Second Amendment to Security Agreement



 Exhibit 10.36 
  
 SECOND AMENDMENT TO 
 SECURITY AGREEMENT 
  
 This
Second Amendment to Security Agreement (this “Amendment”) effective as of January 1, 2003, by and between Polar Molecular Corporation, a Delaware corporation (the “Company”), and each of the employees and advisors of the
Company set forth on Exhibit A hereto (collectively, the “Secured Parties”) hereby amends the Security Agreement dated as of January 30, 2002, by and between the Company and the Secured Parties, as amended (the
“Security Agreement”). Capitalized terms used herein and otherwise not defined shall have the meanings set forth in the Security Agreement. 
  
 RECITALS 
  
 WHEREAS, the Secured Parties have provided services to the Company without being paid compensation and the Company has agreed to grant, pursuant to the
terms of the Security Agreement, the Secured Parties a security interest in the Collateral to secure the payment of such sums; and 
  
 WHEREAS, the Company and the Secured Parties desire to amend the terms of the Security Agreement to provide that the Company may incur additional working
capital loans in an aggregate principal amount of up to $400,000 (the “New Loan”) and, to secure such New Loan, may grant a security interest to the new lenders (the “New Lenders”) that would be superior to the
security interest granted to the Secured Parties pursuant to the Security Agreement. 
  
 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 Company hereby agrees as
follows: 
  
 AGREEMENT 
  
 1. Subsections (a) and (b) of Section 4 of the Security Agreement shall be
amended to read in their entirety as follows: 
  
 “(a) The
Company 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 Company is 4600 5. Ulster, Suite 940, Denver,
Colorado 80237. 
  
 (b) The Company 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 the Existing Security Agreement, the security interest granted to Lockhart Holdings, Inc.
(“Lockhart”) under that certain Security Agreement between the Company and Lockhart (the “Lockhart Security Agreement”) effective as of October 22, 2001, the security interest granted to 
  

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 Exhibit 10.36 
  

 certain investors investing up to an aggregate amount of $2,700,000 in the Company under that certain
Security Agreement (the “Investor Security Agreement”) between the Company and the Investors (as defined in the Investor Security Agreement), the security interest which may be granted to new lenders (the “New
Lenders”) lending up to an additional principal amount of $400,000 under a security agreement between the Company and the New Lenders (the “New Lender Security Agreement”), and the security interest created by this 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 Affiliated, Lockhart, the Investors, the
New Lenders and the Secured Parties related to this Security Agreement. The Company’s exact full legal name is, and for the previous five year period has been, as set forth in the first paragraph of this Security Agreement. The Company has no
trade names or styles.” 
  
 2. Subsection (a) of Section 7 of
the Security Agreement shall be amended to read in its entirety as follows: 
  
 “(a) The Company 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 Secured Parties under this Security Agreement except for the security
interest granted to Affiliated pursuant to the Existing Security Agreement, the security interest granted to Lockhart pursuant to the Lockhart Security Agreement, the security interest granted to the Investors pursuant to the Investor Security
Agreement, and the security interest granted to the New Lenders pursuant to the New Lender Security Agreement.” 
  
 3. Section 7 of the Security Agreement shall be amended by adding a new Subsection (c) thereto to read in its entirety as follows: 
  
 “(c) The Secured Parties hereby acknowledge and accept, that the
Company will grant, on a superior priority to the security interest granted by this Security Agreement, additional security interests in the Collateral to the New Lenders for purposes of obtaining the New Loan.” 
  
 4. Subsection (c) of Section 8 of the Security Agreement shall be amended to
read in its entirety as follows: 
  
 “(c) Except as
otherwise provided herein, the Company shall incur any lien, security interest or other charge or encumbrance against the Collateral superior in rights to the security interest created in favor of the Secured Parties pursuant to this Security
Agreement, without the written consent of the Secured Parties;” 
  
 5. In addition to the amendments provided above, Exhibit A to the Security 
  

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 Exhibit 10.36 
  

 Agreement shall be replaced in its entirety by Exhibit A attached to this Amendment, and Schedule
Ito the Security Agreement shall be replaced in its entirety by Schedule Ito this Amendment. 
  
 6. The parties hereto acknowledge that, notwithstanding any of the provisions of this Amendment, nothing in this Amendment intends to, or effectively
alters the creation or the attachment of the security interest granted to each of the Secured Parties under the Security Agreement. Except as explicitly amended by the terms of this Amendment, all of the terms of the Security Agreement shall remain
in full force and effect. 
  
 7. This Amendment 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. 
  
 The parties hereto have caused this Amendment to be executed to be effective
as of the date first set forth above. 
  

			
	THE COMPANY:
	
	 POLAR MOLECULAR CORPORATION

		
	 By:
	 	   /s/ Mark L. Nelson


	 	 	 Mark L. Nelson, President and

	 	 	 Chief Executive Officer



  

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 Exhibit 10.36 
  


			
	SECURED PARTIES:
	
	 HOLME ROBERTS & OWEN LLP

		
	 By:
	 	   /s/ Garth B. Jensen


	 	 	 Garth B. Jensen, Partner

	
	   /s/ Mark L. Nelson


	 Mark L. Nelson, President and Chief Executive Officer

	
	   /s/ C. B. Prakash


	 Chandra Prakash, V.P.

	
	   /s/ Alan L. Smith


	 Alan L. Smith, V.P.

	
	   /s/ Deborah Pilkington


	 Deborah Pilkington, V.P.

	
	   /s/ Delores Coy DeJongh


	 Delores Coy-DeJongh, Sales Rep.

	
	 REISING, ETHTNGTON, BARNES, KISSELLE,
 LEARMAN & MCCULLOCH, P.C.

	
	   /s/ Paul J. Ethington


	 Paul J. Ethington, Chairman of Board



  

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 Exhibit 10.36 
  
 EXHIBIT A 
  
 EMPLOYEES AND ADVISORS 
  
 Holme, Roberts & Owen LLP 
  
 Mark L. Nelson 
  
 Chandra Prakash 
  
 Alan L. Smith 
  
 Deborah Pilkington 
  
 Delores Coy-DeJongh 
  
 Reising, Ethington, Barnes, Kisselle, Learman & McCullogh, P.C. 







 SCHEDULE I 
  

CERTAIN INTELLECTUAL PROPERTY 
  
 POLAR MOLECULAR CORPORATION 
  
 U.S. PATENTS 
  

							
	 PATENT NO./ ISSUE DATE

	  	 INVENTOR

	  	 TITLE

	  	EXPIRES


	 4,516,981
 5/14/85
	  	 Nelson, Jr., et al.
	  	 Residual Oil Sludge Dispersant
	  	1/09/04
				
	 4,673,411
 6/16/87
	  	 Nelson, et al.
	  	 Anti-Gel Fuel Additive
	  	6/16/04
				
	 4,753,661
 6/28/88
	  	 Nelson, et al.
	  	 Fuel Conditioner
	  	6/28/05
				
	 4,846,847
 7/11/89
	  	 Nelson, et al.
	  	 Anti-Gel Fuel Composition
	  	7/11/06
				
	 6,488,723
	  	 Nelson, et al.
	  	Motor Fuel Additive Composition and Method for Preparation Thereof	  	12/03/22

  
 U.S. PATENT
APPLICATIONS 
  

							
	 SERIAL NO./ FILING DATE

	 	 INVENTOR

	 	 TITLE

	  	EXPIRES



  

							
	 SERIAL NO./ FILING DATE

	 	 INVENTOR

	 	 TITLE

	  	EXPIRES



  

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 POLAR MOLECULAR CORPORATION 
  
 FOREIGN PATENT APPLICATIONS AND PATENTS 
  
 MOTOR FUEL ADDITIVE COMPOSITION 
 AND METHOD FOR PREPARATION THEREOF 
  

							
	 COUNTRY

	  	 SERIAL NO./ FILING DATE

	  	 PATENT NO./ ISSUE DATE

	  	EXPIRES


	AUSTRALIA	  	 	  	 660,608
 10/23/95
	  	3/05/11
	BRAZIL	  	 	  	P1 9106137	  	3/05/06
				
	CANADA	  	 2,077,666
  
 3/5/91
	  	 Assigned to
 FINLAYSON &
 SINGLEHURST
	  	3/05/11
				
	EPC	  	Countries Include: Britain, Austria, Belgium, Switzerland, Germany, Germany, Denmark, Spain, France, Italy, Luxembourg, Netherlands, Sweden and Greece	  	 0 518 966
 12/27/95
	  	3/05/11
				
	JAPAN	  	 	  	 2966927
 8/13/99
	  	3/05/11
				
	SOUTH KOREA	  	 	  	 151409
 6/19/98
	  	3/05/11

  

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 POLAR MOLECULAR CORPORATION 
  
 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	  	2,581,563	  	5/09/90	  	5/09/06
				
	VENEZUELA	  	49761	  	5/09/86	  	5/09/01
				
	ITALY	  	1,190,290	  	2/16/88	  	5/08/06

  

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 POLAR MOLECULAR CORPORATION 
  
 FOREIGN PATENTS 
  
 FUEL CONDITIONER 
  

							
	 COUNTRY

	  	 PATENT. NO.

	  	 ISSUE DATE

	  	 EXPIRES


				
	 BRAZIL
	  	P1 8603711-0	  	6/28/94	  	8/05/01
				
	 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	  	8/01/06
				
	 VENEZUELA
	  	49691	  	8/15/86	  	8/15/01

  

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 POLAR MOLECULAR CORPORATION 
  
 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

  

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