<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

(Mark One)                       FORM 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended                   December 31, 2000
                          -----------------------------------------------------

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________________

Commission file number                    000-26434
                      ---------------------------------------------------------

                                Kyzen Corporation
-------------------------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)

              Tennessee                                   87-0475115
------------------------------------------      -------------------------------
     (State or Other Jurisdiction of                    (IRS Employer
      Incorporation or Organization)                  Identification No.)

 430 Harding Industrial Drive, Nashville, TN                              37211
-------------------------------------------------------------------------------
  (Address of Principal Executive Offices)                            (Zip Code)

                                  615-831-0888
-------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:


     Title Of Each Class              Name Of Each Exchange On Which Registered
------------------------------       ------------------------------------------
Common Stock                                  Boston Stock Exchange
------------------------------       ------------------------------------------

Warrants for Common Stock                     Boston Stock Exchange
------------------------------       ------------------------------------------

Securities registered under Section 12(g) of the Exchange Act:

                                      NONE
--------------------------------------------------------------------------------
                                (Title of class)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

         State issuer's revenues for its most recent fiscal year. $5,893,392
                                                                  ----------

         State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act) __________________________________
                     $759,317 at $0.281 as of March 1, 2001
-------------------------------------------------------------------------------
NOTE: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.
<PAGE>   2

                         ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST FIVE YEARS

         Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. [ ] Yes [ ] No

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

        4,777,787 shares of Common Stock outstanding as of March 1, 2001
-------------------------------------------------------------------------------

                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The listed documents should be clearly described for identification purposes
(e.g., annual report to security holders for fiscal year ended December 31,
1990).

Portions of the Registrant's definitive Proxy Statement relating to the Annual
Meeting of Shareholders to be held on April 18, 2001 are incorporated into Part
III of this report.

Transitional Small Business Disclosure Format (check one):
         [ ] Yes  [X] No
<PAGE>   3

KYZEN CORPORATION
INDEX


<TABLE>
<CAPTION>
                                                                                                          Page No.
                                                                                                          --------
<S>                 <C>                                                                                   <C>
Part I

         Item 1.    Description of Business                                                                   4

         Item 2.    Description of Property                                                                   8

         Item 3.    Legal Proceedings                                                                         9

         Item 4.    Submission of Matters to a Vote of Security Holders                                       9

Part II

         Item 5.    Market for Common Equity and Related Stockholder Matters                                 10

         Item 6.    Management's Discussion and Analysis or Plan of Operation                                10

         Item 7.    Financial Statements                                                                     14

                           Report of Independent Accountants                                                 15

                           Balance Sheet as of December 31, 2000 and 1999                                    16

                           Statement of Operations for the years ended

                               December 31, 2000 and 1999                                                    17

                           Statement of Changes in Shareholders' Equity for the years
                               ended December 31, 2000 and 1999                                              18

                           Statement of Cash Flows for the years ended

                               December 31, 2000 and 1999                                                    19

                           Notes to Financial Statements                                                     20

         Item 8.    Changes in and Disagreements With Accountants on Accounting and
                        Financial Disclosure                                                                 27

Part III

         Item 9.    Directors, Executive Officers, Promoters and Control Persons;
                        Compliance With Section 16(a) of the Exchange Act                                    28

         Item 10.   Executive Compensation                                                                   28

         Item 11.   Security Ownership of Certain Beneficial Owners and Management                           28

         Item 12.   Certain Relationships and Related Transactions                                           28

         Item 13.   Exhibits and Reports on Form 8-K                                                         29
</TABLE>


                                       3
<PAGE>   4

KYZEN CORPORATION
PART I


ITEM 1.  DESCRIPTION OF BUSINESS

THE COMPANY

Kyzen(R) Corporation ("Kyzen" or the "Company") is a specialty chemical company
focused on chemistries and processes for electronics, optics, aerospace,
semiconductor and other high technology industries where precision cleaning
processes are required. The Company also manufactures and markets peripheral
equipment such as process control systems, prototype cleaning machines and
chemical handling systems that enhance the use by customers of the Company's
chemical solutions. Typically, the Company's products are sold as separate items
and are integrated into a cleaning process by the customer or by the Company as
part of a contract service.

The Company was incorporated in Utah in 1990. On April 28, 1999, the
Shareholders of the Company approved the merger of the Company with a wholly
owned subsidiary of the Company, the result of which was to change the Company's
state of incorporation to Tennessee. The reincorporation became effective on May
26, 1999. The Company's headquarters are located at 430 Harding Industrial Dr.,
Nashville, TN 37211, where its telephone number is (615) 831-0888, and its fax
number is (615) 831-0889.

HISTORY OF THE COMPANY

The Company was founded in 1990 with its initial focus on developing chemical
products to replace chemicals that were to be banned under the Montreal Protocol
(the "Protocol"). The Protocol called for a freeze in the production and
consumption of ozone depleting products ("ODPs") by the year 2000 for developed
countries and 2010 for developing countries. As of February 1993, over 90
nations, representing over 90% of the world's consumption of ODPs, were parties
to the Protocol. The more than 90 nations which are signatories to the Protocol
agreed to accelerate the phase-out of production of ODPs to December 31, 1995
for developed countries and December 31, 2005 for developing countries. After
the 1995 deadline, ODP products can still be bought, recycled and sold until the
inventories are depleted.

Because industrial cleaning is one of the largest applications for ODPs, Kyzen
was organized to develop chemical solutions and processes to replace ODPs used
in the cleaning of electronic assemblies and precision metal components.
Historically, materials such as chlorofluorocarbon 113 ("CFC-113") and 1,1,1,
Trichloroethane ("Methyl Chloroform" or "Trich") were widely used in these
applications. Today, no single replacement product has been found that has the
broad applicability of the ODPs produced before 1995. The market for high
technology cleaning has fragmented into smaller niche cleaning applications
where specific products are developed to meet specialized market needs. This
market continues to evolve as newer technology and miniaturization of products
present more difficult cleaning challenges for manufacturers.

THE COMPANY'S TECHNOLOGY ROADMAP

In 2000, the Company reviewed the market niches that it currently services and
organized them into the Kyzen Technology Roadmap consisting primarily of four
Technical Roads (the "Technical Roads"). The Technology Roadmap serves as a
strategic plan to identify and focus the Company's products and resources to
serve the niche markets within each Technical Road. The Technical Roads are
described in the table below:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
TECHNICAL ROAD            NICHE CLEANING APPLICATIONS                       KYZEN PRODUCTS USED
-------------------------------------------------------------------------------------------------------------------
<S>                       <C>                                               <C>
ELECTRONIC ASSEMBLY       Through Hole and Surface Mount Circuit Boards;    Aquanox(R), Ionox(R), SynergyCCS(TM),
                          Screens, Misprints, Maintenance, Adhesives,       Lonox(TM), Cybersolv(R)
                          Lead Free Soldering Processes
-------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS            Wafers, Hybrids, Flip Chips, Lead Free            Ionox(R), Micronox(R),
                          Soldering Processes, Ball Grid Arrays, Solder     SynergyCCS(TM), Optisolv(R),
                          Bumps, Photoresist, Flat Panel Displays           Cybersolv(R)
-------------------------------------------------------------------------------------------------------------------
AEROSPACE                 Rocket Assemblies, Aircraft Parts, Metal Parts,   Ionox(R), Metalnox(R), Cybersolv(TM),
                          Aerospace Parts                                   Kryptonol(TM)
-------------------------------------------------------------------------------------------------------------------
OPTICS                    Lenses, Moulds, Glass, Lasers, Fiber Optics       Optisolv(R), Micronox(R), Cybersolv(R),
                                                                            Kryptonol(TM)
-------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       4
<PAGE>   5

KYZEN CORPORATION

PART I (CONTINUED)


Electronic Assembly Technical Road. Historically, the core of the Company's
business has been focused on the Electronic Assembly Technical Road, in which
the Company provided cleaning products and processes to the electronic assembly
industry. As discussed below under the "Competition" heading, the advent of
no-clean soldering processes has slowed demand for the cleaning products and
processes provided by the Company to assemblers of electronic components. The
Company anticipates that demand for its products and processes in this Technical
Road may increase in light of the trends towards miniaturization and the use of
no- lead soldering techniques as discussed below.

Semiconductor Technical Road. In order to produce semi-conductors with faster
clock speeds, manufacturers of semiconductors are increasing their use of solder
bumping techniques that are similar to those used in the Electronic Assembly
Technical Road and, accordingly, the Company may be able to capitalize on its
experience in the Electronic Assembly Technical Road to increase its share of
the business within the Semiconductor Technical Road, which management believes
to be a growing market.

Optics. In 1998, the Company began to provide cleaning products and processes to
the optical industry. To date, the Company has focused on products and processes
for cleaning ophthalmic lenses. However, the Company anticipates that it may
have the opportunity to provide its products and services to manufacturers of
industrial glass and other high volume optical surfaces as well as to producers
of products that interact with light rather than electrons.

Aerospace. The Company anticipates that the aerospace industry, including both
civilian and military producers, represent a growing market for the Company's
products and processes. In order to participate in this industry, however,
management expects that the Company will have to hire personnel experienced in
compliance with military and industry specifications. The Company's strategy is
to patent its formulations or to partner with companies that have existing
patents where unique materials, blends or uses are identified. Additionally, the
Company uses a combination of multiple ingredients and suppliers to protect and
maintain as proprietary information the key active materials used in each
product.

Most of Kyzen's formulations are non-flammable and non-combustible, low in
toxicity and generally require no hazardous material shipping or storage
precautions. The Company attempts to meet this standard with all of its
products; however, customized products for key high volume customers and new
niche applications frequently have unique requirements, which may necessitate
departure from this standard.

The Company is constantly developing new cleaning chemistries and processes for
all of the Technical Roads. Management of the Company believes that future
product lines may also be obtained through acquisitions, marketing agreements or
licensing agreements. In 1998, the Company entered into a licensing agreement
with AlliedSignal, Inc. now known as Honeywell International Inc., ("Honeywell")
and Hewlett Packard Company to sell and market a patented cleaning product
jointly developed by both companies. In 1999, the Company entered into an
exclusive agreement to sell and market Xolvone(R),.a patented chemical developed
by the DuPont Nylons Division. In the first quarter of 2001, the Company entered
into an agreement to sell and market Vertrel(R), a patented chemical developed
by the DuPont Fluoroproducts Division. These chemicals will be targeted by the
Company into formulated products sold under the Company's Ionox, Aquanox,
Cybersolv and Micronox trademarks. The primary application for these products is
within the Semiconductor Technical Road, with additional applications in both
the Aerospace and Electronic Assembly Technical Roads. The expiration or
termination of any such agreements would not have a material adverse effect on
the Company's financial condition or results of operations at the present time.
The Company has been in discussions from time to time with potential acquisition
candidates or licensors of cleaning technology and products. The Company has not
entered into any definitive agreement with such candidates or licensors and
there can be no assurance that any particular opportunity will materialize.

ENGINEERING SERVICES GROUP

The goal of Kyzen's Engineering Services Group (formerly the Equipment Products
and Peripherals group) is to enhance processes and expedite and eliminate
obstacles in the implementation of Kyzen's chemical cleaning solutions. This
group is responsible for developing, manufacturing and/or retrofitting process
control and cleaning equipment. In addition the group also builds and maintains
equipment in Kyzen's Cleaning Applications and Evaluation Center, maintains
existing customer machines pursuant to service contracts and manufactures
peripheral items necessary to assist in the installation and implementation of
chemicals. The group also utilizes the Company's extensive array of equipment in
its Cleaning Applications and Evaluation Centers in Manchester, New Hampshire
and Nashville, Tennessee to perform contract cleaning.


                                       5
<PAGE>   6

KYZEN CORPORATION

PART I (CONTINUED)


Process Control Systems ("PCS"). PCS is a fully integrated tool based on the
Company's proprietary technology that automatically samples and adjusts cleaning
agent concentration to a specified level in a cleaning tank or machine. PCS also
has the capability to automatically (1) monitor and maintain liquid levels, (2)
pump chemicals directly from the drum to the wash tank and (3) fill the cleaning
machine. The current PCS product line is designed to operate on a number of the
Company's existing and developmental cleaning products. The Company's strategy
is to further develop Kyzen's technologies in the PCS area and use them to
differentiate the Company's cleaning agents from competitors. The Company plans
to pursue the manufacture and sale of its PCS product to potential customers in
current markets and to continue to develop the PCS for new niche cleaning
applications and for other chemical applications. Management believes the
largest interest in the PCS product line will continue to be within the
Semiconductor Technical Road.

COMPETITION

The precision cleaning industry underwent rapid change in the 1990's as
companies searched for new technology to replace processes based on ODPs. The
precision cleaning industry moved from a commodity market supplied by major
chemical companies to a series of highly fragmented niche markets supplied by
numerous focused specialty chemical companies. In the last three years, the
Company's greatest competitive challenge has come not from direct competition
but from industry changes. The largest change came from the advent of soldering
technologies that do not require cleaning. These "No Clean" technologies
dominate a majority of electronic assemblies produced worldwide and limit
cleaning to those applications that require high reliability. The second change
was the emergence of contract manufacturers of electronic assemblies known as
the Electronic Manufacturing Services ("EMS") industry. With the emergence of
EMS, many original equipment manufacturers ("OEM's") have outsourced the
production of their products to these contract manufacturers. The EMS industry,
unlike the OEM business, is a commodity market and focuses on cost rather than
reliability of end products. The end result is that many of the products
produced by the EMS manufacturers are not cleaned, thereby slowly reducing the
size of the cleaning market in the Electronic Assembly Technical Road. The
cleaning challenges that remain in the contract assembly market tend to be
smaller and more oriented to "off line" production processes.

Recent technology appears to be creating new opportunities for the Company in
the Electronic Assembly and Semiconductor Technical Roads. The emergence of
miniaturization requires products to be cleaner in order to properly function.
As miniaturization progresses, the desire to eliminate production steps such as
the packaging of semiconductors should result in semiconductors being attached
to electronic assemblies through the use of flip-chip and solder bumping
technologies. This emerging trend will require cleaning in many of the
manufacturing steps. Environmental groups in various industrial nations are
seeking the elimination of lead-based products. If legislation prohibiting or
limiting the use of lead is enacted, management of the Company believes that "no
lead" soldering technologies will create more cleaning opportunities than those
that currently exist with lead-based soldering, particularly within the
Electronic Assembly and Semiconductor Technical Roads. Kyzen is currently
working with a number of solder paste suppliers to test cleaning applications
for a number of new "no lead" soldering products.

Currently, the Company considers its most significant competitors to be the
following companies: Petroferm(R), Church & Dwight, Valtron, Alpha Metals,
Multicore EKC Technology, Ashland Chemical, Brulin 3M and Dr. O.K. Wack Chemie.
As the Company continues to expand its product offering, management believes new
competitors will emerge as the Company moves to solve new technical challenges.
Management believes the Company has a competitive advantage because the Company
is one of a few companies that have as their primary source of revenue the sale
of high technology cleaning products. Management believes that the Company may
also have a competitive advantage by the Company's ability to leverage its core
competencies though its agreements with technology partners, such as DuPont, and
the Company's provision of cleaning data and information on environmentally
sensitive cleaning processes to solder, flux and equipment suppliers.

DEPENDENCE ON SUPPLIERS AND OTHERS

The Company purchases its raw materials, components and finished machines from a
variety of sources. Through its agreements with DuPont, the Company will be
dependent on DuPont's Nylon and Fluoroproducts Divisions for the production of
their unique chemicals. While the Company is generally not dependent on any one
supplier for raw materials, components or finished products, it had historically
relied on one domestic chemical producer for its supply of the nonlinear alcohol
used in many of the Company's cleaning formulations. In 2000, the Company became
less reliant on this vendor as the Company obtained its non-linear alcohol from
both domestic and international sources. There can be no assurance that any raw
material or other components and systems utilized by the Company will continue
to be available at reasonable prices in the volume required for the Company to
meet its customers' orders.


                                       6
<PAGE>   7

KYZEN CORPORATION

PART I (CONTINUED)


PRODUCTION AND SUPPLY

The production of the Company's chemicals involves the blending of chemicals
purchased from third-party suppliers in the open market. The Company's chemical
raw materials are widely available from numerous sources with the exception of
DuPont as described above.

SALES AND PRODUCT DISTRIBUTION

Marketing. There are a number of precision cleaning market niches ranging in
size from $1,000,000 to $50,000,000 in which management believes the Company
should be able to establish and maintain a competitive advantage. The Company is
now established in the Electronic Assembly Technical Road and has targeted
Technical Roads in Optics, Semiconductors and Aerospace for expansion. The
Company is currently developing other cleaning processes and products for these
Technical Roads, with some emphasis on peripheral cleaning products such as
hand-cleaning products and wipes, and cleaning processes using smaller machines
and batch type processes. The Company's focus on the cleaning market allows the
Company's sales force to be committed to selling and servicing related product
lines in a specialized market, as opposed to competitive sales forces or
distributors that are less focused due to demands from multiple product lines in
multiple markets.

Cleaning Applications and Evaluation Centers. The Company currently operates
comprehensive Cleaning Applications and Evaluation Centers in Manchester, New
Hampshire and Nashville, Tennessee. A Cleaning Applications and Evaluation
Center is a demonstration facility in which customers can view the effectiveness
of the Company's cleaning technology in a risk-free environment. The Company
believes it has the most comprehensive demonstration facilities in the
industrial cleaning industry. The centers are used to expedite the sales cycle
for Kyzen's chemical solutions, to accelerate the development of new chemical
products and to increase potential customers' exposure to Kyzen and its
products.

Sales Force. One of the primary challenges facing the Company is selling its
cleaning technologies to customers who have limited experience with cleaning
agents and processes. Consequently, these sales often require long relationship
building periods and considerable time for solving problems and testing of
process and chemistry. To shorten the sales cycle, the Company has invested in
the Cleaning Applications and Evaluation Centers described above, which allow
new and existing customers to test and collect data on various cleaning products
and processes. The Company's sales cycle for conversion to the Company's
products typically range from three months to two years.

The Company currently sells its products through a direct regional sales force,
complemented in certain geographic regions or niches with manufacturer
representatives or agents. The Company also uses sales engineers, chemists,
application lab personnel and inside sales personnel in the Company's sales
efforts depending on the customer application, sales volume potential and the
status of the customer in testing, buying and/or implementing the cleaning
chemical. The Company delivers its product via common carrier.

CUSTOMERS

During the year ended December 31, 2000, no customer accounted for more than 10%
of the Company's revenues. Management believes that the loss of any one customer
would not have a material adverse effect on the Company's financial condition or
results of operations.

PATENTS

The Company holds four patents for its chemical cleaning formulations in the
United States. Two patents cover applications in the electronic area and two
cover applications in the optical and semiconductor area. The Company has also
obtained one patent for electronic applications in each of Mexico, China,
Taiwan, Australia, Korea, Brazil, European Union and Japan. The two patents for
electronic applications, which expire between 2009 and 2014, and pending
international patents related to these two U.S. patents, are jointly owned by
the Company and Delphi Automotive Systems ("Delphi", formerly Delco Electronics,
a division of General Motors). Delphi has retained the right to use the
chemistry developed under the patents and the Company has retained the right to
market the patented formulations. Delphi is not entitled to receive royalties or
license fees from the Company on the chemical cleaning products manufactured and
sold by the Company. If the Company enters into a license or royalty arrangement
for the patented formulations, the resulting license fee or royalties would be
shared between the Company and Delphi.

The Company has applied for additional patents in the United States and several
foreign countries covering electronic, optical and semiconductor cleaning
formulations and the use of novel materials and processes. These filings relate
to work performed during the past three years on a number of formulations to be
used in existing and new market niches.


                                       7
<PAGE>   8

KYZEN CORPORATION

PART I (CONTINUED)


Two U.S. patents were issued to the Company in October 1999 and January 2000,
and additional patents from this and other applications are currently being
reviewed by the patent office. The two U.S. patents will expire in 2018. The
Company is also required to pay patent royalties to Bix Manufacturing Company, a
shareholder of the Company. Royalties are based on 2% of revenues related to the
patented chemistry and amounted to $41,100 in each of 2000 and 1999. The Company
is currently settling its royalty obligation through consulting services
performed by the Company. In addition, the Company also pays a royalty to
Honeywell for the sale of products under a licensing arrangement with Honeywell.
The royalty is based on a percentage of sales made by Kyzen under the agreement.
In both 1999 and 2000, these royalty payments were less than $50,000.

FUTURE LEGISLATION AND GOVERNMENTAL REGULATION

The Company believes that the demand for its products is directly related to
governmental responses to and public concern with ozone depletion, CFC
elimination, use of hazardous or highly toxic cleaning agents and air and water
contamination. Decreased public concern over ozone depletion or water
contamination or less governmental pressure to remedy such problems could
substantially reduce demand for the Company's products. Although the Company is
not aware of any such pending or proposed federal legislation or regulation, any
legislation or regulation that limits the sale of the Company's products,
chemicals, services or components or limits the methods by which the Company's
products or chemicals are manufactured, installed or serviced could have a
material adverse effect on the financial condition or results of operations of
the Company.

RESEARCH AND DEVELOPMENT

The Company's research and development expenses in 2000 were $399,702 and in
1999 were $406,166. Research and development activities are expensed as incurred
because the majority of the Company's research and development activities
consist of developing technologically feasible products and processes for niche
specific applications. Management expects that the Company will increase its
research and development costs in the foreseeable future as the Company has
retained the services of more experienced chemists and formulators to focus on
developing new products for Aerospace and Semiconductor markets Technical Road.

EMPLOYEES

As of December 31, 2000, the Company had 33 full-time employees and 2 part-time
employees. The Company considers its employee relations to be satisfactory. The
management of the Company believes the current staffing level is adequate to
accomplish the necessary tasks for 2001 given historical growth levels of the
Company. Higher growth rates, acquisitions or licensing of new product lines may
require additional employees to properly staff increased sales, development and
technical support functions. Management of the Company intends to hire
additional personnel as they are required.

ENVIRONMENTAL, HEALTH AND SAFETY CONSIDERATIONS

The Company and its operations are subject to certain federal, state and local
laws and regulations relating to the discharge of pollutants into the air and
water, worker exposure to the chemical formulations manufactured and sold and
established standards for the reuse, storage and disposal of hazardous wastes.
The Company believes that its operations are in material compliance with current
laws and regulations relating to such matters. The management of the Company
estimates the current annual cost of compliance with environmental laws is less
than $10,000 per year. The Company derives a large portion of its revenue from
the sale of blended products made from finished materials purchased from various
chemical producers. These chemicals are periodically evaluated and/or
re-evaluated by the third party chemical producers for potential adverse health
effects resulting from exposure or overexposure.

ITEM 2.  DESCRIPTION OF PROPERTY

FACILITIES

The Company's headquarters are located at 430 Harding Industrial Dr., Nashville,
Tennessee. At this facility, the Company occupies approximately 24,000 square
feet of leased space, consisting of a research and development laboratory, a
Cleaning Applications and Evaluation Center, a chemical manufacturing facility
and sales, engineering, marketing and administrative offices. This property is
located in a well- maintained industrial park. The Company also leases an
approximately 7,425 square foot facility located at 540 Commercial Street,
Manchester, New Hampshire. The New Hampshire location houses a Cleaning
Application and Evaluation Center, Engineering Services Group manufacturing and
a regional sales office. Management believes the current facilities and leased
space are adequate to serve the Company's needs for at least the next year.


                                       8
<PAGE>   9

KYZEN CORPORATION

PART I (CONTINUED)


The Company conducts its operations from these facilities under two operating
lease agreements. The lease for the New Hampshire facility was renewed in May
2000 and extended to May 2002. The lease for the Tennessee facility, which was
schedule to terminate in February 2001, has been extended for a five-year term
with an option to renew for an additional five years. As of December 31, 2000,
future annual rental payments for the next five years are summarized as follows:

<TABLE>
                  <S>               <C>
                  2001              $142,055
                  2002               119,380
                  2003               107,180
                  2004               107,580
                  2005               111,980
</TABLE>

Total rent expense was $136,882 in 2000 and $132,425 in 1999. Included in rent
expense for 2000 and 1999 is approximately $100,910 and $97,462, respectively,
of rent paid to Charles Hawkins Company, whose pension plan is a shareholder of
the Company. The Company carries general property and casualty insurance in an
amount management considers adequate.

ITEM 3.  LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings and the Company is not aware
of any proceedings contemplated by any party or governmental authority against
the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the fourth quarter
of 2000.


                                       9
<PAGE>   10

KYZEN CORPORATION
PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock and Warrants to purchase Common Stock are quoted on
the OTC Bulletin Board (symbols KYZN and KYZNW, respectively) and listed on the
Boston Stock Exchange (symbols KYZ and KYZW, respectively). In February 2000,
the Company's securities were removed from the Nasdaq SmallCap Stock Market for
failure to meet the requirements for minimum bid price. The following table
provides the range of the high and low bid quotations (denominated in dollars or
fractions thereof) for the Company's Warrants and Common Stock (on the Nasdaq
SmallCap Stock Market prior to February, 2000 and on the OTC Bulletin Board
after February, 2000) for each quarter within the last two fiscal years. The
quotations reflect inter-dealer quotations without retail mark-up, mark-down or
commission and may not represent actual transactions.

<TABLE>
<CAPTION>
                                                                    Warrants           Common Stock
                                                  Dividends     High        Low      High         Low
                                                  ---------    ------      -----    ------      -----
<S>                                               <C>          <C>         <C>      <C>         <C>
Quarter ended:    March 31, 1999                      *         3/16       3/32     1  1/4      17/32
                  June 30, 1999                       *         5/32       3/32     1  3/8      11/16
                  September 30, 1999                  *         5/32        1/4     1  3/16     11/16
                  December 31, 1999                   *          1/4       1/32       15/16      5/16

                  March 31, 2000                      *         3/32       1/64       27/32     17/32
                  June 30, 2000                       *         5/64       1/32       27/32     19/32
                  September 30, 2000                  *         3/32       1/32       23/32     13/32
                  December 31, 2000                   *         3/32       1/64        9/16      7/32
</TABLE>

         * The Company historically has not paid dividends and does not expect
to pay dividends in the foreseeable future.

There were approximately 110 shareholders of record and approximately 1000
beneficial shareholders of Common Stock on December 31, 2000.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

RESULTS OF OPERATIONS

COMPARISON OF THE YEARS ENDED DECEMBER 31, 2000 AND DECEMBER 31, 1999

Net sales for the year ended December 31, 2000 from all business activities
increased approximately 2% or $133,542 to $5,893,392, as compared to $5,759,850
for the year ended December 31, 1999. Net chemical sales during the same time
period increased by 1%. These increases, although small in terms of percentage
change, have included some significant changes in our customer mix as several
large customers from prior years ceased doing business with the Company while
several others were added to the sales base. Sales of equipment, processes and
peripheral systems have increased 33% during the year ended December 31, 2000,
from 4% of net sales in 1999 to 5% in 2000. The Company remains focused on
chemical sales but continues to maintain its base of equipment sales, which help
to support future chemical sales.

Gross profit for the year ended December 31, 2000 decreased 3% or $86,517 to
$3,218,831 as compared to $3,305,348 for the year ended December 31, 1999
reflecting changes in our product sales mix .

Selling, marketing, general and administrative expenses for the year ended
December 31, 2000 decreased 4% or $116,617 to $2,957,805 as compared to
$3,074,422 for the year ended December 31, 1999. This decrease reflects the
absence of several non-recurring expenses related to the implementation of the
Company's Shareholder Rights Plan in 1999, and the non-recurring expenses
associated with the Company's redomestication from Utah to Tennessee, also
during 1999. Contributing to the decrease is a continual effort by management to
control costs in these areas while continuing to pursue customers in the
Company's niche markets.

Research and development expenses for the year ended December 31, 2000 decreased
2% or $6,464 to $399,702 from $406,166 for the year ended December 31, 1999. As
a percentage of gross sales, research and development expenses have remained
constant at 7% of sales for both 2000 and 1999, reflecting the continued
commitment by Kyzen to pursue new products and markets through research and
development. The Company intends to have higher research and development expense
in 2001 as the Company invests in accelerating development of new products in
aerospace and semiconductor markets. Management anticipates research and
development expenses to remain constant within a range of 6% to 8% of gross
sales.


                                       10
<PAGE>   11

KYZEN CORPORATION
PART II (CONTINUED)


The operating loss for the year ended December 31, 2000 was $138,676, compared
to a net loss of $175,240 for the year ended December 31, 1999. This represents
a decrease of $36,564. This decrease is primarily a reflection of the decreased
spending in selling, general and administrative expenses. With total sales up
slightly for the year and the lower gross margins, the continued control of
administrative spending and the absence of the non-recurring charges from 1999
have had a positive impact on operations. Net interest income of $24,605 for the
year ended December 31, 2000 compared to a net interest expense of $195,492 for
the year ended December 31, 1999. The expense in 1999 was the result of
management's decision to record a non-cash charge of $215,463 relating to the
write-off of interest receivable on certain long term notes receivable from
officers and former employees. These notes, which were secured by collateral of
322,227 shares of Kyzen Common Stock, were deemed to have been materially
impaired by the continued low trading prices of Kyzen Common Stock and the
shares were cancelled by the Company.

COMPARISON OF THE YEARS ENDED DECEMBER 31, 1999 AND DECEMBER 31, 1998

Net sales for the year ended December 31,1999 from all business activities
decreased approximately 2% or $118,124 to $5,759,850, as compared to $5,877,974
in the year ended December 31, 1998. Net chemical sales during the same time
period decreased 3% over the year ended December 31, 1998. These decreases are
due to reduced volume of sales of the Company's chemical cleaning agents to
existing customers, reduced international sales primarily due to the relocation
of a major customer's facility and cleaning process equipment, and the loss of a
major domestic customer that closed its production facility in December 1998.
The customer closing its production facility represented approximately 5% of net
sales for the year ended December 31, 1998 and provided no sales for the year
ended December 31, 1999. Sales of equipment, processes and peripheral systems
have increased 15% during the year ended December 31, 1999, from 3% of net sales
in 1998 to 4% of net sales in 1999. The Company remains focused on chemical
sales, but continues to maintain its base of equipment sales, which help to
support future chemical sales.

Gross profit for the year ended December 31, 1999 decreased 1% or $35,746 to
$3,305,348 as compared to $3,341,094 in the year ended December 31, 1998. Gross
profit margins from all business activities for 1999 remained at approximately
57%, the same as in 1998, reflecting the relatively consistent trends in sales
and costs of goods sold for chemicals and equipment.

Selling, marketing, general and administrative expenses for the year ended
December 31, 1999 increased 6% or $161,969 to $3,074,422 as compared to
$2,912,453 in the year ended December 31, 1998. This increase reflects
non-recurring expenses related to the implementation of the Company's
Shareholder Rights Plan, non-recurring expenses associated with the Company's
redomestication from Utah to Tennessee and increased spending for the
development and printing of new sales brochures during 1999.

Research and development expenses for the year ended December 31, 1999 decreased
4% or $18,169 to $406,166 from $424,335 for the year ended December 31, 1998.
The decrease was the result of personnel changes and timing in the ordering of
supplies for the year ended December 31, 1999 compared to the year ended
December 31, 1998. As a percentage of gross sales, research and development
expenses have remained constant at 7% of sales for both 1999 and 1998,
reflecting the continued commitment by Kyzen to pursue new products and markets
through research and development.

The operating loss for the year ended December 31, 1999 was $175,240, a net
increased loss of $179,546 compared to the operating income of $4,306 in 1998.
This increased loss is primarily the result of the increased selling, marketing,
general and administrative expenses mentioned above. With chemical sales down
slightly, and margins at the same level for both years, the increased
administrative expenses attributable mostly to one time charges in connection
with the Company's redomestication, resulted in operating losses in 1999.

Net interest decreased $258,689 from an income of $63,197 in the year ended
December 31, 1998 to an expense of $195,492 for the year ended December 31,
1999. This expense is the result of management's decision to record a non-cash
charge of $215,463 relating to the write-off of interest receivable on certain
long term notes receivable from officers and former employees. These notes,
which were supported by collateral of 322,227 shares of Kyzen Common Stock, were
deemed to have been materially impaired by the continued low trading prices of
Kyzen Common Stock. These shares have been cancelled by the Company.


                                       11
<PAGE>   12

KYZEN CORPORATION
PART II (CONTINUED)


ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. The Company adopted the provisions of this Statement
effective January 1, 2000. As the Company has not engaged, and does not plan to
engage, in derivative or hedging activities, adoption of this Statement has not
had a material impact on the Company's financial condition or results of
operations.

RECENT BUSINESS DEVELOPMENTS

Recent developments in the electronic assembly marketplace indicate a trend for
manufacturers to outsource their production to contract manufacturers. The
Company has traditionally sold both to original equipment manufacturers and
contract manufacturers and this trend may result in more consolidation of the
cleaning processes. This consolidation may have an effect on shrinking the
overall cleaning market. In addition, because contract manufacturers use a
number of production and cleaning techniques, cleaning opportunities may shift
from larger applications using in-line conveyorized machines to smaller
applications using batch cleaning processes. This trend towards batch cleaning
processes may also be accelerated by the growth in more miniaturized electronic
products. The Company has historically participated in the batch cleaning
market, and the Company anticipates continuing to emphasize the development of
new products and processes for this growing segment of the marketplace.

FORWARD-LOOKING STATEMENTS

Management has included in this report certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. When used,
statements which are not historical in nature, including the words "anticipate,"
"estimate," "should," "expect," "believe," "intend" and similar expressions are
intended to identify forward-looking statements. Such statements are, by their
nature, subject to certain risks and uncertainties. Among the factors that could
cause actual results to differ materially from those projected are the
following: business conditions and the general economy as they affect interest
rates; business conditions as they affect manufacturers of chemical raw
materials; the federal, state and local regulatory environment; changes in the
import and export rules, regulations and tariffs as they apply to countries
where the Company conducts its business; the ability of the Company to obtain
financing or equity capital with favorable terms and conditions; the
availability of new expansion and acquisition opportunities; changes in the
financial condition, corporate strategy or technology of the Company's primary
customers; and the ability of the Company to develop new competitive product
lines or add product lines through acquisitions, marketing agreements or
licensing agreements. Actual results, events and performance may differ
materially from those projected. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. The Company undertakes no obligation to release publicly the results of
any revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of funds have been the remaining proceeds from its
initial public offering in 1995, cash flows from operations and proceeds from a
line of credit with a bank established in the fourth quarter of 2000. The
Company's primary uses of funds are the funding of research and development of
new product lines, purchase of capital equipment, and sales and marketing
activities.

As of December 31, 2000, the Company had working capital of $1,203,463, compared
to $1,247,429 as of December 31, 1999, representing a decrease of $43,966. This
decrease results primarily from increases in short-term investments, accounts
receivable, and other assets offset by decreases in cash, inventory, accounts
payable and accrued expenses. Management attributes increases in accounts
receivable to strong shipments late in the fourth quarter of 2000 and the
extension of payment terms to certain significant customers. Increases in
short-term investments were the result of utilizing six months certificates of
deposit bearing higher interest rates, rather than the sweep investment accounts
used previously by the Company. In October, 2000, the Company obtained a bank
line of credit that provides for maximum borrowings of $200,000 and matures on
April 30, 2001. Borrowings under this line of credit will bear interest at
7.95%. The line of credit is secured by a $200,000 certificate of deposit. At
December 31, 2000, the Company had borrowed $100,000 under the line of credit.

Cash used by operations was $52,622 for the year ended December 31, 2000, a net
decrease of $243,652 from the $191,030 of cash provided by operations for the
year ended December 31, 1999. This increased use of cash is the result


                                       12
<PAGE>   13

KYZEN CORPORATION
PART II (CONTINUED)


of increases in accounts receivable, other current assets and interest
receivable from related parties and decreases in accounts payable, offset by
decreases in inventory.

Cash used by investing activities of $309,768 for the year ended December 31,
2000, represented an increase of $178,661 as compared to cash used by investing
activities for the year ended December 31, 1999 of $131,107. This increase in
cash usage is primarily the result of purchases of certain short term
investments in the form of six month certificates of deposit and the purchase of
fixed assets, mostly in the form of computers and the continued expenditures in
pursuit of patent and trademark registrations in the United States and in
foreign countries.

Capital expenditures for the year ended December 31, 2000 decreased 11% to
$72,946 from $82,206 for the year ended December 31, 1999. This insignificant
decrease of $9,260 reflects Kyzen's control over capital spending as well as the
effective use of capital assets that are available. Capital expenditures for
patents decreased slightly for the year ended December 31, 2000 to $36,822 from
$48,901 for the year ended December 31, 1999. While the Company continues to
pursue and protect its patent rights, fewer actions were taken or required to be
taken during 2000.

Cash flows from financing activities reflect no net activity for the year ended
December 31, 2000, representing a decrease of $5,201 from cash provided by
financing activities of $5,201 for the year ended December 31, 1999. During the
fourth quarter of 2000, the Company borrowed $100,000 under the line of credit.
The proceeds of this loan were used for a loan to Mr. Christopher B. Cannon, a
major shareholder, collateralized by 350,000 shares of the Company's Common
Stock, that is reflected as a reduction of Shareholders Equity in the balance
sheet. No long term notes required payment during 1999 and the Company received
proceeds of $5,794 from the exercise of stock options in 1999.

The Company anticipates, based on currently proposed plans and assumptions
relating to its operations and expansion plans, that the current cash balances
and the currently available credit line at a bank, together with projected cash
flow from operations will be sufficient to satisfy its contemplated cash
requirements at least through December 31, 2001. The Company's cash requirements
for the year 2001 and beyond will depend primarily upon the level of sales of
chemical products, product development, product procurement, sales and marketing
expenditures, timing of potential acquisitions and capital expenditures. If the
Company's plans change, or its assumptions change or prove to be inaccurate (due
to unanticipated expenses, delays, deterioration of customer base, financial
condition or otherwise), the Company may have to seek additional financing from
public or private debt and equity markets. There can be no assurance, however,
that these sources will be available to the Company on favorable terms, and
unfavorable markets could limit the Company's ability to obtain additional
financing. The Company obtained a short-term line of credit with a bank on terms
favorable to the Company. There can be no assurance that the Company will be
able to obtain additional or increased credit facilities on favorable terms if
additional financing of the Company's cash requirements becomes necessary.
Additionally, the Company plans to continue to investigate potential acquisition
candidates that are consistent with the Company's growth strategy, which would
create additional financing needs for the Company.

INTERNATIONAL TRADE DEVELOPMENTS

In 1998, manufacturers in the Peoples Republic of China became significant
suppliers of the Company. In 2000, the Company imported approximately 35% of its
raw material purchases from foreign sources, the largest being China. In
September 2000, the U.S. Senate voted to permanently normalize American trade
relations with China. This action provides some additional assurance to the
Company of the availability of the base raw material it has been using and
should assist the Company in negotiating more favorable prices with both
domestic and foreign suppliers.


                                       13
<PAGE>   14

KYZEN CORPORATION
PART II (CONTINUED)


ITEM 7.  FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                     Page
                                                                                                     ----
<S>                                                                                                  <C>
Report of Independent Accountants                                                                     15

Balance Sheet as of December 31, 2000 and 1999                                                        16

Statement of Operations for the years ended December 31, 2000 and 1999                                17

Statement of Changes in Shareholders' Equity for the years ended December 31, 2000 and 1999           18

Statement of Cash Flows for the years ended December 31, 2000 and 1999                                19

Notes to Financial Statements                                                                         20
</TABLE>


                                       14
<PAGE>   15

                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors
and Shareholders of
Kyzen Corporation

In our opinion, the accompanying balance sheet and the related statements of
operations, of changes in shareholders' equity and of cash flows present fairly,
in all material respects, the financial position of Kyzen Corporation at
December 31, 2000 and 1999, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.


/s/ PricewaterhouseCoopers LLP


PricewaterhouseCoopers LLP
Nashville, Tennessee
February 9, 2001


                                       15
<PAGE>   16

KYZEN CORPORATION
BALANCE SHEET


<TABLE>
<CAPTION>
                                                                                           DECEMBER 31,
                                                                                   2000                  1999
                                                                                -----------           -----------
<S>                                                                             <C>                   <C>
ASSETS
Current assets:
     Cash and cash equivalents                                                  $   226,649           $   589,039
     Short term investments                                                         200,000                    --
     Accounts receivable, net of allowance for doubtful accounts
         of $10,527 in 2000, and $8,334 in 1999                                     836,545               650,639
     Inventory                                                                      431,919               445,438
     Other                                                                           73,122                69,605
                                                                                -----------           -----------
         Total current assets                                                     1,768,235             1,754,721

Property and equipment, net                                                         483,445               673,545
Patents, net                                                                        228,285               210,040
Interest receivable from related parties                                              1,750                    --
                                                                                -----------           -----------

         Total assets                                                           $ 2,481,715           $ 2,638,306
                                                                                ===========           ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Notes Payable, current                                                     $   100,000           $        --
     Accounts payable and accrued expenses                                          462,641               505,832
     Accounts payable to related parties                                              2,131                 1,460
                                                                                -----------           -----------
         Total current liabilities                                                  564,772               507,292

                                                                                -----------           -----------
         Total liabilities                                                          564,772               507,292
                                                                                -----------           -----------
Commitments and contingencies (Note 10)
Shareholders' equity:
     Preferred Stock, $0.01 par value;10,000,000 shares
         authorized, no shares issued or outstanding in 2000 and
         1999; 100,000 Designated Series A Junior Participating
         Preferred Stock                                                                 --                    --
     Common Stock, $0.01 par value; 40,000,000 shares
         authorized, 4,777,787 and 5,100,014 shares, issued and
         outstanding in 2000 and 1999, respectively                                  47,778                51,001
     Additional paid-in capital                                                   5,202,717             5,299,494
     Treasury stock, at cost                                                           (313)                 (313)
     Accumulated deficit                                                         (3,333,239)           (3,219,168)
                                                                                -----------           -----------
         Total shareholders' equity                                               1,916,943             2,131,014
                                                                                -----------           -----------

         Total liabilities and shareholders' equity                             $ 2,481,715           $ 2,638,306
                                                                                ===========           ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                       16
<PAGE>   17

KYZEN CORPORATION
STATEMENT OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                        FOR THE YEAR ENDED
                                                                                           DECEMBER 31,
                                                                                     2000                    1999
                                                                                -----------           -----------
<S>                                                                             <C>                   <C>
Net sales                                                                       $ 5,893,392           $ 5,759,850
Cost of sales                                                                     2,674,561             2,454,502
                                                                                -----------           -----------
Gross profit                                                                      3,218,831             3,305,348

Operating costs and expenses:

         Selling, marketing, general and administrative expenses                  2,957,805             3,074,422
         Research and development expenses                                          399,702               406,166
                                                                                -----------           -----------
                  Total operating expenses                                        3,357,507             3,480,588
                                                                                -----------           -----------
                  Operating loss                                                   (138,676)             (175,240)

Other income (expense):
         Interest income                                                             26,925                60,738
         Interest expense                                                            (2,320)             (256,230)
                                                                                -----------           -----------
                  Total other income (expense)                                       24,605              (195,492)
                                                                                -----------           -----------
Net loss                                                                        $  (114,071)          $  (370,732)
                                                                                ===========           ===========

         Loss per share - basic                                                 $     (0.02)          $     (0.07)
                                                                                ===========           ===========
         Loss per share - diluted                                               $     (0.02)          $     (0.07)
                                                                                ===========           ===========
         Weighted average shares outstanding
                  - basic                                                         4,787,471             5,016,398
                                                                                ===========           ===========
         Weighted average shares outstanding
                  - diluted                                                       4,787,471             5,016,398
                                                                                ===========           ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                       17
<PAGE>   18

KYZEN CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                ADDITIONAL
                                          COMMON STOCK            PAID-IN      TREASURY STOCK      ACCUMULATED
                                        SHARES       AMOUNT       CAPITAL     SHARES    AMOUNT       DEFICIT         TOTAL
                                      ----------    --------    -----------   ------   -------    -------------    -----------
<S>                                   <C>           <C>         <C>           <C>      <C>        <C>              <C>
Balance at December 31, 1998           5,006,781    $ 50,068    $ 5,294,633     100    $ (313)    $ (2,848,436)    $ 2,495,952

Exercise of Stock Options                 93,333         933         16,567                                             17,500

Officer Loan Contra Account
Issuance of stock options
pursuant to a consulting
agreement                                                           (17,500)                                           (17,500)
                                                                      5,794                                              5,794
Net Loss                                                                                              (370,732)       (370,732)
                                      ----------    --------    -----------   -----    ------     ------------      ----------

Balance at December 31, 1999           5,100,114      51,001      5,299,494     100      (313)      (3,219,168)      2,131,014

Cancellation of shares from
Officers Notes Receivable               (322,327)     (3,223)         3,223                                                -0-

Shareholder Contra Equity                                          (100,000)                                          (100,000)
                                      ----------    --------    -----------   -----    ------     ------------      ----------

Net Loss                                                                                              (114,071)       (114,071)
                                      ----------    --------    -----------   -----    ------     ------------      ----------

Balance at December 31, 2000           4,777,787    $ 47,778    $ 5,202,717     100    $ (313)    $ (3,333,239)     $ 1,916,943
                                      ==========    ========    ===========   =====    ======     ============      ===========
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                       18
<PAGE>   19

KYZEN CORPORATION
STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                           FOR THE YEAR ENDED
                                                                                              DECEMBER 31,
                                                                                     2000                     1999
                                                                              --------------------    ---------------------
<S>                                                                            <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                                                  $         (114,071)     $         (370,732)
         Depreciation and amortization                                                    281,623                 286,193
         Adjustments to reconcile net loss to net cash (used in) provided
              by operating activities:
         (Increase) decrease in accounts receivable                                      (185,906)                181,078
         (Increase) decrease in inventory                                                  13,519                 (99,540)
         Increase in other current assets                                                  (3,517)                (23,512)
         (Increase) decrease in interest receivable from related parties                   (1,750)                215,463
         Increase (decrease) in accounts payable and accrued expenses                     (42,520)                  2,080
                                                                              --------------------    ---------------------

                  Net cash (used in) provided by operating activities                     (52,622)                191,030
                                                                              --------------------    ---------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of short-term investments                                                  (200,000)                     --
     Purchase of fixed assets                                                             (72,946)                (82,206)
     Purchase of patent rights and related expenditures                                   (36,822)                (48,901)
                                                                              --------------------    ---------------------

                  Net cash used by investing activities                                  (309,768)               (131,107)
                                                                              --------------------    ---------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Issuance of Stock Options                                                                 --                   5,794
     Payments of Long Term Debt                                                                --                    (593)
     Proceeds from issuance of long term debt                                             100,000                      --
     Issuance of loan to major shareholder                                               (100,000)                     --
                                                                              --------------------    ---------------------

                  Net cash provided by financing activities                                    --                   5,201
                                                                              --------------------    ---------------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     (362,390)                 65,124

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                            589,039                 523,915
                                                                              --------------------    ---------------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                       $          226,649      $          589,039
                                                                              ====================    =====================
</TABLE>

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash used for interest payments was $2,319 in 2000 and $338 in 1999. The Company
paid no income taxes in 2000 or 1999. During 1999, certain officers of the
Company exercised options to purchase 93,333 shares of common stock in the
amount of $17,500 by each such officer executing a promissory note payable to
the Company.


    The accompanying notes are an integral part of the financial statements.


                                       19

<PAGE>   20

KYZEN CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BACKGROUND

Kyzen Corporation ("Kyzen" or the "Company") was incorporated under the laws of
the State of Utah on March 9, 1990. On May 26, 1999 the Company reincorporated
under the laws of Tennessee. Kyzen was formed to develop environmentally safe
chemical solutions to replace ozone-depleting chlorinated solvents. The Company
manufactures and markets chemical solutions and processes used in
high-technology cleaning applications, including electronic assemblies and
precision metal and plastic components where precision cleaning processes are
required. The Company also manufactures and markets peripheral equipment such as
process control systems and chemical handling systems that enhance the use by
customers of the Company's chemical solutions. Sales of such equipment and
maintenance services totaled 5% of net sales in 2000 and 4% of net sales in
1999. Typically these products are sold as separate items and are integrated
into a cleaning process by the customer, or by the Company as part of a contract
service. The Company's operations are located in Nashville, Tennessee and
Manchester, New Hampshire. The Company's operations are conducted within one
reportable business segment. Sales to customers outside the United States
totaled $982,610 in 2000 and $699,583 in 1999, representing approximately 17% of
net sales in 2000 and 12% of net sales in 1999. No individual customer or
foreign country accounted for more than 10% of the Company's revenue in 2000 or
1999.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

The Company considers securities with an original maturity of three months or
less to be cash equivalents.

SHORT-TERM INVESTMENTS

By Company policy, short-term investments consist primarily of investment grade
commercial paper, direct obligations of the U.S. government and its agencies and
other short-term investment funds. The Company has classified all of its
investments in debt and equity securities as trading securities as defined by
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Debt and Equity Securities." In accordance with SFAS No. 115, the
Company records its investments at fair value and recognizes unrealized holding
gains and losses in earnings. Unrealized gains and losses recognized in earnings
during 2000 were not significant. There was a short-term investment in
certificates of deposit in the amount of $200,000 outstanding at December 31,
2000. Fair value is determined by the most recently traded price of the security
at the balance sheet date. Net realized gains or losses are determined on the
specific identification cost method.

CONCENTRATION OF CREDIT RISK

The Company sells its products to customers involved in a variety of industries
including electronics and computers. Kyzen performs continuing credit
evaluations of its customers and does not require customers to pledge
collateral. Historically, the Company has not experienced significant losses
related to individual customers or groups of customers in any particular
industry or geographic area.

REVENUE RECOGNITION

Revenue from sales of chemical products or services is recognized based upon
shipment of products or performance of services. Revenues and profits for
certain equipment contracts are recorded using the percentage of completion
method based on the product type, contract size and duration of the time to
completion. The percentage of completion is determined by relating the actual
costs of work performed to date to the current estimated total cost of the
respective contracts. Revenues and profits on all other contracts are recorded
as shipment is made. If estimated total costs on any of these contracts indicate
a loss, the entire amount of the estimated loss is recognized immediately.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying values of cash, accounts receivable and accounts payable approximate
fair value due to the short-term maturities of these assets and liabilities.

INVENTORIES

Inventories are valued at the lower of cost or market value with cost determined
using the weighted average, first in, first out (FIFO) method.


                                       20

<PAGE>   21

KYZEN CORPORATION
NOTES TO FINANCIAL STATEMENTS

INCOME TAXES

Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the income tax basis of the Company's assets and
liabilities.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost and depreciated on a straight-line
basis over the estimated useful lives (2 to 12 years) of the respective assets.
Leasehold improvements are amortized on a straight-line basis over the shorter
of the estimated useful life of the asset or the lease term.

PATENT COSTS

Patent costs, including the purchase of patent rights (Note 10) and legal costs
incurred related to issued and pending patents, are amortized using the
straight-line method over the useful lives of the patents, not exceeding 20
years. Accumulated amortization was $99,959 and $81,383 at December 31, 2000 and
1999, respectively.

IMPAIRMENT OF VALUE

In accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," long lived assets held and
used by the Company are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of assets may not be
recoverable. For purposes of evaluating the recoverability of long-lived assets,
the recoverability test is performed using undiscounted net cash flows before
consideration of interest expense. As of December 31, 1999, the Company
determined that certain long-lived assets of the Company had been impaired and
subsequently made adjustments to write off the carrying value of those assets to
reflect the changes. During the year ended December 31, 2000, no impairments
were incurred.

RESEARCH AND DEVELOPMENT COSTS

The Company is involved in research and development activities relating to new
product development and new uses for its chemicals. The Company expenses
research and development costs as incurred.

ADVERTISING COSTS

Costs incurred for producing and communicating advertising are expensed in the
period incurred and totaled $163,462 in 2000 and $167,733 in 1999. USE OF

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

EARNINGS PER SHARE

Basic earnings per share have been computed by dividing net loss by the weighted
average number of shares outstanding. Because the Company incurred a net loss in
1999 and in 2000, the effect of common stock options were not included in the
computation of diluted earnings per share as such effect was anti-dilutive.

COMPREHENSIVE INCOME

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income," which was adopted by the Company on January 1,
1998. SFAS No. 130 requires presentation of comprehensive income and its
components in the financial statements. The Company did not have any components
of comprehensive income other than net income (loss) in 2000 and 1999.


                                       21

<PAGE>   22

KYZEN CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 2 --  NOTES RECEIVABLE

Certain key executives and former employees of the Company exercised stock
options during 1994 by executing non-recourse promissory notes payable to the
Company. The notes bear interest at 5% per year and are secured by the Company's
stock held by such employees. Both principal and interest were due January 2000.
Due to collectibility concerns and the value of the Kyzen Common Stock which
secured these notes, the Company decided to write-off the interest receivable on
these notes as of December 31, 1999. These notes have also been written off and
the shares of Common Stock were cancelled by the Company during the first
quarter of 2000. Additionally, during 1999, certain key executives of the
Company exercised options to purchase 93,333 shares of the Company's common
stock by executing non-recourse promissory notes payable to the Company. The
notes bear interest at 5% per year and are secured by the Company's common stock
held by such employees. The interest income is being withheld from the
applicable executives' paychecks.

NOTE 3 -- INVENTORY

Inventory consists of the following:

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                         2000                    1999
                                                                 ---------------------    --------------------
<S>                                                               <C>                      <C>
Raw materials                                                     $          274,883       $          294,042
Work in process                                                                1,705                    1,705
Finished goods                                                               155,331                  149,691
                                                                 ---------------------    --------------------

                                                                  $          431,919       $          445,438
                                                                 =====================    ====================
</TABLE>

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                         2000                    1999
                                                                 ---------------------    --------------------
<S>                                                               <C>                     <C>
Manufacturing equipment                                           $          631,073       $          620,835
Office furniture and fixtures                                                461,209                  399,157
Demonstration equipment                                                      413,614                  413,614
Leasehold improvements                                                       278,231                  277,574
                                                                 ---------------------    --------------------

                                                                           1,784,127                1,711,180
Less-accumulated depreciation                                             (1,300,682)              (1,037,635)
                                                                 ---------------------    --------------------

                                                                  $          483,445       $          673,545
                                                                 =====================    ====================
</TABLE>

Depreciation expense totaled $281,623 in 2000 and $286,193 in 1999.

NOTE 5 -- ACCOUNTS PAYABLE AND ACCRUED EXPENSES

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                         2000                    1999
                                                                 ---------------------    --------------------
<S>                                                              <C>                      <C>
Accounts payable                                                  $          267,795       $          329,587
Salaries, wages and commissions                                               24,024                   21,035
Accrued expenses                                                             170,822                  155,210
                                                                 ---------------------    --------------------

                                                                  $          462,641       $          505,832
                                                                 =====================    ====================
</TABLE>


                                       22
<PAGE>   23

KYZEN CORPORATION
NOTES TO FINANCIAL STATEMENTS

NOTE 6 -- NOTES PAYABLE

CREDIT FACILITY OBLIGATIONS

During the fourth quarter of 2000, the Company entered into a line of credit
permitting maximum borrowing of $200,000 with The Bank of Nashville. This line
of credit has an origination date of October 31, 2000 and a maturity date of
April 30, 2001. Money borrowed by the Company pursuant to the line of credit
incurs interest at a rate of 7.95%. The obligation to repay any money borrowed
pursuant to the line of credit is secured by a $200,000 certificate of deposit
with the same maturity date, earning interest at 5.95%. The Company borrowed
$100,000 under this credit line during the fourth quarter of 2000.

NOTE 7 -- CAPITAL STOCK

COMMON STOCK

In April, 1999 the Shareholders approved an amendment to the Charter to change
the capital structure of the Company. The amended structure provides authorized
capitalization of 40,000,000 shares of common stock, $.01 par value per share
(the "Common Stock").

As indicated in Note 2, certain officers of the Company executed non-recourse
promissory notes in 1994 payable to the Company as payment for the exercise of
stock options. The total number of shares issued for these promissory notes was
322,227 with a value of $906,263. These shares were cancelled in the first
quarter of 2000.

WARRANTS

In conjunction with its initial public offering in 1995, the Company issued
warrants to purchase 1,650,000 shares of Common Stock at an exercise price of
$5.00 per share. The warrants are exercisable from February 4, 1996 through
August 4, 2002. The warrants are subject to redemption by the Company at $0.05
per warrant at any time on thirty days prior written notice, provided that the
closing price or the closing bid quotation for the Common Stock has equaled or
exceeded $7.50 for ten trading days. All warrants remained outstanding at
December 31, 2000.

PREFERRED STOCK

Under its amended capital structure, the Company is also authorized to issue up
to 10,000,000 shares of preferred stock with a par value of $0.01 per share (the
"Preferred Stock"). The terms of any Preferred Stock to be authorized, including
dividend rates, conversion prices, voting rights, redemption prices, and similar
matters, will be determined by the Board of Directors. As of December 31, 2000
there were no shares of preferred stock issued or outstanding and 100,000 shares
of the Preferred Stock has been designated Series A Junior Participating
Preferred.

STOCK OPTIONS

The Company has an incentive stock option plan. Under this plan, officers,
directors and other key employees of the Company may be granted options, each of
which allows for the purchase of shares of the Company's Common Stock. The per
share exercise price of the options granted under the plan is equal to the
estimated fair value of the Common Stock on such date as determined by the Board
of Directors, except for options granted to 10% or greater shareholders for
which the per share exercise price is 110% of the estimated fair value. Under
the plan, the Company has reserved 600,000 shares of Common Stock for issuance
upon exercise of the options. The stock options have terms of five to ten years
from the date of the grant and vest ratably over a three-year period, except for
options granted to directors, which vest immediately upon grant. In 1993, the
Company also granted options to purchase 106,666 shares of the Company's Common
Stock to three employees under a prior non-qualified plan. As of December 31,
1999, all of those options have been exercised.

In 1999, the Company granted 250,000 non-qualified options to Institutional
Equity Corporation (formerly Redstone Securities) at exercise prices ranging
from $0.50 to $3.00 as compensation for future financial advisory services. The
Company recognized $5,794 as compensation expense in the quarter ending
December 31, 1999 as the fair market value of this grant. On November 23, 2000,
these 250,000 non-qualified option grants expired without exercise.

During 2000, the Company granted options to key employees to purchase 30,000
shares of the Company's Common Stock at exercise prices ranging from $0.41 to
$0.69. There were 59,300 stock options granted in prior years to certain former
employees that expired due to the cessation of employment by these individuals.


                                       23
<PAGE>   24

KYZEN CORPORATION
NOTES TO FINANCIAL STATEMENTS

In accordance with the provisions of SFAS No. 123, "Accounting for Stock Based
Compensation," the Company applies Accounting Principles Board Opinion No. 25
and related interpretations in accounting for its stock option plans and
accordingly, does not recognize compensation costs for options issued to
employees and directors. If the Company had elected to recognize compensation
cost based on the fair value of the options granted at grant date as prescribed
by SFAS 123, net loss and loss per share would have been increased to the pro
forma amounts indicated in the table below:

<TABLE>
<CAPTION>
                                                                         2000                    1999
                                                                 ---------------------    --------------------
     <S>                                                         <C>                      <C>
     Net loss, reported                                           $         (114,071)      $         (370,732)
         Net loss, pro forma                                                (150,239)                (498,810)
     Net loss, per share reported (basic and diluted)                          (0.02)                   (0.07)
     Net loss per share, pro forma (basic and diluted)                         (0.03)                   (0.10)
</TABLE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes options-pricing model with the following assumptions:

<TABLE>
<CAPTION>
                                                                         2000                    1999
                                                                 ---------------------    --------------------
     <S>                                                         <C>                      <C>
     Expected dividend yield                                              0%                      0%
     Expected stock price volatility                                    94.4%                    87.5%
     Risk-free interest rate                                            5.15%                    5.6%
     Expected life of options                                         1-10 years              1-10 years
</TABLE>

The weighted average fair value at date of grant for options granted during 2000
and 1999 was $ 0.54 and $0.20 per option, respectively. Stock option
transactions were as follows:

<TABLE>
<CAPTION>
                                                                                        WEIGHTED AVERAGE
                                                           NUMBER OF SHARES              EXERCISE PRICE
                                                         ---------------------    ---------------------------
<S>                                                      <C>                      <C>
OUTSTANDING, DECEMBER 31, 1998                                      564,150        $          2.30
Granted                                                             386,867                   1.61
Exercised                                                           (93,333)                  0.18
Forfeited                                                           (76,634)                  2.96
                                                         ---------------------    ---------------------------
OUTSTANDING, DECEMBER 31, 1999                                      781,050        $          2.15
Granted                                                              30,000                   0.55
Exercised                                                                --
Forfeited                                                          (309,300)       $          1.62
                                                         ---------------------    ---------------------------

OUTSTANDING, DECEMBER 31, 2000                                      501,750        $          2.38
                                                         =====================    ===========================
</TABLE>


                                       24

<PAGE>   25

KYZEN CORPORATION
NOTES TO FINANCIAL STATEMENTS

The following table summarizes information concerning outstanding and
exercisable options at December 31, 2000:

<TABLE>
<CAPTION>
                            OPTIONS OUTSTANDING                                        OPTIONS EXERCISABLE
----------------------------------------------------------------------------     ---------------------------------
RANGE OF EXERCISE                      WEIGHTED AVERAGE        WEIGHTED                             WEIGHTED
      PRICES            NUMBER      REMAINING CONTRACTUAL       AVERAGE             NUMBER          AVERAGE
                     OUTSTANDING             LIFE           EXERCISE PRICE        EXERCISABLE    EXERCISE PRICE
                                           (YEARS)
------------------- --------------- ----------------------- ----------------     -------------- -----------------
   <S>              <C>             <C>                     <C>                  <C>            <C>
   $0.50 - 0.75             91,600           8.6                  $0.68                 64,285        $0.74
   1.00 - 1.38              48,700           7.5                   1.30                 43,192         1.31
   1.69 - 1.86              62,000           6.7                   1.81                 60,860         1.82
   2.81 - 3.99             298,950           3.5                      3.18             298,950         3.18
       4.50                    500           3.0                   4.50                    500         4.50
                    ---------------                                              --------------
                           501,750                                                     467,787
                    ===============                                              ==============
</TABLE>

NOTE 8 -- RETIREMENT PLAN

The Company implemented the Kyzen Corporation 401(k) Retirement Plan (the
"Plan") in 1997. Following initial enrollment, employees become eligible to
participate in the Plan after 90 days of their initial employment. Employees may
contribute as little as 1% or up to 20% of their salary to the Plan. The Company
pays all expenses of the Plan and matches employee contributions on a
discretionary basis in such amounts as are determined by the Company's Board of
Directors. Matches of employee contributions are available to the employee based
on a six year vesting schedule that is prorated at different percentages for
each year vested. The Company did not match or make other contributions to the
Plan during 2000 or 1999. The Plan expense for 2000 and 1999 was $3,071 and
$2,986, respectively.


NOTE 9 -- INCOME TAXES

The Company did not record a provision for income taxes in 1999 or 2000 due to
the availability of net operating loss carryforwards to offset taxable income
due to the Company's net losses in both years. A reconciliation of the total
provision for income taxes with amounts determined by applying the statutory
U.S. federal income tax rate to income before income taxes is as follows:

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                          2000                    1999
                                                                 ---------------------    --------------------
<S>                                                              <C>                      <C>
Income tax benefit at statutory rate                             $           (38,784)     $          (126,049)
State income taxes, net of federal tax provision                              (4,517)                  (9,543)
Research and development credit, net of federal tax provision                (30,764)                 (15,913)
Other                                                                         16,164                   15,841
Adjustments of prior years' taxes                                                 --                   95,177
Change in valuation allowance                                                 57,901                   40,487
                                                                 ---------------------    --------------------

Total income tax provision                                       $                --       $               --
                                                                 =====================    ====================
</TABLE>

Significant components of the Company's deferred tax assets at December 31, 2000
and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,
                                                                         2000                    1999
                                                                 ---------------------    --------------------
<S>                                                              <C>                      <C>
Net operating loss carryforwards                                  $          767,381       $          786,509
Research and development credits                                             202,754                  156,142
Other                                                                         41,316                   10,899
                                                                 ---------------------    --------------------

Deferred tax assets                                                        1,011,451                  953,550
Valuation allowance                                                       (1,011,451)                (953,550)
                                                                 ---------------------    --------------------

Net deferred tax assets                                           $               --       $               --
                                                                 =====================    ====================
</TABLE>


                                       25

<PAGE>   26

KYZEN CORPORATION
NOTES TO FINANCIAL STATEMENTS

At December 31, 2000, the Company had net operating loss carryforwards available
to reduce future taxable income of approximately $2,128,353. The carryforwards
expire between 2007 and 2015. The Company has provided a valuation allowance for
the entire balance of its deferred tax assets, including its net operating loss
carryforwards, due to the uncertainty of future realization.


NOTE 10 -- COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company conducts its operations from the facilities under two operating
lease agreements. The lease for the New Hampshire facility was renewed in May
2000 and extended to May 2002. The lease for the Tennessee facility, which was
scheduled to terminate in February 2001, has been extended for a five-year term
and the Company has an option to renew the lease for an additional five years.
As of December 31, 2000, future annual rental payments for the next five years
are summarized as follows (not including optional periods):

<TABLE>
                  <S>                        <C>
                  2001                       $142,055
                  2002                        119,380
                  2003                        107,180
                  2004                        107,580
                  2005                        111,980
</TABLE>

Total rent expense was $136,882 in 2000 and $132,425 in 1999. Included in rent
expense for 2000 and 1999 is approximately $100,910 and $97,462, respectively,
of rent paid to Charles Hawkins Company, whose pension plan is a shareholder of
the Company.

PATENTS

The Company's original patents were for products developed by a founder of the
Company while employed by Bix Manufacturing Company ("Bix") and Delphi
Automotive Systems ("Delphi", formerly Delco Electronics, a division of General
Motors). The joint effort was undertaken to develop a more effective
non-chlorinated fluorocarbon cleaning solvent which would be environmentally
neutral. A patent was applied for jointly by Bix and Delphi in 1989. The Company
purchased the patent rights from Bix in 1990 and two patents were subsequently
issued jointly to Kyzen and Delphi in the United States. Delphi retained the
right to use chemistry developed under the patent and the Company retains the
right to market the patented technology. However, if the Company enters into a
license or royalty arrangement for the patented technology, the resulting
license fee or royalty revenues will be shared jointly between Delphi and the
Company.

The Company is also required to pay royalties to Bix, a shareholder of the
Company. Royalties are based on 2% of revenues related to the patented
chemistry, and amounted to $41,100 in both 2000 and 1999. The Company is
currently settling its royalty obligation through consulting services performed
by the Company. In addition, the Company also pays a royalty to Honeywell
International, Inc. (formerly AlliedSignal) for the sale of products under a
licensing arrangement made with Honeywell. The royalty is based on a percentage
of sales made by Kyzen under the agreement. In 1999 and 2000, these royalty
payments were less than $50,000.

NOTE 11 -- RELATED PARTY TRANSACTIONS

The Company purchased approximately $172,000 and $188,000 of advertising,
investor relations, and transportation services from, and paid rent to,
shareholders in 2000 and 1999, respectively. The Company entered into a loan
with Mr. Christopher B. Cannon in the amount of $100,000 which is discussed in
NOTE 12 below.

NOTE 12 -- SUBSEQUENT EVENTS

The Company, with Board approval, extended the terms of a promissory note dated
November 1, 2000 made by Mr. Christopher B. Cannon, a major shareholder, for up
to an additional 90 days from the previous due date. The principal amount of the
note, together with the interest accrued thereon, was due and payable on January
29, 2001. The original principal amount of the note is $100,000. This amount
bears interest at a rate of 9.5% per year. The obligation to repay the principal
and interest due on the note is secured pursuant to a Stock Pledge and Security
Agreement pursuant to which Mr. Cannon has pledged to the Company 350,000 shares
of the Company's Common Stock. This transaction is reflected as a reduction of
Shareholders Equity in the balance sheet.


                                       26

<PAGE>   27

KYZEN CORPORATION
PART II (CONTINUED)

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.


                                       27

<PAGE>   28

KYZEN CORPORATION
PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Incorporated by reference to Registrant's definitive Proxy Statement relating to
the Annual Meeting of Shareholders to be held on April 18, 2001.

ITEM 10. EXECUTIVE COMPENSATION

Incorporated by reference to Registrant's definitive Proxy Statement relating to
the Annual Meeting of Shareholders to be held on April 18, 2001.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated by reference to Registrant's definitive Proxy Statement relating to
the Annual Meeting of Shareholders to be held on April 18, 2001.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference to Registrant's definitive Proxy Statement relating to
the Annual Meeting of Shareholders to be held on April 18, 2001.


                                       28

<PAGE>   29

KYZEN CORPORATION
PART III (CONTINUED)

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

<TABLE>
<CAPTION>
     EXHIBIT NO.                                DESCRIPTION
     -----------                                -----------
     <S>                   <C>
     Exhibit 3.1           Registrant's Charter (6)
     Exhibit 3.2           Amended Bylaws of Registrant (6)
     Exhibit 4.1           Warrant and Registration Rights Agreement by and among Kyzen Corporation, Paulson
                           Investment Company, Inc., Nutmeg Securities, Ltd. and LaJolla Securities, dated
                           August 3, 1995 (1)
     Exhibit 4.5           Specimen of Common Stock Certificate (7)
     Exhibit 4.6           Specimen of Warrant Certificate (7)
     Exhibit 10.1          Lease Agreement, dated June 11, 1993, between Harding Business Park, a partnership, and Registrant
                           for Registrant's headquarters and chemical manufacturing facilities (1)
     Exhibit 10.3          Employee Agreements, dated January 1, 1994 with officers and key employees of Registrant (1)
                                    (a)      Kyle J. Doyel*
                                    (b)      Michael L. Bixenman*
                                    (c)      Thomas M. Forsythe*
     Exhibit 10.4          1994 Employee Stock Option Plan* and forms of Stock Option Grant, Acceptance and
                           Exercise Notice and Agreement (1)
     Exhibit 10.5          First Amendment to the 1994 Employee Stock Option Plan* (1)
     Exhibit 10.7          Purchase Agreement, dated May 1, 1990, between Bix Manufacturing Company, Inc. and
                           Registrant (1)
     Exhibit 10.8          Technology Exchange Agreement, dated December 17, 1993, between Bix Manufacturing
                           Company, Inc. and Registrant (1)
     Exhibit 10.20         Warrant Agreement between Kyzen Corporation and American Stock Transfer & Trust
                           Company (1)
     Exhibit 10.21         Reassignment of Patents to Bix Manufacturing Company, Inc. (1)
     Exhibit 10.24         Lease Agreement, dated April 25, 1995, between Five-Forty North Associates, a
                           partnership, and the Registrant for Registrant's offices, demonstration facility, and
                           equipment manufacturing facilities (2)
     Exhibit 10.25         Amended Lease Agreement, dated December 30, 1997, between Five-Forty North Associates, a
                           partnership, and the Registrant for Registrant's offices, demonstration facility, and equipment
                           manufacturing facilities (2)
     Exhibit 10.29         Amended Lease Agreement, dated April 1, 1998, between Harding Business Park, a partnership, and the
                           Registrant for the Registrant's Nashville, TN headquarters and chemical manufacturing facilities (3)
     Exhibit 10.30         Rights Agreement, dated January 15, 1999, between Kyzen Corporation and American Stock
                           Transfer & Trust (4)
     Exhibit 10.31         Form of Amendment No. 1 to Employment Agreements with certain officers of the Company: (5)
                                    (a)      Kyle J. Doyel*
                                    (b)      Michael L. Bixenman*
                                    (c)      Thomas M. Forsythe*
     Exhibit 10.32         Consulting Agreement with Redstone Securities
     Exhibit 10.33         Amended Lease Agreement, dated February 21, 2001, between Harding Business Park, a partnership,
                           and the Registrant for the Registrant's Nashville, TN headquarters and chemical manufacturing facilities
     Exhibit 10.34         Amended Lease Agreement, dated May 2, 2000, between Five-Forty North Associates, a partnership,
                           and the Registrant for Registrant's offices, demonstration facility, and equipment manufacturing
                           facilities
     Exhibit 10.35         Stock Pledge, Promissory Note and Irrevocable Stock Power from Mr. Christopher B.
                           Cannon
     Exhibit 10.36         Promissory Note, Assignment of Deposit Account with The Bank of Nashville
     Exhibit 23.1          Consent of PricewaterhouseCoopers LLP
</TABLE>


                                       29

<PAGE>   30

KYZEN CORPORATION
PART III (CONTINUED)

          *       Indicates a management contract or compensation plan or
                  arrangement.
         (1)      Filed as an exhibit to the Company's Registration Statement on
                  Form SB-2 (No. 33-91854-A) previously filed pursuant to the
                  Securities Act of 1933 and hereby incorporated by reference.
         (2)      Filed as an exhibit to the Company's annual report on Form
                  10-KSB for the year ended December 31, 1997, previously filed
                  pursuant to the Securities Exchange Act of 1934 and hereby
                  incorporated by reference.
         (3)      Filed as an exhibit to the Company's quarterly report on Form
                  10-QSB for the quarter ended March 31, 1998, previously filed
                  pursuant to the Securities Exchange Act of 1934 and hereby
                  incorporated by reference.
         (4)      Filed as an exhibit to the Company's filing on Form 8-A dated
                  January 15, 1999, previously filed pursuant to the Securities
                  Exchange Act of 1934 and hereby incorporated by reference.
         (5)      Filed as an exhibit to the Company's quarterly report on Form
                  10-QSB for the quarter ended June 30, 1999, previously filed
                  pursuant to the Securities Exchange Act of 1934 and hereby
                  incorporated by reference.
         (6)      Filed as an exhibit to the Company's Registration Statement on
                  Form S-3 (No. 333-82021) dated June 30, 1999, previously filed
                  pursuant to the Securities Act of 1933 and hereby incorporated
                  by reference.
         (7)      Filed as an exhibit to the Company's Registration Statement on
                  Form S-3/A (No. 333-82021) dated August 2, 1999, previously
                  filed pursuant to the Securities Act of 1933 and hereby
                  incorporated by reference.

         (b)      Reports on Form 8-K

         During the fourth quarter of 2000, the Company filed no reports on
         Form 8-K.


                                       30

<PAGE>   31

KYZEN CORPORATION
PART III (CONTINUED)

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

(Registrant)                        Kyzen Corporation
             ------------------------------------------------------------------



By       /s/  Kyle J. Doyel
  -----------------------------------------------------------------------------
         Kyle J. Doyel, President, CEO (Principal Executive Officer), Director


Date:         March 30, 2001
     -------------------------------


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.



By       /s/  Michael L. Bixenman
  -----------------------------------------------------------------------------
         Michael  L. Bixenman, Chairman, Vice President, Director


Date:    March 30, 2001
     -------------------------------



By       /s/  Kyle J. Doyel
  -----------------------------------------------------------------------------
         Kyle J. Doyel, President, CEO (Principal Executive Officer), Director


Date:    March 30, 2001
     -------------------------------



By       /s/  Thomas M. Forsythe
  -----------------------------------------------------------------------------
  Thomas M. Forsythe, Vice President, Treasurer (Principal Accounting Officer
  and Principal Financial Officer), Director


Date:    March 30, 2001
     -------------------------------



By       /s/  John A. Davis III
  -----------------------------------------------------------------------------
         John A. Davis, III, Director


Date:    March 30, 2001
     -------------------------------


By       /s/  James A. Gordon
  -----------------------------------------------------------------------------
         James A. Gordon, Director


Date:    March 30, 2001
     -------------------------------



By       /s/  Janet Korte Baker
  -----------------------------------------------------------------------------
         Janet Korte Baker, Director


Date:    March 30, 2001
     -------------------------------


                                       31

<PAGE>   32

KYZEN CORPORATION
PART III (CONTINUED)

                           EXHIBIT INDEX AND EXHIBITS

<TABLE>
<CAPTION>
     EXHIBIT NO.                                DESCRIPTION
     -----------                                -----------
     <S>                   <C>
     Exhibit 3.1           Registrant's Charter (13)
     Exhibit 3.2           Amended Bylaws of Registrant (13)
     Exhibit 4.1           Warrant and Registration Rights Agreement by and among Kyzen Corporation, Paulson
                           Investment Company, Inc., Nutmeg Securities, Ltd. and LaJolla Securities, dated
                           August 3, 1995 (8)
     Exhibit 4.5           Specimen of Common Stock Certificate (14)
     Exhibit 4.6           Specimen of Warrant Certificate (14)
     Exhibit 10.1          Lease Agreement, dated June 11, 1993, between Harding Business Park, a partnership, and Registrant
                           for Registrant's headquarters and chemical manufacturing facilities (8)
     Exhibit 10.3          Employee Agreements, dated January 1, 1994 with officers and key employees of Registrant (8)
                                    (a)      Kyle J. Doyel*
                                    (b)      Michael L. Bixenman*
                                    (c)      Thomas M. Forsythe*
     Exhibit 10.4          1994 Employee Stock Option Plan* and forms of Stock Option Grant, Acceptance and
                           Exercise Notice and Agreement (8)
     Exhibit 10.5          First Amendment to the 1994 Employee Stock Option Plan* (8)
     Exhibit 10.7          Purchase Agreement, dated May 1, 1990, between Bix Manufacturing Company, Inc. and
                           Registrant (8)
     Exhibit 10.8          Technology Exchange Agreement, dated December 17, 1993, between Bix Manufacturing
                           Company, Inc. and Registrant (8)
     Exhibit 10.20         Warrant Agreement between Kyzen Corporation and American Stock Transfer & Trust
                           Company (8)
     Exhibit 10.21         Reassignment of Patents to Bix Manufacturing Company, Inc. (8)
     Exhibit 10.24         Lease Agreement, dated April 25, 1995, between Five-Forty North Associates, a
                           partnership, and the Registrant for Registrant's offices, demonstration facility, and
                           equipment manufacturing facilities (9)
     Exhibit 10.25         Amended Lease Agreement, dated December 30, 1997, between Five-Forty North Associates, a
                           partnership, and the Registrant for Registrant's offices, demonstration facility, and equipment
                           manufacturing facilities (9)
     Exhibit 10.29         Amended Lease Agreement, dated April 1, 1998, between Harding Business Park, a partnership, and the
                           Registrant for the Registrant's Nashville, TN headquarters and chemical manufacturing facilities (10)
     Exhibit 10.30         Rights Agreement, dated January 15, 1999, between Kyzen Corporation and American Stock
                           Transfer & Trust (11)
     Exhibit 10.31         Form of Amendment No. 1 to Employment Agreements with certain officers of the Company: (12)
                                    (a)      Kyle J. Doyel*
                                    (b)      Michael L. Bixenman*
                                    (c)      Thomas M. Forsythe*
     Exhibit 10.32         Consulting Agreement with Redstone Securities
     Exhibit 10.33         Amended Lease Agreement, dated February 21, 2001, between Harding Business Park, a partnership,
                           and the Registrant for the Registrant's Nashville, TN headquarters and chemical manufacturing facilities
     Exhibit 10.34         Amended Lease Agreement, dated May 2, 2000, between Five-Forty North Associates, a partnership,
                           and the Registrant for Registrant's offices, demonstration facility, and equipment manufacturing
                           facilities
     Exhibit 10.35         Stock Pledge, Promissory Note and Irrevocable Stock Power from Mr. Christopher B.
                           Cannon
     Exhibit 10.36         Promissory Note, Assignment of Deposit Account with The Bank of Nashville
     Exhibit 23.1          Consent of PricewaterhouseCoopers LLP
</TABLE>


                                       32

<PAGE>   33

KYZEN CORPORATION
PART III (CONTINUED)

          *       Indicates a management contract or compensation plan or
                  arrangement.
         (8)      Filed as an exhibit to the Company's Registration Statement on
                  Form SB-2 (No. 33-91854-A) previously filed pursuant to the
                  Securities Act of 1933 and hereby incorporated by reference.
         (9)      Filed as an exhibit to the Company's annual report on Form
                  10-KSB for the year ended December 31, 1997, previously filed
                  pursuant to the Securities Exchange Act of 1934 and hereby
                  incorporated by reference.
         (10)     Filed as an exhibit to the Company's quarterly report on Form
                  10-QSB for the quarter ended March 31, 1998, previously filed
                  pursuant to the Securities Exchange Act of 1934 and hereby
                  incorporated by reference.
         (11)     Filed as an exhibit to the Company's filing on Form 8-A dated
                  January 15, 1999, previously filed pursuant to the Securities
                  Exchange Act of 1934 and hereby incorporated by reference.
         (12)     Filed as an exhibit to the Company's quarterly report on Form
                  10-QSB for the quarter ended June 30, 1999, previously filed
                  pursuant to the Securities Exchange Act of 1934 and hereby
                  incorporated by reference.
         (13)     Filed as an exhibit to the Company's Registration Statement on
                  Form S-3 (No. 333-82021) dated June 30, 1999, previously filed
                  pursuant to the Securities Act of 1933 and hereby incorporated
                  by reference.
         (14)     Filed as an exhibit to the Company's Registration Statement on
                  Form S-3/A (No. 333-82021) dated August 2, 1999, previously
                  filed pursuant to the Securities Act of 1933 and hereby
                  incorporated by reference.


                                       33

<PAGE>   34

KYZEN CORPORATION
PART III (CONTINUED)

Exhibit 10.33              Amended Lease Agreement

LEASE EXTENSION AND AMENDMENT AGREEMENT

FOR AND IN CONSIDERATION of the mutual benefits to be derived therefrom, it is
hereby understood and agreed that the Lease Agreement dated June 11, 1993, and
further amended June 28, 1993, February 1, 1996 and February 1, 1999, by and
between Harding Business Park, a Partnership, known as Lessor, and Kyzen
Corporation, a Tennessee Corporation, known as Lessee, is hereby amended as
follows:

The Lessor and Lessee hereby agree to renew the lease under the same terms and
conditions for the currently occupied 24,000 square feet and that the monthly
rental rate shall be as follows:

Five Year Lease:           February 1, 2001 - January 31, 2003 = $8,565.00

                           February 1, 2003 - January 31, 2005 = $8,965.00

                           February 1, 2005 - January 31, 2006 = $9,365.00

         Additionally, the Lessor hereby grants to Lessee, if not in default of
the Lease, one (1) five (5) year option to renew under the same terms and
conditions of the Lease, except that the rental rate shall be as follows:



Five Year Option to Renew: February 1, 2006 - January 31, 2007 = $9,365.00

                           February 1, 2007 - January 31, 2009 = $9,765.00

                           February 1, 2009 - January 31, 2011 = $10,165.00

         Lessee shall give not less than one hundred twenty (120) days prior
written notice of its intent to renew the Lease. In the event notice is not
received in such manner, the option to renew is thereby deemed waived.

         The Lessor and Lessee agree that this Lease Amendment supercedes all
previous extension and amendment agreements.

ACCEPTED AND AGREED:                         Dated 02/21/01

                           LESSOR:  Harding Business Park, a Partnership



                           By: /s/ Charles W. Hawkins, III
                           -------------------------------



                           By: /s/ Vaden  Lackey, Jr.
                           -------------------------------


                           LESSEE: Kyzen Corporation



                           By: /s/ Kyle J. Doyel
                           --------------------------------


                                       34

<PAGE>   35

KYZEN CORPORATION
PART III (CONTINUED)

Exhibit 10.34     Amended Lease Agreement

May 2, 2000

John Sanders, Controller

Kyzen Corporation

430 Harding Industrial Drive

Nashville, TN  37211

Re:   Lease Extension

      540 North Commercial Street

      Manchester, NH

Dear Mr. Sanders:

This will acknowledge receipt of your letter of April 25, 2000, and confirm that
your Lease Agreement has been extended in accordance with its terms for the
period of June 1, 2000 through May 31, 2002.

The monthly rent, inclusive of the added 800 square feet, will be $3,320.00.

We will also change the contact name from Mr. Herrmann to David Haskell, as
requested.

In addition to the above provisions, we are enclosing a copy of the revised
Rules and Regulations to the Lease Agreement.

We are pleased that Kyzen Corporation will be continuing at 540.


Very truly yours,



/s/ John C. Madden
------------------------------
President


                                       35

<PAGE>   36

KYZEN CORPORATION
PART III (CONTINUED)

Exhibit 10.35     Stock Pledge, Promissory Note and Irrevocable Stock Power
                                 from Mr. Christopher B. Cannon
                               STOCK PLEDGE AND SECURITY AGREEMENT

         This Stock Pledge and Security Agreement (this "Agreement") is made and
entered into as of November 1, 2000 by and between Kyzen Corporation, a
Tennessee corporation ("Lender"), and Christopher B. Cannon ("Pledgor").

                                   WITNESSETH:

         WHEREAS, Pledgor is indebted to Lender pursuant to that certain
Promissory Note dated November 1, 2000 in the original principal amount of
$100,000 (the "Promissory Note"); and

         WHEREAS, Pledgor has agreed to pledge and assign Pledgor's interest in
certain shares of stock of Lender owned by Pledgor as security for the payment
and performance of the obligations of Pledgor under the Promissory Note.

         NOW, THEREFORE, for and in consideration of the premises, the covenants
and agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Pledgor
and Lender agree as follows:

         1.       Pledge, Assignment and Security Interest. Pledgor pledges,
assigns, sets over and grants to Lender a continuing security interest in and to
all of the instrument(s) described below, together with all replacements,
accessions, split ups, substitutions, additions, and products and proceeds and
distributions thereof and any and all other rights as may now or hereafter
derive or accrue therefrom (the "Collateral"):

                  Stock Certificate Nos. KZ 0469 evidencing an
                  aggregate of three hundred fifty thousand
                  (350,000) shares of the common stock of Lender
                  (the "Stock"). In any event, Pledgor shall
                  maintain at all times Collateral with an
                  aggregate market value equal to at least One
                  Hundred and Fifty percent (150%) of the
                  outstanding principal balance that is due and
                  payable under the Promissory Note (the "Secured
                  Debt"), and deliver in accordance with Section
                  5 hereof any additional Collateral necessary to
                  reach such Collateral value or repay sufficient
                  principal to reduce the outstanding balance of
                  the Secured Debt accordingly. Any such
                  additional Collateral delivered in accordance
                  with Section 5 hereof by Pledgor to Lendor at
                  any time shall automatically constitute part of
                  the Collateral hereunder.

         2.       Secured Obligations. This Agreement secures the prompt payment
in full when due, whether at the stated maturity, by acceleration or otherwise,
of the indebtedness evidenced by the Promissory Note, as the same may be amended
from time to time, and all extensions and renewals thereof, and the obligations
of Pledgor hereunder (together, the "Obligations"). Lender's security interest
in the Stock shall be perfected by Lender's possession thereof, together with
stock powers executed in blank.

         3.       Warranties. Pledgor represents and warrants as follows:

         a.       Pledgor is the sole owner of the Collateral free and clear of
any claims, liens, security interests, encumbrances and the like (other than to
Lender). Pledgor will defend the Collateral against all persons who, at any
time, may claim an interest in the Collateral adverse to Lender.

         b.       Pledgor has full power and authority to pledge the Collateral
and enter into this Agreement.

         c.       All certificates, shares of stock, bonds or other securities
or instruments comprised of the Collateral are validly issued, fully paid and
non-assessable.

         d.       There are no outstanding security interests in the Collateral
other than to Lender.


                                       36

<PAGE>   37

KYZEN CORPORATION
PART III (CONTINUED)

         e.       During the term of this Agreement and as long as any of the
Obligations remain outstanding, Pledgor will not grant a security interest in
the Collateral to any other person and will otherwise keep the Collateral free
from any and all claims or encumbrances.

         4.       Income and Profits. Pledgor agrees that all income, earnings
and profits with respect to the Collateral shall be reported for local, state
and federal income tax purposes as attributable to Pledgor and not Lender.
Pledgor hereby instructs and authorizes any person authorized to report income
distributions, to issue IRS Form 1099 indicating Pledgor as the recipient of
such income, earnings and profits.

         5.       Delivery of Certificates; Appointment as Attorney in Fact.
Pledgor has or hereafter shall deliver to __________________, as agent for
Lender, the Collateral pledged hereby, and for all other property required to be
hereafter pledged to Lender, promptly, after Pledgor becomes the owner of such
in every instance accompanied by a power of attorney, or assignment sufficient
to transfer thereto, with signatures guaranteed or otherwise evidenced to
Lender's satisfaction. Without limiting the foregoing, Pledgor hereby
irrevocably constitutes and appoints Lender and __________________, as agent for
Lender, with full power of substitution, as Pledgor's true and lawful Attorney
in Fact, with full irrevocable power and authority in the place and stead of
Pledgor and in the name of Pledgor or in Pledgor's own name, from time to time,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
Lender deems necessary to accomplish the purpose of this Agreement, which power
of attorney is coupled with an interest and shall be irrevocable. Without
limiting the generality of the foregoing, Lender or __________________, as agent
for Lender, shall have the right and power following a default under any of the
Obligations to receive, endorse, and collect all checks and other orders for the
payment of money made payable to Pledgor representing any interest payment,
dividend, or other distribution payable or distributable in respect of the
Collateral, or any part thereof, and to give full discharge for the same. Upon
such a default, Lender, in its discretion, may direct Pledgor or Pledgor's
agent, to transfer the Collateral in certificated or uncertificated form, into
the name and account of Lender or its designee.

         6.       Rights of Pledgor Prior to Default. Unless and until a default
under any one or more of the Obligations shall have occurred, but not
thereafter, (i) Pledgor shall have the right, from time to time, to vote and
give consents with respect to any shares of stock included in the Collateral
with the same force and effect as if such shares of stock were not included in
the Collateral, and (ii) Pledgor shall be entitled to receive and retain cash
dividends or interest as may be paid on or in respect of the property included
in the Collateral. However, if any default under the Obligations shall have
occurred, then, during the continuance thereof, Lender, in addition to the other
remedies provided, may collect and receive all such dividends and interest and,
in its discretion, may vote or cause its nominee to vote the shares of any stock
included in the Collateral.

         7.       Rights of Lender to Other Distributions. All dividends and
interest (other than cash dividends and interest which Pledgor is permitted to
receive by the terms of the immediately preceding Section 6) and other
distributions upon or with respect to the Collateral (including distributions
with respect to the dissolution, liquidation, redemption, stock dividends,
split-ups or other recapitalizations, rearrangements, mergers or consolidations
of the capital structure of a corporation or its subsidiaries) shall be received
by Lender or __________________, as agent for Lender, and held as security for
the Obligations.

         8.       Rights of Lender on Default. In the event that any one or more
of the Obligations shall become payable, whether at maturity or by acceleration,
declaration or otherwise as a result of a default on the Note, and the full
amount of such Obligations shall not have been paid in full, Lender may deal
with any and all of the Collateral as it deems fit, transfer into Lender's name
(or the name of its nominees), all or any part of the Collateral and/or may
liquidate all or any portion of the Collateral, applying the proceeds of such
liquidation to the Obligations, in such order of priority as Lender shall
determine in its sole discretion, and may forthwith apply any cash constituting
a part of the Collateral to the payment of the Obligations, and may collect or
otherwise realize upon any of the Collateral, or any part thereof. Without
limiting the generality of the foregoing, Lender, in making such realization
may, on one (1) calendar day prior written notice to Pledgor, sell, assign or
otherwise dispose of, or give options to purchase, the Collateral through any
stock exchange, broker's board or elsewhere, for cash or credit, or for future
delivery, without assumption by Lender of any credit risk, with the right of
Lender upon any such sale or sales, public or private, to purchase the whole or
any part of the Collateral free from any right or equity of redemption in
Pledgor or anyone claiming through or under Pledgor, which right or equity of
redemption is hereby expressly


                                       37

<PAGE>   38

KYZEN CORPORATION
PART III (CONTINUED)

waived and released, and to apply the net proceeds of such realization, after
deducting all costs and expenses of every kind, to the payment of the
Obligations in such order of priority as Lender shall determine in its sole
discretion. Any surplus shall be returned to Pledgor. Pledgor waives, to the
full extent permitted by law, all rights of appraisement or valuation, whether
before or after sale. Without limiting the foregoing, Lender shall also have, in
addition to any other rights and remedies contained in this Agreement and any
other agreements, guarantees, notes, instruments and documents heretofore, now
or at any time or times hereafter executed by Pledgor and/or Obligor and/or
guarantors, and delivered to Lender, all of the rights and remedies of a secured
party, under law, including without limitation all of the rights and remedies of
a secured party under the Uniform Commercial Code in force in Tennessee, all of
which rights and remedies shall be cumulative, and non-exclusive, to the extent
permitted by law.

         9.       Discharge of Pledge. If the whole amount of the principal of
and interest on, the Obligations or any modification, renewal or extension
thereof shall have been paid in full and discharged then, and in that event, all
rights and interest assigned and pledged hereby or pursuant hereto by Pledgor
shall revert to Pledgor and cease, terminate and be void and the Collateral
belonging to Pledgor shall forthwith be transferred and delivered to Pledgor.

         10.      Right of Exoneration. Pledgor hereby waives, releases and
discharges any right of exoneration with respect to the Obligations and also any
right at law, in equity or by statute to require Lender to pursue or otherwise
avail itself of any rights or remedies which Lender has or may have against any
Obligor or any other person with respect to payment of the Obligations, or to
pursue or exhaust any of Lender's rights or remedies with respect to any other
security at any time held by Lender for the payment of the Obligations.

         11.      Pledgor's Rights of Reimbursement or Subrogation. Pledgor
shall have no right of reimbursement or subrogation with respect to the
Obligations unless and until Lender shall have received payment in full of all
principal and interest on the Obligations. Pledgor hereby waives and releases
any equity or right of marshaling.

         12.      Notices. All notices hereunder shall be deemed to have been
sufficiently given or served, for all purposes hereof, when delivered personally
or when mailed by certified or registered mail, postage prepaid, return receipt
requested, to the last known address of said party. When personally delivered
any notice shall be deemed given when actually received. Any mailed notice shall
be deemed given when mailed. Any notice given pursuant to this Section 12 shall
be deemed reasonable and shall be effective regardless of whether actually
received.

         13.      Indemnity and Expenses. Pledgor agrees to indemnify Lender
from any and all claims, losses and liabilities growing out of or resulting from
this Agreement, and Pledgor will, upon demand, pay or reimburse Lender, as the
case may be, the amount of any and all expenses, including attorneys' fees and
disbursements, experts and agents, which Lender may incur in connection with the
administration of this Agreement; the custody, preservation, or the sale of,
collections from, or other realization upon, the Collateral; the exercise or
enforcement of any of the rights of Lender hereunder; or the failure by Pledgor
to perform or observe any of the provisions hereof.

         14.      Persons Bound. The term "Pledgor" herein shall be deemed to
include all signers, and all agreements, representations, covenants and
obligations hereof shall be joint and several of and for all such signers. This
Pledge Agreement shall be binding upon Pledgor, Pledgor's successors and assigns
and shall inure to the benefit of and be enforceable by Lender, its successors
and assigns.

         15.      General Provisions.

         a.       Each reference herein to Lender shall be deemed to include its
                  successors and assigns, and each reference to the Obligor and
                  Pledgor and any pronouns referring thereto as used herein
                  shall be construed in the masculine, feminine or neuter,
                  singular or plural, as the context may require, and shall be
                  deemed to include their respective heirs, administrators,
                  legal representatives, successors and assigns, all of whom
                  shall be bound by the provisions hereof.


                                       38

<PAGE>   39

KYZEN CORPORATION
PART III (CONTINUED)

         b.       No delay on the part of Lender in exercising any rights
hereunder or failure to exercise the same shall operate as a waiver of such
rights; no notice to or demand on the Obligor or Pledgor shall be deemed to be a
waiver of any obligations of the Obligor or Pledgor or of the right of Lender to
take other or further action without notice or demand as provided herein. In any
event, no modification or waiver of the provision hereof shall be effective
unless in writing and signed by Lender nor shall any waiver be applicable except
in the specific instance or matter for which given.

         c.       The headings contained in this Agreement have been inserted
for convenience or reference only and are not to be used to interpret this
Agreement.

         d.       This Agreement is and shall be deemed to be a contract entered
into and made pursuant to the laws of Tennessee and shall in all respects be
governed, construed, applied and enforced in accordance with the laws of said
state.

         e.       Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
Should any portion of this Agreement be declared invalid for any reason in any
jurisdiction, such declaration shall have no effect upon the remaining portions
of this Agreement.

         IN WITNESS WHEREOF, this Stock Pledge and Security Agreement has been
executed on ___________, 2000.


                                    PLEDGOR:



                                    /s/ Christopher B. Cannon
                                    --------------------------------------------


Agreed to and Accepted

KYZEN CORPORATION



By:      /s/ Kyle J. Doyel
         ------------------------
Title:   President


                                       39


<PAGE>   40
KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)


                                 PROMISSORY NOTE

$100,000                                                      November 1, 2000
                                                          Nashville, Tennessee


     FOR VALUE RECEIVED, Christopher B. Cannon, an individual (hereinafter
     referred to as "Maker") promises to pay to the order of Kyzen Corporation,
     a Tennessee corporation (hereinafter, together with any other holder
     hereof, referred to as "Holder"), at 430 Harding Industrial Drive,
     Nashville, Tennessee 37211 or such other address as Holder may designate in
     writing, the principal amount of ONE HUNDRED THOUSAND AND 00/100 DOLLARS
     ($100,000.00), together with interest on the outstanding principal balance
     from the date hereof at an interest rate per annum equal to the prime rate
     as such is published in the Money Rates Section of the Southeastern edition
     of The Wall Street Journal on the date hereof plus one percent (1%);
     provided that in no event shall the rate of interest payable in respect of
     the indebtedness evidenced hereby exceed the maximum rate of interest then
     allowable under the laws of the State of Tennessee. Principal and interest
     shall be due and payable in full ninety (90) days from the date hereof in
     an amount sufficient to pay in full all principal and interest then
     outstanding. Both principal, and any interest due thereon, shall be payable
     in lawful money of the United States of America, which shall be legal
     tender in payment of all debts and dues, public and private, at the time of
     payment.

     MAKER AND HOLDER, BY ACCEPTING THIS NOTE, EACH AGREE AND STIPULATE THAT THE
     ONLY CHARGE IMPOSED UPON THE MAKER FOR THE USE OF MONEY IN CONNECTION WITH
     THIS NOTE IS AND SHALL BE THE INTEREST DESCRIBED IN THE FIRST PARAGRAPH
     HEREOF, AND FURTHER AGREE AND STIPULATE THAT ALL OTHER CHARGES IMPOSED BY
     THE HOLDER ON THE MAKER IN CONNECTION WITH THIS NOTE, INCLUDING WITHOUT
     LIMITATION, ALL DEFAULT CHARGES AND ATTORNEYS' FEES, ARE CHARGES MADE TO
     COMPENSATE THE HOLDER FOR COSTS OR LOSSES PERFORMED OR INCURRED, AND TO BE
     PERFORMED OR INCURRED, BY THE HOLDER IN CONNECTION WITH THIS NOTE AND SHALL
     UNDER NO CIRCUMSTANCES BE DEEMED TO BE CHARGES FOR THE USE OF MONEY.

     Maker, at its option, may prepay the indebtedness evidenced by this Note,
     either in whole or part, at any time without penalty. All accrued interest
     on the amount so prepaid shall be due and payable with such prepayment. All
     prepayments of principal shall be applied to the payments due under this
     Note in reverse order of maturity.

     An "Event of Default" under this Note shall occur upon: (1) failure of the
     Maker to pay any principal, interest or other amount due hereunder when
     due, (2) Maker's (a) commencing a voluntary case under the Bankruptcy Code
     of 1978, as amended or other federal bankruptcy law (as now or hereafter in
     effect) (collectively, the "Bankruptcy Laws"); (b) filing a petition
     seeking to take advantage of any other laws, domestic or foreign, relating
     to bankruptcy, insolvency, reorganization, winding up or composition for
     adjustments of debts; (c) consenting to or failing to contest in a timely
     and appropriate manner any petition filed against it in an involuntary case
     under such bankruptcy laws or other laws; (d) applying for or consenting
     to, or failing to contest in a timely and appropriate manner, the
     appointment of, or taking of possession by, a receiver, custodian, trustee,
     or liquidator of itself or of a substantial part of its property, domestic
     or foreign; or (e) making a general assignment for the benefit of
     creditors; (3) the commencement of a case or other proceeding against the
     Maker in any court of competent jurisdiction seeking (a) relief under the
     Bankruptcy Laws or under any other laws, domestic or foreign, relating to
     bankruptcy, insolvency, reorganization, winding up or adjustment of debts
     or (b) the appointment of a trustee, receiver, custodian, liquidator or the
     like for the Maker or all or any substantial part of the assets, domestic
     or foreign, of the Maker.

     Upon the occurrence of an Event of Default, any and all obligations of the
     Maker hereunder, at the option of the Holder and without demand or notice
     of any kind, may be immediately declared, and thereupon shall immediately
     become due and payable and the Holder may exercise any and all rights and
     remedies available to it at law, in equity or otherwise.

     Maker shall pay all expenses of the Holder in the collection of this Note
     after the occurrence of an Event of Default, including reasonable
     attorneys' fees.


                                       40
<PAGE>   41

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)


     Time is of the essence of this Note.

     No delay or failure on the part of the Holder in the exercise of any right
     or remedy shall operate as a waiver thereof, and no single or partial
     exercise by the Holder of any right or remedy shall preclude other or
     further exercise thereof or the exercise of any other right or remedy.

     All amendments to this Note, and any waiver or consent by the Holder, must
     be in writing and signed by the Holder and the Maker.

     Maker and any endorser hereof hereby severally waive presentment, demand,
     notice of dishonor, protests and all other notices whatever, and agree that
     Holder or his transferee may, without releasing the liability of Maker,
     grant extensions or renewals of this Note, in whole or in part, without
     limit as to the number of such extensions, or the period or periods
     thereof, and without notice to them and without affecting their liability
     thereon..

     This Note is secured by that certain Stock Pledge and Security Agreement of
     even date herewith in favor of Holder (the "Stock Pledge Agreement") and
     may now or hereafter be secured by other pledges, assignments, security
     agreements, or other instruments of pledge. Neither this reference to the
     Stock Pledge Agreement nor any provisions thereof shall affect or impair
     the absolute and unconditional obligation of the Borrower to pay the
     interest and unpaid principal amount of this Note when due hereunder.

     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
     OF THE STATE OF TENNESSEE.

     This Note shall be binding upon, and inure to the benefit of, the
     successors and assignees of the Maker and the Holder, provided, however,
     that the Maker may not assign its obligations hereunder without the prior
     written consent of the Holder.

     IN WITNESS WHEREOF, the undersigned has executed and delivered this
     Promissory Note as of the date and year first written above.


                                              CHRISTOPHER B. CANNON


                                              /s/ Christopher B. Cannon
                                              -------------------------


                                       41
<PAGE>   42

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)


                             IRREVOCABLE STOCK POWER


     FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer
to Kyzen Corporation (the "Company"), 350,000 shares of the Common Stock of the
Company, represented by Certificates No. KZ 0469, standing in the name of the
undersigned on the books of the Company. The undersigned does hereby irrevocably
constitute and appoint ____________________________________attorney to transfer
said stock on the books of said Company, with full power of substitution in the
premises.

     This Irrevocable Stock Power is executed in connection with that certain
Stock Pledge Agreement dated as of November 1, 2000, by the Company, and the
undersigned.


Dated December 10, 2000.



                                         /s/ Christopher B. Cannon
                                         --------------------------------------


SIGNATURE GUARANTEED BY:                       STAMP
                                               SIGNATURE GUARANTEED
                                               MEDALLION GUARANTEED
                                               ZIONS INVESTMENT SECURITIES, INC.
                                               /S/ DAN PALMER
                                                        AUTHORIZED SIGNATURE
By:      Dan Palmer
   --------------------------------------------

Title:   Financial Consultant
      -----------------------------------------


(NOTE: THE SIGNATURE MUST BE GUARANTEED BY A
COMMERCIAL BANK, TRUST COMPANY OR BROKER WHICH
IS A MEMBER FIRM OF THE NEW YORK, AMERICAN,
MIDWEST OR PACIFIC COAST STOCK EXCHANGE.)


                                       42
<PAGE>   43

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)


                                 PROMISSORY NOTE

<TABLE>
----------------------------------------------------------------------------------------------
<S>           <C>           <C>         <C>        <C>           <C>       <C>        <C>
 PRINCIPAL     LOAN DATE     MATURITY   LOAN NO.  CALL  / COLL  ACCOUNT    OFFICER   INITIALS
$200,000.00    10-31-2000   04-30-2001  70297-01     304                     DRT
----------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing ***** has been omitted due to text length limitations.
----------------------------------------------------------------------------------------------

BORROWER: KYZEN CORPORATION (TIN: 87-0475115)    LENDER: The Bank of Nashville
          430 HARDING INDUSTRIAL DRIVE                     401 Church Street
          NASHVILLE, TN   37211                            Nashville, TN 37219

==============================================================================================
Principal Amount: $200,000.00    Interest Rate: 7.950%         Date of Note: October 31, 2000
</TABLE>

PROMISE TO PAY. KYZEN CORPORATION ("Borrower") promises to pay to The Bank of
Nashville ("Lender"), or order, in lawful money of the United States of America,
the principal amount of Two Hundred Thousand & 00/100 Dollars ($200,000.00) or
so much as may be outstanding, together with interest at the rate of 7.950% per
annum on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on April 30, 2001. In addition, Borrower will
pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning November 30, 2000, with all subsequent interest payments
to be due on the same day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding. Borrower will
pay Lender at Lender's address shown above or at such other place as Lender may
designate in writing.

PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of
this Note, Borrower understands that Lender is entitled to a minimum interest
charge of $7.50. Other than Borrower's obligation to pay any minimum interest
charge, Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued unpaid interest. Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked "paid in full,"
"without recourse," or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes "payment in full"
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to: The
Bank of Nashville, 401 Church Street, Nashville, TN 37219.

LATE CHARGE. If a payment is 15 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, at Lender's option, and if permitted by applicable law, Lender may add
any unpaid accrued interest to principal and such sum will bear interest
therefrom until paid at the rate provided in this Note (including any increased
rate). Upon default, Lender, at its option, may, if permitted under applicable
law, increase the interest rate on this Note to 24.000% per annum. In no event
will the effective total interest rate on this Note be greater than the rate
permitted by applicable law.

DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:

     PAYMENT DEFAULT. Borrower fails to make any payment when due under this
     Note.

     OTHER DEFAULTS. Borrower fails to comply with or to perform any other term,
     obligation, covenant or condition contained in this Note or in any of the
     related documents or to comply with or to perform any term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Borrower.


                                       43
<PAGE>   44

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)



     DEFAULT IN FAVOR OF THIRD PARTIES. Borrower or any Grantor defaults under
     any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Borrower's property or Borrower's ability
     to repay this Note or perform Borrower's obligations under this Note or any
     of the related documents.

     FALSE STATEMENTS. Any warranty, representation or statement made or
     furnished to Lender by Borrower or on Borrower's behalf under this Note or
     the related documents is false or misleading in any material respect,
     either now or at the time made or furnished or becomes false or misleading
     at any time thereafter.

     INSOLVENCY. The dissolution or termination of Borrower's existence as a
     going business, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Borrower.

     CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Borrower or by any
     governmental agency against any collateral securing the loan. This includes
     a garnishment of any of Borrower's accounts, including deposit accounts,
     with Lender. However, this Event of Default shall not apply if there is a
     good faith dispute by Borrower as to the validity or reasonableness of the
     claim which is the basis of the creditor or forfeiture proceeding and if
     Borrower gives Lender written notice of the creditor or forfeiture
     proceeding and deposits with Lender monies or a surety bond for the
     creditor or forfeiture proceeding, in an amount determined by Lender, in
     its sole discretion, as being an adequate reserve or bond for the dispute.

     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
     to any guarantor, endorser, surety or accommodation party of any of the
     indebtedness or any guarantor, endorser, surety or accommodation party dies
     or becomes incompetent, or revokes or disputes the validity of, or
     liability under, any guaranty of the indebtedness evidenced by this Note.

     CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent (25%)
     or more of the common stock of Borrower.

     ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
     condition, or Lender believes the prospect of payment or performance of
     this Note is impaired.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, including
attorneys' fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

JURY WAIVER. LENDER AND BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST
THE OTHER.

GOVERNING LAW. THIS NOTE WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF TENNESSEE. THIS NOTE
HAS BEEN ACCEPTED BY LENDER IN THE STATE OF TENNESSEE.

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of Davidson County, State of Tennessee.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $10.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.



                                       44
<PAGE>   45

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)



RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower may open in
the future. However, this does not include any IRA or Keogh accounts, or any
trust accounts for which setoff would be prohibited by law. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the indebtedness against any and all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note, as well as directions for payment from Borrower's accounts, may be
requested orally or in writing by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing.
Borrower agrees to be liable for all sums either: (A) advanced in accordance
with the instructions of an authorized person or (B) credited to any of
Borrower's accounts with Lender. The unpaid principal balance owing on this Note
at any time may be evidenced by endorsements on this Note or by Lender's
internal records, including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (A) Borrower or any guarantor is
in default under the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in connection with the
signing of this Note; (B) Borrower or any guarantor ceases doing business or is
insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any other loan with
Lender; or (D) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender.

IMAGED DOCUMENTS. This Note and all documents related to this Note
(collectively, the "Documents") will be scanned into an optical retrieval system
and the original documents may be destroyed. By signing this Note, you agree
that a copy from the optical retrieval system of any of the Documents shall have
the same legal force and effect as an original and can be used in the place of
any original in all circumstances and for all purposes, including but not
limited to negotiation, collection, legal proceedings or authentication.

LOAN FEE. In addition to interest, Borrower agrees to pay a $50.00 loan fee
which is not included in the principal amount above.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

KYZEN CORPORATION



By:
   -----------------------------------------------
         KYLE DOYLE, CEO of KYZEN CORPORATION



                                       45
<PAGE>   46

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)



                               COLLATERAL RECEIPT

<TABLE>
----------------------------------------------------------------------------------------------
<S>           <C>           <C>          <C>        <C>           <C>       <C>       <C>
 PRINCIPAL    LOAN DATE     MATURITY     LOAN NO.   CALL / COLL   ACCOUNT   OFFICER   INITIALS
$200,000.00   10-31-2000    04-30-2001   70297-01       304                   DRT
----------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing ***** has been omitted due to text length limitations.
----------------------------------------------------------------------------------------------

BORROWER:  KYZEN CORPORATION (TIN: 87-0475115)   LENDER: The Bank of Nashville
           430 HARDING INDUSTRIAL DRIVE                     401 Church Street
           NASHVILLE, TN   37211                            Nashville, TN 37219
==============================================================================================
</TABLE>


<TABLE>
<CAPTION>
DESCRIPTION OF COLLATERAL                CUSTODY CONTROL       DATE RELEASED
                                            SIGNATURES
-------------------------------------------------------------------------------
<S>                                      <C>                   <C>

CD Account Number 30069310-17251
with Lender  with an approximate
balance of $200,000.00 in an
approximate amount of $200,000.00
-------------------------------------------------------------------------------
</TABLE>


<TABLE>

-------------------------------------------        -------------------------------------   ----------------------------
<S>                                                <C>                                     <C>
Initial Delivery Acknowledgments:                    Return Receipt Acknowledgment:         Instructions for Returning
                                                                                            Collateral and Disposition
Grantor:                                             Grantor acknowledges the receipt       of Coupons:
        -----------------------------------          of all collateral, including all       ---------------------------
             (Grantor's Signature)                   unmatured coupons, if any.
                                                                                            ---------------------------

The Bank of Nashville                                                                       ---------------------------
By:                                                  X
   ----------------------------------------           ----------------------------------    ---------------------------
              (Authorized Officer)                           (Grantor's Signature)
-------------------------------------------        -------------------------------------    ---------------------------


=======================================================================================================================
</TABLE>



                                       46
<PAGE>   47

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)




                          ASSIGNMENT OF DEPOSIT ACCOUNT
<TABLE>
------------------------------------------------------------------------------------------------
<S>           <C>            <C>         <C>        <C>           <C>       <C>        <C>
 PRINCIPAL    LOAN DATE      MATURITY    LOAN NO.   CALL / COLL   ACCOUNT   OFFICER    INITIALS
$200,000.00   10-31-2000     04-30-2001  70297-01       304                    DRT
------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing ***** has been omitted due to text length limitations.
------------------------------------------------------------------------------------------------

BORROWER: KYZEN CORPORATION (TIN: 87-0475115)    LENDER:  The Bank of Nashville
          430 HARDING INDUSTRIAL DRIVE                      401 Church Street
          NASHVILLE, TN   37211                             Nashville, TN 37219

================================================================================================
</TABLE>

THIS ASSIGNMENT OF DEPOSIT ACCOUNT DATED OCTOBER 31, 2000, IS MADE AND EXECUTED
BETWEEN KYZEN CORPORATION ("GRANTOR") AND THE BANK OF NASHVILLE ("LENDER").

ASSIGNMENT. For valuable consideration, Grantor assigns and grants to Lender a
security interest in the Collateral, including without limitation the deposit
accounts described below, to secure the Indebtedness and agrees that Lender
shall have the rights stated in this Agreement with respect to the Collateral,
in addition to all other rights which Lender may have by law.

COLLATERAL. The word "Collateral" means the following described deposit account
("Account"):

     CD ACCOUNT NUMBER 30069310-17251 WITH LENDER WITH AN APPROXIMATE BALANCE OF
     $200,000.00

together with (A) all interest, whether now accrued or hereafter accruing; (B)
all additional deposits hereafter made to the Account; (C) any and all proceeds
from the Account; and (D) all renewals, replacements and substitutions for any
of the foregoing.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Grantor may open in
the future. However, this does not include any IRA or Keogh accounts, or any
trust accounts for which setoff would be prohibited by law. Grantor authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the Indebtedness against any and all such accounts.

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With
respect to the Collateral, Grantor represents and promises to Lender that:

     OWNERSHIP. Grantor is the lawful owner of the Collateral free and clear of
     all loans, liens, encumbrances, and claims except as disclosed to and
     accepted by Lender in writing.

     RIGHT TO GRANT SECURITY INTEREST. Grantor has the full right, power, and
     authority to enter into this Agreement and to assign the Collateral to
     Lender.

     NO PRIOR ASSIGNMENT. Grantor has not previously granted a security interest
     in the Collateral to any other creditor.

     NO DEFAULTS. There are no defaults relating to the Collateral, and there
     are no offsets or counterclaims to the same. Grantor will strictly and
     promptly do everything required of Grantor under the terms, conditions,
     promises, and agreements contained in or relating to the Collateral.

     PROCEEDS. Any and all replacement or renewal certificates, instruments or
     other benefits or proceeds related to the Collateral that are received by
     Grantor shall be held by Grantor in trust for Lender and immediately shall
     be delivered by Grantor to Lender to be held as part of the Collateral.


                                       47
<PAGE>   48

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)




     VALIDITY; BINDING EFFECT. This Agreement is binding upon Grantor and
     Grantor's successors and assigns and is legally enforceable in accordance
     with its terms.

LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL. While this
Agreement is in effect, Lender may retain the rights to possession of the
Collateral, together with any and all evidence of the Collateral, such as
certificates or passbooks. This Agreement will remain in effect until (a) there
no longer is any Indebtedness owing to Lender; (b) all other obligations secured
by this Agreement have been fulfilled; and (c) Grantor, in writing, has
requested from Lender a release of this Agreement.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.

LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care
in the physical preservation and custody of any certificate or passbook for the
Collateral but shall have no other obligation to protect the Collateral or its
value. In particular, but without limitation, Lender shall have no
responsibility (A) for the collection or protection of any income on the
Collateral; (B) for the preservation of rights against issuers of the Collateral
or against third persons; (C) for ascertaining any maturities, conversions,
exchanges, offers, tenders, or similar matters relating to the Collateral; nor
(D) for informing the Grantor about any of the above, whether or not Lender has
or is deemed to have knowledge of such matters.

DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:

     PAYMENT DEFAULT. Grantor fails to make any payment when due under the
     Indebtedness.

     OTHER DEFAULTS. Grantor fails to comply with or to perform any other term,
     obligation, covenant or condition contained in this Agreement or in any of
     the Related Documents or to comply with or to perform any term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Grantor.

     DEFAULT IN FAVOR OF THIRD PARTIES. Should Grantor or any Grantor default
     under any loan, extension of credit, security agreement, purchase or sales
     agreement, or any other agreement, in favor of any other creditor or person
     that may materially affect any of Grantor's property or Grantor's or any
     Grantor's ability to repay the Indebtedness or perform their respective
     obligations under this Agreement or any of the Related Documents.

     FALSE STATEMENTS. Any warranty, representation or statement made or
     furnished to Lender by Grantor or on Grantor's behalf under this Agreement,
     the Note, or the Related Documents is false or misleading in any material
     respect, either now or at the time made or furnished or becomes false or
     misleading at any time thereafter.

     DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
     ceases to be in full force and effect (including failure of any collateral
     document to create a valid and perfected security interest or lien) at any
     time and for any reason.

     INSOLVENCY. The dissolution or termination of Grantor's existence as a
     going business, the insolvency of Grantor, the appointment of a receiver
     for any part of Grantor's property, any assignment for the benefit of
     creditors, any type of


                                       48
<PAGE>   49


KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)


     creditor workout, or the commencement of any proceeding under any
     bankruptcy or insolvency laws by or against Grantor.

     CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Grantor or by any
     governmental agency against any collateral securing the Indebtedness. This
     includes a garnishment of any of Grantor's accounts, including deposit
     accounts, with Lender. However, this Event of Default shall not apply if
     there is a good faith dispute by Grantor as to the validity or
     reasonableness of the claim which is the basis of the creditor or
     forfeiture proceeding and if Grantor gives Lender written notice of the
     creditor or forfeiture proceeding and deposits with Lender monies or a
     surety bond for the creditor or forfeiture proceeding, in an amount
     determined by Lender, in its sole discretion, as being an adequate reserve
     or bond for the dispute.

     EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
     to guarantor, endorser, surety or accommodation party of any of the
     Indebtedness or guarantor, endorser, surety or accommodation party dies or
     becomes incompetent or revokes or disputes the validly of, or liability
     under, any Guaranty of the Indebtedness.

     ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
     condition, or Lender believes the prospect of payment or performance of the
     Indebtedness is impaired.

RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default or at
any time thereafter, Lender may exercise any one or more of the following rights
and remedies, in addition to any rights or remedies that may be available at
law, in equity, or otherwise:

     ACCELERATE INDEBTEDNESS. Lender may declare all indebtedness of Grantor to
     Lender immediately due and payable, without notice of any kind to Grantor.

     APPLICATION OF ACCOUNT PROCEEDS. Lender may take directly all funds in the
     Account and apply them to the Indebtedness. If the Account is subject to an
     early withdrawal penalty, that penalty shall be deducted from the Account
     before its application to the Indebtedness, whether the Account is with
     Lender or some other institution. Any excess funds remaining after
     application of the Account proceeds to the Indebtedness will be paid to
     Grantor as the interests of Grantor may appear. Grantor agrees, to the
     extent permitted by law, to pay any deficiency after application of the
     proceeds of the Account to the Indebtedness. Lender also shall have all the
     rights of a secured party under the Tennessee Uniform Commercial Code, even
     if the Account is not otherwise subject to such Code concerning security
     interests, and the parties to this Agreement agree that the provisions of
     the Code giving rights to a secured party shall nonetheless be a part of
     this Agreement.

     TRANSFER TITLE. Lender may effect transfer of title upon sale of all or
     part of the Collateral. For this purpose, Grantor irrevocably appoints
     Lender as Grantor's attorney-in-fact to execute endorsements, assignments
     and instruments in the name of Grantor and each of them (if more than one)
     as shall be necessary or reasonable.

     OTHER RIGHTS AND REMEDIES. Lender shall have and may exercise any or all of
     the rights and remedies of a secured creditor under the provisions of the
     Tennessee Uniform Commercial Code, at law, in equity or otherwise.

     DEFICIENCY JUDGMENT. If permitted by applicable law, Lender may obtain a
     judgment for any deficiency remaining in the Indebtedness due to Lender
     after application of all amounts received from the exercise of the rights
     provided in this section.

     ELECTION OF REMEDIES. Except as may be prohibited by applicable law, all of
     Lender's rights and remedies, whether evidenced by this Agreement or by any
     other writing, shall be cumulative and may be exercised singularly or
     concurrently. Election by Lender to pursue any remedy shall not exclude
     pursuit of any other remedy, and an election to make expenditures or to
     take action to perform an obligation of Grantor under this Agreement, after
     Grantor's failure to perform, shall not affect Lender's right to declare a
     default and exercise its remedies.

     CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
     by this Agreement or by any other writing, shall be cumulative and may be
     exercised singularly or concurrently. Election by Lender to pursue any
     remedy


                                       49
<PAGE>   50

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)



     shall not exclude pursuit of any other remedy, and an election to make
     expenditures or to take action to perform an obligation of Grantor under
     this Agreement, after Grantor's failure to perform, shall not affect
     Lender's right to declare a default and to exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire understanding and agreement of the parties as to the
     matters set forth in this Agreement. No alteration of or amendment to this
     Agreement shall be effective unless given in writing and signed by the
     party or parties sought to be charged or bound by the alteration or
     amendment.

     ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
     Lender's costs and expenses, including Lender's attorneys' fees and
     Lender's legal expenses, incurred in connection with the enforcement of
     this Agreement. Lender may hire or pay someone else to help enforce this
     Agreement, and Grantor shall pay the costs and expenses of such
     enforcement. Costs and expenses include Lender's attorneys' fees and legal
     expenses whether or not there is a lawsuit, including attorneys' fees and
     legal expenses for bankruptcy proceedings (including efforts to modify or
     vacate any automatic stay or injunction), appeals, and any anticipated
     post-judgment collection services. Grantor also shall pay all court costs
     and such additional fees as may be directed by the court.

     CAPTION HEADING. Caption headings in this Agreement are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Agreement.

     GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED
     IN ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF TENNESSEE. THIS
     AGREEMENT HAS BEEN ACCEPTED BY LENDER IN THE STATE OF TENNESSEE.

     CHOICE OF VENUE. If there is a lawsuit, Grantor agrees upon Lender's
     request to submit to the jurisdiction of the courts of Davidson County,
     State of Tennessee.

     NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights
     under this Agreement unless such waiver is given in writing and signed by
     Lender. No delay or omission on the part of Lender in exercising any right
     shall operate as a waiver of such right or any other right. A waiver by
     Lender of a provision of this Agreement shall not prejudice or constitute a
     waiver of Lender's right otherwise to demand strict compliance with that
     provision or any other provision of this Agreement. No prior waiver by
     Lender, nor any course of dealing between Lender and Grantor, shall
     constitute a waiver of any of Lender's rights or of any of Grantor's
     obligations as to any future transactions. Whenever the consent of Lender
     is required under this Agreement, the granting of such consent by Lender in
     any instance shall not constitute continuing consent to subsequent
     instances where such consent is required and in all cases such consent may
     be granted or withheld in the sole discretion of Lender.

     NOTICES. Any notice required to be given under this Agreement shall be
     given in writing, and shall be effective when actually delivered, when
     actually received by telefacsimile (unless otherwise required by law), when
     deposited with a nationally recognized overnight courier, or, if mailed,
     when deposited in the United States mail, as first class, certified or
     registered mail postage prepaid, directed to the addresses shown near the
     beginning of this Agreement. Any party may change its address for notices
     under this Agreement by giving formal written notice to the other parties,
     specifying that the purpose of the notice is to change the party's address.
     For notice purposes, Grantor agrees to keep Lender informed at all times of
     Grantor's current address. Unless otherwise provided or required by law, if
     there is more than one Grantor, any notice given by Lender to any Grantor
     is deemed to be notice given to all Grantors.

     POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
     attorney-in-fact, irrevocably, with full power of substitution to do the
     following: (1) to demand, collect, receive, receipt for, sue and recover
     all sums of money or other property which may now or hereafter become due,
     owing or payable from the Collateral; (2) to execute, sign and endorse any
     and all claims, instruments, receipts, checks, drafts or warrants issued in
     payment for the Collateral; (3) to settle or compromise any and all claims
     arising under the Collateral, and in the place and stead of Grantor, to
     execute and deliver its release and settlement for the claim; and (4) to
     file any claim or claims or to take any action or institute or take part in
     any proceedings, either in its own name or in the name of Grantor, or
     otherwise, which in the


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<PAGE>   51

KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)



     discretion of Lender may seem to be necessary or advisable. This power is
     given as security for the Indebtedness, and the authority hereby conferred
     is and shall be irrevocable and shall remain in full force and effect until
     renounced by Lender.

     SEVERABILITY. If a court of competent jurisdiction finds any provision of
     this Agreement to be illegal, invalid, or unenforceable as to any
     circumstance, that finding shall not make the offending provision illegal,
     invalid, or unenforceable as to any other circumstance. If feasible, the
     offending provision shall be considered modified so it becomes legal, valid
     and enforceable. If the offending provision cannot be so modified, it shall
     be considered deleted from this Agreement. Unless otherwise required by
     law, the illegality, invalidity, or unenforceability of any provision of
     this Agreement shall not affect the legality, validity or enforceability of
     any other provision of this Agreement.

     SUCCESSOR AND ASSIGNS. Subject to any limitations stated in this Agreement
     on transfer of Grantor's interest, this Agreement shall be binding upon and
     inure to the benefit of the parties, their successors and assigns. If
     ownership of the Collateral becomes vested in a person other than Grantor,
     Lender, without notice to Grantor, may deal with Grantor's successors with
     reference to this Agreement and the Indebtedness by way of forbearance or
     extension without releasing Grantor from the obligations of this Agreement
     or liability under the Indebtedness.

     SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
     warranties, and agreements made by Grantor in this Agreement shall survive
     the execution and delivery of this Agreement, shall be continuing in
     nature, and shall remain in full force and effect until such time as
     Grantor's Indebtedness shall be paid in full.

     TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
     Agreement.

     WAIVE JURY. ALL PARTIES TO THIS AGREEMENT HEREBY WAIVE THE RIGHT TO ANY
     JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY
     AGAINST ANY OTHER PARTY.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:

     ACCOUNT. The work "Account" means the deposit account described in the
     "Collateral Description" section.

     AGREEMENT. The word "Agreement" means this Assignment of Deposit Account,
     as this Assignment of Deposit Account may be amended or modified from time
     to time, together with all exhibits and schedules attached to this
     Assignment of Deposit Account from time to time.

     BORROWER. The word "Borrower" means KYZEN CORPORATION, and all other
     persons and entities signing the Note in whatever capacity.

     COLLATERAL. The word "Collateral" means all of Grantor's right, title and
     interest in and to all the Collateral as described in the Collateral
     Description section of this Agreement.

     DEFAULT. The word "Default" means the Default set forth in this Agreement
     in the section titled "Default."

     EVENT OF DEFAULT. The words "Event of Default" mean any of the events of
     default set forth in this Agreement in the default section of this
     Agreement.

     GRANTOR. The word "Grantor" means KYZEN CORPORATION.

     GUARANTY. The word "Guaranty" means the guaranty from guarantor, endorser,
     surety or accommodation party to Lender, including without limitation a
     guaranty of all or part of the Note.


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<PAGE>   52


KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)


     INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
     the Note or Related Documents, including all principal and interest
     together with all other indebtedness and costs and expenses for which
     Grantor is responsible under this Agreement or under any of the Related
     Documents.

     LENDER. The word "Lender" means The Bank of Nashville, its successors and
     assigns.

     NOTE. The word "Note" means the Note executed by Grantor in the principal
     amount of $200,000.00 dated October 31, 2000, together with all renewals
     of, extensions of, modifications of, refinancings of, consolidations of,
     and substitutions for the note or credit agreement.

     RELATED DOCUMENTS. The words "Related Documents" mean all promissory notes,
     credit agreements, loan agreements, environmental agreements, guaranties,
     security agreements, mortgages, deeds of trust, security deeds, collateral
     mortgages, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

================================================================================

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS ASSIGNMENT OF DEPOSIT
ACCOUNT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED OCTOBER 31, 2000.

GRANTOR:


KYZEN CORPORATION

By:
   -----------------------------------------------
        KYLE DOYLE, CEO of KYZEN CORPORATION

================================================================================



                                       52
<PAGE>   53


KYZEN CORPORATION
--------------------------------------------------------------------------------
PART III (CONTINUED)



                     DISBURSEMENT REQUEST AND AUTHORIZATION
<TABLE>
------------------------------------------------------------------------------------------------
<S>           <C>            <C>         <C>        <C>           <C>       <C>        <C>
 PRINCIPAL    LOAN DATE      MATURITY    LOAN NO.   CALL / COLL   ACCOUNT   OFFICER    INITIALS
$200,000.00   10-31-2000     04-30-2001  70297-01       304                    DRT
------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing ***** has been omitted due to text length limitations.
------------------------------------------------------------------------------------------------

BORROWER: KYZEN CORPORATION (TIN: 87-0475115)    LENDER:  The Bank of Nashville
          430 HARDING INDUSTRIAL DRIVE                      401 Church Street
          NASHVILLE, TN   37211                             Nashville, TN 37219

================================================================================================
</TABLE>


LOAN TYPE: This is a Fixed Rate (7.950%) Nondisclosable Revolving Line of Credit
Loan to a Corporation for $200,000.00 due on April 30, 2001

PRIMARY PURPOSE OF LOAN.  The primary purpose of this loan is for:

         [ ]  Personal, Family, or Household Purposes or Personal Investment.
         [X]  Business (including Real Estate Investment).

SPECIFIC PURPOSE.  The specific purpose of this loan is:  WORKING CAPITAL.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $200,000.00 as follows:

<TABLE>
    <S>                        <C>
    Undisbursed Funds:                            $200,000.00
                                                  ------------
    Note Principal:                               $200,000.00
</TABLE>

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:


    Prepaid Finance Charges Paid in Cash:              $ 0.00

    Other Charges Paid in Cash:
      $50.00 LOAN FEE                                  $50.00
                                                  ------------

    Total Charges Paid in Cash:                        $50.00

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED OCTOBER 31, 2000.



BORROWER:


KYZEN CORPORATION

By:
   -----------------------------------------
        KYLE DOYLE, CEO of KYZEN CORPORATION




                                       53