of any Collateral in their possession and the accounting for moneys actually received by them hereunder, the Lenders shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Lenders shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in their possession if such Collateral is accorded treatment substantially equal to that which such Lender accords its own property. Section 13. Remedies. If any Event of Default shall have occurred and be continuing: (a) Subject to Borrower's right to redeem the Collateral at any time prior to any disposition of such collateral to a bona fide third party, the Lender Representative may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the UCC (whether or not the UCC applies to the affected 8 Collateral), and also may (i) require the Borrower to, and the Borrower hereby agrees that it will at its expense and upon request of the Lender Representative forthwith, assemble all or part of the Collateral as directed by the Lender Representative and make it available to the Lender Representative at a place to be designated by the Lender Representative which is reasonably convenient to both parties and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Lender Representative's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Lender Representative may deem commercially reasonable. The Borrower agrees that, to the extent notice of sale shall be required by law, at least fifteen days' notice to the Borrower of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Lender Representative shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Lender Representative may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The Lender Representative may disclaim warranties of title, possession, quiet enjoyment and the like. Any action pursuant to this paragraph shall not affect the commercial reasonableness of the sale. (b) Any cash held by the Lender Representative as Collateral and all cash proceeds received by the Lender Representative in respect of any sale of, collection from, or other realization upon all or any part of the Collateral may, in the discretion of the Lender Representative, be held by the Lender Representative as Collateral for, and/or then or at any time thereafter be applied in whole or in part by the Lender Representative against, all or any part of the Liabilities. Any surplus of such cash or cash proceeds held by the Lender Representative and remaining after payment in full of all the Liabilities shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive such surplus. Section 14. Amendments, Etc. (a) No amendment or waiver of any provision of this Security Agreement, and no consent to any departure by the Borrower heretofrom, shall in any event be effective unless the same shall be in writing and signed by Lenders holding Notes representing at least two-thirds of the then current aggregate outstanding principal amount owing under the Notes to the Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. Section 15. Addresses for Notices. All notices and other communications provided for hereunder shall be made, and shall be effective when made, in the manner and to the addresses set forth in the Notes. Section 16. Continuing Security Interest. This Security Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the payment in full of the Liabilities, (ii) be binding upon the Borrower, its successors and assigns 9 and (iii) inure to the benefit of, and be enforceable by, each Lender and its permitted successors, transferees and assigns. Upon any termination of the Security Agreement, each of the Lenders will, at the Borrower's expense, execute and deliver to the Borrower such documents as the Borrower shall reasonably request to evidence such termination. Section 17. GOVERNING LAW. EACH OF THE LENDERS AND THE BORROWER AGREES THAT EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR ANY OF THE REMEDIES HEREUNDER, IN RESPECT OF PARTICULAR COLLATERAL, MAY BE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF COLORADO, ANY DISPUTE BETWEEN THEM ARISING OUT OF OR RELATED TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS SECURITY AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO. Section 18. Arbitration. (a) Any controversy or claim (including, without limitation, whether any controversy or claim is subject to arbitration ) arising out of or relating to this Security Agreement, or the breach thereof (whether, in any case, involving (x) a party hereto, (y) their transferees or (z) such party's or transferee's directors, officers, partners, members, managers, employees, representatives or agents), shall be settled by binding arbitration administered by the American Arbitration Association (the "AAA") under its Commercial Arbitration Rules ("Rules"), and shall be held in Denver, Colorado. (b) Any dispute submitted for arbitration shall be referred to a panel of three arbitrators. The party or parties submitting (the "Submitting Party") the intention to arbitrate (the "Submission") shall nominate one arbitrator. Within 30 days of receipt of the Submission, the party or parties receiving the Submission (the "Answering Party") shall nominate one arbitrator. If the Answering Party fails to timely nominate an arbitrator, then the second arbitrator shall be appointed by the AAA in accordance with the Rules. If the arbitrator chosen by the Submitting Party and the arbitrator chosen by or selected for the Answering Party can agree upon a neutral arbitrator within fifteen days of the choice or selection of the Answering Party's arbitrator, then such individual shall serve as the third arbitrator. If no such agreement is reached, a third neutral arbitrator shall be appointed by the AAA in accordance with the Rules. The parties agree that they shall consent to an expedited proceeding under the Rules, to the full extent the AAA can accommodate such a request. (c) The ruling of the arbitrators shall be binding and conclusive upon all parties hereto and any other Person with an interest in the matter. (d) The arbitration provision set forth in this Section 18 shall be a complete defense to any suit, action or other proceeding instituted in any court regarding any controversy or claim (including, without limitation, whether any controversy or claim is subject to arbitration) arising 10 out of or relating to this Security Agreement, or the breach thereof (whether, in any case, involving (x) a party hereto, (y) their transferees or (z) such party's or transferee's directors, officers, partners, members, managers, employees, representatives or agents); provided, however, that (i) any of the parties to the arbitration may request a District Court in the City and County of Denver, Colorado, to provide interim injunctive relief in aid of arbitration hereunder or to prevent a violation of this Security Agreement pending arbitration hereunder (and any such request shall not be deemed a waiver of the obligations to arbitrate set forth in this Section), (ii) any ruling on the award rendered by the arbitrators may be entered as a final judgment in (and only in) a District Court in the City and County of Denver, Colorado (and each of the parties hereto irrevocably submits to the jurisdiction of such court for such purposes) and (iii) application may be made by a party to any court of competent jurisdiction wherever situated for enforcement of any such final judgment and the entry of whatever orders are necessary for such enforcement. In any proceeding with respect hereto, all direct, reasonable costs and expenses (including, without limitation, AAA administration fees and arbitrator fees) incurred by the parties to the proceeding shall, at the conclusion of the proceeding, be paid by the party incurring same. Section 19. Severability. Wherever possible, each provision of this Security Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Security Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Security Agreement. Section 20. Section Headings. All section headings are inserted for convenience of reference only and shall not affect any construction or interpretation of this Security Agreement. Section 21. Execution. This Security Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. To the extent that any other document or instrument between the Borrower and any of the Lenders in existence as of the date hereof purports to grant any security interest in and to the Collateral to any of the Lenders, this Security Agreement hereby supercedes and replaces any such document or instrument and all terms thereof. [Signature Pages Follow] 11 The parties hereto have caused this Security Agreement to be executed and to be effective as of the date first above written. BORROWER: POLAR MOLECULAR CORPORATION By: /s/ Mark L. Nelson --------------------------------- Mark L. Nelson President and Chief Executive Officer NAME OF LENDERS: /s/ Larry Cahill ------------------------------------- Larry Cahill /s/ James H. Arenson ------------------------------------- James H. Arenson /s/ Wayne Wright ------------------------------------- Wayne Wright ------------------------------------- John Deery, Jr. ------------------------------------- Bernard Fallon ------------------------------------- Kurt Kratz /s/ Jon E. Maynard IRA ------------------------------------- Jon E. Maynard IRA /s/ John A. Fils IRA ------------------------------------- John A. Fils IRA /s/ Allen Nordling ------------------------------------- Allen Nordling /s/ Adeline M. Fils ------------------------------------- Adeline M. Fils /s/ John Sapp ------------------------------------- John Sapp /s/ James Lamb SEP IRA ------------------------------------- James Lamb SEP IRA ------------------------------------- Robert F. Kazimour LEDERMAN BROTHERS HOLDING CO., LLC By: --------------------------------- Name: --------------------------- Title: -------------------------- BERTHEL FISHER & COMPANY FINANCIAL SERVICES, INC. By: /s/ Ronald O. Brendegen --------------------------------- Name: Ronald O. Brendegen Title: CFO /s/ James Odson ------------------------------------- James Odson /s/ Clyde Bridgeman ------------------------------------- Clyde Bridgeman /s/ William Long ------------------------------------- William Long ------------------------------------- LeRoy M. Nayes /s/ Anton P. Welder ------------------------------------- Anton P. Welder /s/ Peggy Jane Becker ------------------------------------- Peggy Jane Becker FIRST CLEARING CORPORATION C/F By: /s/ Melinda C. Shaw IRA --------------------------------- Melinda C. Shaw IRA RHOADES FAMILY TRUST By: /s/ Cecil D. Rhoades --------------------------------- By: /s/ JoAnn Rhoades --------------------------------- Cecil D. Rhoades & JoAnn Rhoades Co-TTEES /s/ Pius Volk --------------------------------- Pius Volk FIRST CLEARING CORP C/F By: /s/ Jeffrey J. Kirke IRA --------------------------------- Jeffrey J. Kirke IRA /s/ Reede Benning ------------------------------------- Reede Benning /s/ Mary Benning ------------------------------------- Mary Benning ------------------------------------- Jack E. Kautzman ------------------------------------- Virginia L. Kautzman JOHN J. ARLEDGE REV TRUST dtd 4/8/99 By: /s/ John J. Arledge TTEE --------------------------------- John J. Arledge TTEE ROBERT K. SWEARINGEN REV TRUST By: --------------------------------- Robert K. Swearingen TTEE /s/ Tony Gentle ------------------------------------- Tony Gentle ------------------------------------- Noel C. Novarro ------------------------------------- Jill E. Novarro FIRST CLEARING CORPORATION C/F By: /s/ John J. Cardillo --------------------------------- John J. Cardillo IRA Acct. #2066-0405 ELIZABETH DAWSON TESTAMENTARY TRUST dtd 7/14/98 By: /s/ Charles S. Dawson --------------------------------- Charles S. Dawson TTEE FIRST CLEARING CORPORATION C/F By: --------------------------------- Carl L. Bimbo IRA Acct. #1541-6064 /s/ Denison E. Smith ------------------------------------- Denison E. Smith ------------------------------------- Debra K. Tarver FIRST CLEARING CORPORATION C/F By: /s/ Edna L. Hogan IRA --------------------------------- Edna L. Hogan IRA Acct. #4288-8062 FIRST CLEARING CORPORATION C/F By: /s/ Robert J. Stapleton IRA --------------------------------- Robert J. Stapleton IRA Acct. #7487-3694 ------------------------------------- James A. Layton ------------------------------------- Ronald E. Davis /s/ Harry Cardillo ------------------------------------- Harry Cardillo ------------------------------------- Robert G. Handley /s/ Ed Crow ------------------------------------- Ed Crow /s/ Chad M. Gilchrist ------------------------------------- Chad M. Gilchrist FIRST CLEARING CORPORATION C/F By: --------------------------------- Randall L. Ward IRA Acct. #8686-6101 FIRST CLEARING CORPORATION C/F By: --------------------------------- Dr. Rene D. Gonzalez IRA Acct. #3768-3699 FIRST CLEARING CORPORATION C/F By: --------------------------------- Alvery A. Bartlett, Jr. SEP IRA Acct. #1379-9520 ------------------------------------- Alvery A. Bartlett, Jr. R. SCOTT FALEY P.C. PENSION TRUST By: /s/ R. Scott Faley --------------------------------- R. Scott Faley, Trustee /s/ James J. Atty ------------------------------------- James J. Atty ------------------------------------- Gwendalynn A. Atty PAULA K. SIMMONS REV TRUST dtd 8/4/99 By: /s/ Paula K. Simmons, Trustee --------------------------------- Paula K. Simmons, Trustee FIRST CLEARING CORPORATION C/F By: /s/ Charles E. Raley IRA --------------------------------- Charles E. Raley IRA Acct. #6548-0915 MICHAEL LITWACK REV TRUST dtd 3/8/83 By: /s/ Michael Litwack --------------------------------- Michael Litwack, Trustee FIRST CLEARING CORPORATION C/F By: --------------------------------- Esther Brenner IRA Acct #1771-9928 ------------------------------------- Willard A. Peterson /s/ John A. Fils ------------------------------------- John A. Fils /s/ Karen Joyce Fils ------------------------------------- Karen Joyce Fils /s/ Anthony J. Finneman ------------------------------------- Anthony J. Finneman ------------------------------------- James Feely ------------------------------------- Robert Dowell /s/ Nick P. Patella ------------------------------------- Nick P. Patella /s/ Leonard E. Jones ------------------------------------- Leonard E. Jones /s/ James R. Stevenson ------------------------------------- James R. Stevenson /s/ Mary Jane Stevenson ------------------------------------- MaryJane Stevenson ------------------------------------- Alan Bartlett Harrison ------------------------------------- Debra D. Harrison /s/ Todd Caudle ------------------------------------- Todd Caudle /s/ Kamille A. Caudle ------------------------------------- Kamille A. Caudle /s/ Peter E. Petrucci ------------------------------------- Peter E. Petrucci MD DOUGLAS A. SIEDENBURG MP PLAN ------------------------------------- Douglas A. Siedenburg, Trustee /s/ Jeffrey S. Krivit ------------------------------------- Jeffrey S. Krivit FBO JAMES PHILLIPS IRA #60462764 /s/ James Phillips ------------------------------------- Lincoln Trust Company, Trustee ------------------------------------- Harold M. Harshman ------------------------------------- Kathleen F. Harshman MARAY PARTNERS LP ------------------------------------- TERESA BOZARTH IRA #1721-3164 /s/ Teresa Bozarth ------------------------------------- First Clearing Corporation C/F /s/ Richard S. Witte ------------------------------------- Richard S. Witte ------------------------------------- Mary E. Witte /s/ Richard B. Osborne ------------------------------------- Richard B. Osborne /s/ Terry E. Osborne ------------------------------------- Terry E. Osborne /s/ Carl N. Johnson ------------------------------------- Carl N. Johnson LLT FARMS INC. ------------------------------------- /s/ Donald J. Ceretti ------------------------------------- Donald J. Ceretti /s/ Janet S. Ceretti ------------------------------------- Janet S. Ceretti R.T.F.F. /s/ William Brazzle ------------------------------------- William Brazzle /s/ James W. Frazier ------------------------------------- James W. Frazier /s/ Deborah A. Frazier ------------------------------------- Deborah A. Frazier JOHN HAMPTON IRA #4230-9697 /s/ John Hampton ------------------------------------- First Clearing Corporation C/F /s/ Terry J. Lutz ------------------------------------- Terry J. Lutz ------------------------------------- Sherri Lutz ------------------------------------- Kevin P. Kohles RICK A. CARTER IRA #2117-1466 ------------------------------------- First Clearing Corporation C/F /s/ Cal E. Wilson ------------------------------------- Cal E. Wilson /s/ Emery Ledger ------------------------------------- Emery Ledger ------------------------------------- L.C. Duffield /s/ Ryan Knott ------------------------------------- Ryan Knott /s/ Ron Elgin ------------------------------------- Ron Elgin JOHN HAMPTON ROTH IRA #4230-9695 /s/ John Hampton ------------------------------------- First Clearing Corporation C/F ------------------------------------- Daniel C. Cadle GREGORY A. SKINNER PROFIT SHARING PLAN /s/ Gregory A. Skinner ------------------------------------- Gregory A. Skinner, Trustee ------------------------------------- Roger Langpaul /s/ Stephen M. Palmer ------------------------------------- Stephen M. Palmer /s/ William J. Newham ------------------------------------- William J. Newham /s/ Henry R. Schweitzer ------------------------------------- Henry R. Schweitzer Carhen Industries, LLC By: ---------------------------------- Name: ----------------------------- Title: ---------------------------- ------------------------------------- L. Cliff Duffield ------------------------------------- Mary Jane Duffield KAUTZMAN FAMILY TRUST DATED AUGUST 7, 2002 ------------------------------------- Jack E. Kautzman, Co-Trustee ------------------------------------- Virginia L. Kautzman, Co-Trustee ------------------------------------- Michael J. Miniat /s/ Jerry Randall ------------------------------------- Jerry Randall ------------------------------------- Patrick Sullivan /s/ Alan Goeser ------------------------------------- Alan Goeser /s/ Teresa Bozarth ------------------------------------- Teresa Bozarth /s/ Wallace E. Bozarth ------------------------------------- Wallace E. Bozarth John McNamara Revocable Living Trust: /s/ John McNamara ------------------------------------- John McNamara, Trustee /s/ Barbara McNamara ------------------------------------- Barbara McNamara, Trustee RICHARD HURD IRA #4366-0102 /s/ Richard Hurd ------------------------------------- First Clearing Corporation C/F CARL JOHNSON IRA #4529-4121 /s/ Carl Johnson ------------------------------------- First Clearing Corporation C/F SCHEDULE I LENDERS 1. Larry Cahill 2292 Highway 965 NE North Liberty, IA ###-###-#### 2. James H. Arenson The American Building 101 Second Street SE, Suite 904 Cedar Rapids, IA 52401 3. Wayne Wright 119 Kaylene Pl. Taranga, New Zealand 4. John Deery, Jr. 3224 Abraham Drive Cedar Falls, IA 50613 5. Bernard Fallon 3723 Oak Lane NE North Liberty, IA ###-###-#### 6. Kurt Kratz 12 Cove Lane Hattiesburg, MS 39402 7. First Clearing Corp C/F Jon E. Maynard IRA ACCT #5674-2927 10700 Wheat First Drive Glenn Allen, VA 23060 8. First Clearing Corp C/F John A. Fils IRA ACCT #3218-4233 10700 Wheat First Drive Glenn Allen, VA 23060 9. Allen Nordling 1196 E Dry Creek Place Littleton, CO 80122 10. Adeline M. Fils 1365 110th Street Creston, IA 50801 11. John Sapp 4617 Blarney Drive Cedar Rapids, IA 52411 12. Lederman Brothers Holding Co., LLC 712 Sycamore Street Waterloo, IA 50703 13. First Clearing Corp C/F James Lamb SEP IRA Acct #5297-3841 10700 Wheat First Drive Glenn Allen, VA 23060 14. Berthel Fisher & Company Financial Services, Inc. 701 Tama St., PO Box 609 Marion, IA ###-###-#### 15. Robert F. Kazimour 321 Nassau Street SE Cedar Rapids, IA 52403 16. James Odson 2143 NW 72nd Place Ankeny, IA 50021 17. Clyde Bridgeman 3526 N. California Peoria, IL 61603 18. William Long Route 7, Box 130 Sulphur Springs, TX 75482 19. LeRoy M. Nayes 1026 Highland Place Bismarck, ND 58501 20. Anton P. Welder P.O. Box 835 Bismarck, ND 58502 21. Peggy Jane Becker 3009 North Shore Loop Mandan, ND 58554 22. First Clearing Corporation C/F Melinda C. Shaw IRA Acct #7837-8800 10700 Wheat First Drive Glenn Allen, VA 23060 23. Rhoades Family Trust Cecil D. Rhoades & JoAnn Rhoades Co-TTEES 2413 Tyler Parkway Bismarck, ND 58503 24. Pius Volk 122 East Edmonton Bismarck, ND 58503 25. First Clearing Corp C/F Jeffrey J. Kirke IRA Acct #4797-2333 10700 Wheat First Drive Glenn Allen, VA 23060 26. Reede Benning Mary Benning P.O. Box 70 Sherwood, ND 58782 27. Kautzman Family Trust dtd 8/7/02 Jack E. Kautzman and Virginia L. Kautzman Co-TTEE 2515 Sharps Place Bismarck, ND 58503 28. John J. Arledge Rev. Trust dtd 4/8/99 John J. Arledge TTEE 3204 Crystal Drive Burlington, IA 52601 29. Robert K. Swearingen Rev. Trust Robert K. Swearingen TTEE P.O. Box 31815 St. Louis, MO 63131-0815 30. Tony Gentle 6400 Westown Parkway West Des Moines, IA 50266 31. Noel C. Novarro Jill E. Novarro 6237 N. Casa Blanca Drive Paradise Valley, AZ 85253 32. First Clearing Corp C/F John J. Cardillo IRA Acct. #2066-0405 10700 Wheat First Drive Glenn Allen, VA 23060 33. Elizabeth Dawson Testamentary Trust dtd 7/14/98 Charles S. Dawson TTEE 120 Jefferson Street Sulphur Springs, TX 75482 34. First Clearing Corp C/F Carl L. Bimbo IRA Acct. #1541-6064 10700 Wheat First Drive Glenn Allen, VA 23060 35. Denison E. Smith Debra K. Tarver 7421 Norwalk Court Manassa, VA 20112 36. First Clearing Corp C/F Edna L. Hogan IRA Acct. #4288-8062 10700 Wheat First Drive Glenn Allen, VA 23060 37. First Clearing Corp C/F Robert J. Stapleton IRA Acct. #7487-3694 10700 Wheat First Drive Glenn Allen, VA 23060 38. James A. Layton 112 Swan Kirkwood, MO 63122 39. Ronald E. Davis 13114 E. Jenan Drive Scottsdale, AZ 85259 40. Harry Cardillo 3233 Bagley Passage Duluth, GA 30097 41. Robert G. Handley P.O. Box 1363 St. Peters, MO 63376 42. Ed Crow 1500 Heritage Manor Court St. Charles, MO 63303 43. Chad M. Gilchrist 623 Raymond Street Bismarck, ND 58501 44. First Clearing Corp C/F Randall L. Ward IRA Acct. #8686-6101 10700 Wheat First Drive Glenn Allen, VA 23060 45. First Clearing Corp C/F Dr. Rene D. Gonzalez IRA Acct. #3768-3699 10700 Wheat First Drive Glenn Allen, VA 23060 46. First Clearing Corp C/F Alvery A. Bartlett, Jr. SEP IRA Acct. #1379-9520 10700 Wheat First Drive Glenn Allen, VA 23060 47. Alvery A. Bartlett, Jr. 511 Tregaron Place St. Louis, MO 63131 48. R. Scott Faley P.C. Pension Trust R. Scott Faley Trustee 5100 Wisconsin Ave. NW, #401 Washington, DC 20016-4131 49. James J. Atty Gwendalynn A. Atty 5566 West Mustang Road Cedar Rapids, IA 52411 50. Paula K. Simmons Rev Trust dtd 8/4/99 Paula K. Simmons Trustee 716 Hermleigh Road Silver Springs, MD 20902 51. First Clearing Corp C/F Charles E. Raley IRA Acct #6548-0915 10700 Wheat First Drive Glenn Allen, VA 23060 52. Michael Litwack Rev Trust dtd 3/8/ Michael Litwack Trustee 208 N. Central Avenue St. Louis, MO 63105 53. First Clearing Corp C/F Esther Brenner IRA Acct #1771-9928 10700 Wheat First Drive Glenn Allen, VA 23060 54. Willard A. Peterson 2718 - 14th Avenue Moline, IL 61265 55. John A. Fils Karen Joyce Fils 1406 110th Street Creston, IA 50801 56. Anthony J. Finneman 2408 La Forest Avenue Bismarck, ND 58501 57. James Feely 6439 Barnaby St. NW Washington, DC 20015 58. Robert Dowell 11401 Oak Point Drive West Burlington, IA 52655 59. Nick P. Patella 3516 Vest Mill Road Winston Salem, NC 27103-2979 60. Leonard E. Jones 8373 Shady Creek Dr. Germantown, TN 61. James R. Stevenson MaryJane Stevenson 48 North 42nd Road Mendota, IL 61342 62. Alan Barlett Harrison Debra D. Harrison 6200 Oxford Circle Pinson, AL 35126 63. Todd Caudle Kamille A. Caudle 1600 Brookdale Dr. Atchinson, KS 66002 64. Peter E. Petrucci MD 2821 N. Quebec St. Arlington, VA ###-###-#### 65. Douglas A. Siedenburg MP Plan Douglas A. Siedenburg Trustee 640 Southfork Waukee, IA 50263 66. Jeffrey S. Krivit 4950 Deer View Road NE Cedar Rapids, IA 52411 67. FBO James Phillips IRA #60462764 Lincoln Trust Company, Trustee P.O. Box 5831 Denver, CO 80217 68. Harold M. Harshman Kathleen F. Harshman 3702 W. Colony SQ St. Joseph, MO 64506 69. MaRay Partners LP 169 Highway 20 West Lancaster, KS 66041 70. Teresa Bozarth IRA #1721-3164 First Clearing Corporation C/F 10700 Wheat First Drive Glen Allen, VA 20360 71. Richard S. Witte Mary E. Witte 3845 Fagen Drive Des Moines, IA 50310 72. Richard B. Osborne Terry E. Osborne 101 W. Front Street Brooklyn, IA 52211 73. Carl N. Johnson 4201 Westown Parkway #120 W. Des Moines, IA 50366 74. LLT Farms Inc. 29442 170th South English, IA 52335 75. Donald J. Ceretti Janet S. Ceretti 1500 Highview Dr. Des Moines, IA 50315 76. William Brazzle d/b/a R.T.F.F. 1533 57th Street Des Moines, IA 50311 77. James W. Frazier Deborah A. Frazier 1400 North 25th St. Joseph, MO 64506 78. First Clearing Corp C/F John Hampton IRA Acct. #4230-9697 10700 Wheat First Drive Glen Allen, VA 20360 79. Terry J. Lutz Sherri Lutz 705 1st Ave. N. Ft. Dodge, IA 50501 80. Kevin P. Kohles 8131 Heather Bow Ct. Johnston, IA 50131 81. First Clearing Corp C/F Rick A. Carter IRA Acct. #2117-1466 10700 Wheat First Dr. Glen Allen, VA 23060 82. Cal E. Wilson P.O. Box 522 Marion, IA 52302 83. Emery Ledger 19000 MacArthur Blvd. 5th Floor Irvine, CA 92612 84. L.C. Duffield 10413 Mohawk Ln. Leawood, KS 66206 85. Ryan Knott 391 Catalina Shore Costa Mesa, CA 92627 86. Ron Elgin 3035 Perkins Lane West Seattle, WA 98199 87. Donald J. Ceretti Janet S. Ceretti 1500 Highview Dr. Des Moines, IA 50315 88. First Clearing Corp C/F John Hampton Roth IRA Acct #4230-9695 10700 Wheat First Drive Glen Allen, VA 23060 89. Daniel C. Cadle 4363 La France Street Newton Falls, OH 44444 90. Gregory A. Skinner Profit Sharing Plan Gregory A. Skinner, Trustee 408 SW 3rd Ankeny, IA 50021 91. Roger Langpaul 13597 Village Court Clive, IA 50425 92. Stephen M. Palmer 561 Tregaron PL St. Louis, MO 63131 93. William J. Newham 9630 Sagamore Road Leawood, KS 66206 94. Henry R. Schweitzer #9 Dockside Drive Lake Tapawingo, MO 64015 95. Carhen Industries, LLC 3000 Little Blue Expressway Independence, MO 64057 96. L. Cliff Duffield Mary Jane Duffield 10413 Mohawk Lane Leawood, KS 66206 97. Michael J. Miniat 1330 County Road 315 Parshall, CO 80468 98. William Brazzle d/b/a R.T.F.F. 1533 57th Street Des Moines IA 50311 99. Gregory A. Skinner PSP, Gregory A. Skinner, Trustee 408 SW 3rd Ave. Ankeny, IA 50021 100. James Odson 2143 NW 72nd St. Ankeny, IA 50021 101. Donald Ceretti Janet Ceretti 1500 Highview Dr. Des Moines, IA 50315 102. Jerry Randall Patrick Sullivan 2836 Walnut St. W. Des Moines, IA 50265 103. Leonard E. Jones 8373 Shady Creek Dr. Germantown, TN 38138 104. Michael Litwack Revocable Trust dated 3/8/83 208 N. Central St. Louis, MO 63105 105. Alan Goeser 8958 79th Avenue NE Munich, ND 58352 106. Teresa Bozarth Wallace E. Bozarth 19704 Red Oak Blvd. St. Joseph, MO 64505 107. John McNamara Revocable Living Trust, John McNamara and Barbara McNamara, Trustees 633 Hickory Lane Frontenac, MO 63131 108. First Clearing Corp C/F Richard Hurd IRA Acct. #4366-0102 10700 Wheat First Drive Glen Allen, VA 23060 109. First Clearing Corp C/F Carl Johnson IRA Acct #4529-4121 10700 Wheat First Drive Glen Allen, VA 23060 SCHEDULE II CERTAIN INTELLECTUAL PROPERTY Listing of Trademarks, Patents, and Patent Pending Applications U.S. PATENTS PATENT NO./ ISSUE DATE INVENTOR TITLE EXPIRES - ----------- ------------------- ------------------------------ ------- 4,516,981 Nelson, Jr., et al. Residual Oil Sludge Dispersant 1/09/04 5/14/85 4,673,411 Nelson, et al. Anti-Gel Fuel Additive 6/16/04 6/16/87 4,753,661 Nelson, et al. Fuel Conditioner 6/28/05 6/28/88 4,846,847 Nelson, et al. Anti-Gel Fuel Composition 7/11/06 7/11/89 U.S. PATENT APPLICATIONS SERIAL NO./ FILING DATE INVENTOR TITLE EXPIRES - ----------- ------------------- ------------------------------ ------- 08/472,179 Nelson, et al. Motor Fuel Additive 3/05/10 6/01/95 Composition And Method For Preparation Thereof Appeal filed 5/20/99. Awaiting Response. FOREIGN PATENT APPLICATIONS AND PATENTS MOTOR FUEL ADDITIVE COMPOSITION AND METHOD FOR PREPARATION THEREOF SERIAL NO./ PATENT NO./ COUNTRY FILING DATE ISSUE DATE EXPIRES - ----------- ----------- ---------------------------- ------- AUSTRALIA 660,608 3/05/01 10/23/95 BRAZIL PI ###-###-#### Amended 9/28/99 3/05/06 3/5/91 CANADA 2,077,666 Exam requested 1/98 3/05/11 3/5/91 Awaiting first Office Action. EPC 0 518 966 12/27/95 3/05/11 Countries Include: Britain, Austria, Belgium, Switzerland, Germany, Denmark, Spain, France, Italy, Luxembourg, Netherlands, Sweden and Greece JAPAN 3-506077 ###-###-#### 3/05/11 3/5/92 8/13/99 SOUTH KOREA 151409 3/05/11 6/19/98 FOREIGN PATENTS RESIDUAL OIL SLUDGE DISPERSANT COUNTRY PATENT NO. ISSUE DATE EXPIRES - ------- ---------- ---------- -------- CANADA 1,262,855 11/14/89 11/14/06 BRITAIN 2,174,984 10/25/89 5/07/06 ISRAEL 78742 10/14/90 5/09/06 FRANCE 2,581,5633 5/09/90 5/09/06 ITALY 1,190,290 2/16/88 5/08/06 FOREIGN PATENTS FUEL CONDITIONER COUNTRY PATENT NO. ISSUE DATE EXPIRES - ------------ ---------- ---------- -------- CANADA 1,331,093 8/2/94 8/02/11 FRANCE 2,602,240 7/5/91 8/01/06 ISRAEL 79662 2/6/91 8/08/06 ITALY 1,196,571 11/16/88 8/07/06 MEXICO 168875 6/14/93 8/12/06 SOUTH AFRICA 86/5501 7/23/86 7/23/06 SOUTH KOREA 34765 7/30/90 8/06/06 TAIWAN 42057 10/11/90 8/01/04 U.S. TRADEMARKS TRADEMARK REG. NO. REG. DATE - --------- --------- --------- DURALT 1,966,891 4/09/96 DURASTA 1,966,886 4/09/96 DURAFLO 1,972,823 5/07/96 FOREIGN TRADEMARKS "DURALT" COUNTRY SERIAL NO. FILING DATE - --------------- ------------- ----------- INDONESIA HC.01-01-1090 9/09/91 MEXICO 250,071 12/11/95 COUNTRY REG. NO. REG. DATE - --------------- ------------- ----------- CANADA 330,690 7/31/87 FRANCE 1,355,576 5/21/86 BRITAIN (CL. 1) 1,266,770 5/08/86 BRITAIN (CL. 4) 1,300,476 2/10/87 ITALY 475,056 3/30/87 ITALY 600,326 7/12/93 JAPAN 2,032,111 3/30/88 GERMANY 1,131,163 11/28/88 PERU 043153 1/30/98 VENEZUELA 135012 9/23/92