Document:

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                                                                   Exhibit 10.35

     THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

                           CONVERTIBLE PROMISSORY NOTE

$200,000                                                        October 19, 2001
                                                                Denver, Colorado

     FOR VALUE RECEIVED, Polar Molecular Corporation, a Delaware corporation
(the "Company") hereby promises to pay to the order of Lockhart Holdings, Inc.,
on or before the Maturity Date (as defined in Section 3(a) below), the principal
sum of Two Hundred Thousand Dollars ($200,000), together with interest thereon
as provided herein. The entire unpaid principal sum together with interest
thereon shall be due and payable on the Maturity Date.

     1. Conversion. The holder of this Note (the "Holder") is entitled, at its
option, on the Maturity Date to convert up to fifty percent (50%) of the
outstanding principal amount of this Note into options to purchase fully paid
and nonassessable shares of common stock, $0.0001 par value, of the Company
("Common Stock"), at the initial price (the "Conversion Price") per share of
Common Stock (the "Conversion Rate") equal to the higher of (a) $0.40 per share,
or (b) in the event the Company sells shares of Common Stock in a private
placement investment in excess of $250,000 prior to the date this Note is
converted, the average price per share of those shares sold in such private
placement (i.e., if the Note were converted on the Maturity Date for the maximum
amount allowed to be converted ($100,000), and no shares, or shares with a price
less than $0.40 per share, had been sold in a private placement, the Holder
would receive options to purchase 250,000 shares of Common Stock
($100,000/$0.40)). The Conversion Rate shall be subject to adjustment as
specified in Section 5 hereof. Conversion of this Note shall be effected by
surrender of this Note to the Company at its address specified below (or such
other address as the Company shall have given written notice to the Holder
hereof), together with a request that this Note be converted to options to
purchase Common Stock as specified herein.

     2. Interest. Interest shall be due upon the outstanding principal amount
hereof from the date of this Note through the date of repayment. No interest
shall be due and payable until the Maturity Date. The rate of interest shall be
12% per annum, compounded daily for the period. All interest hereunder, shall be
calculated on the basis of a 360 day year and actual days elapsed.

     3. Maturity Date; Payments.

          (a) The date for repayment of the principal amount and any interest
due hereunder shall be October 19, 2002 (the "Maturity Date"). At the sole
option of the Company, the date for such repayment may be extended until January
19, 2003 (in the event the date for

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repayment is extended, such extended date shall be the "Maturity Date"). The
Company shall give the Holder at least seven calendar days notice of its
election to extend the Maturity Date.

          (b) The Company shall make all payments due under the terms of this
Note to the Holder at 2873 West Hardies Road, Gibsonia, Pennsylvania 15044 or at
such other address as shall be designated to the Company in writing by the
Holder. The Company shall be entitled to prepay the Note in full, or in any
part, at any time. Any prepayment of principal shall be accompanied by the
payment of all interest accrued through the payment date. The Company shall give
at least fifteen calendar days notice of any prepayment hereunder, during which
time the Holder shall be entitled to convert this Note as specified in Section 1
hereof.

     4. Certain Expenses. Whenever the Holder shall sustain or incur any losses
or out-of-pocket expenses with respect to this Note in connection with (a)
repayment of overdue amounts under this Note, or (b) failure by the Company to
pay all principal and interest, if any, of this Note when due hereunder (whether
at maturity, by reason of acceleration, or otherwise), the Company shall pay, on
demand, to the Holder, in addition to any other penalties or premiums hereunder,
an amount sufficient to compensate the Holder for all such losses or
out-of-pocket expenses, including, without limitation, all costs and expenses of
a suit or proceeding (or any appeal thereof) brought for recovery of all or any
part of or for protection of the indebtedness evidenced by this Note or to
enforce the Holder's rights hereunder, including reasonable attorney's fees.

     5. Adjustment to Conversion Price.

          (a) If the Company at any time subdivides or combines its outstanding
shares of the Common Stock into a greater or lesser number of shares of the
Common Stock (including, without limitation, by stock dividend, stock split, or
recapitalization), then the Conversion Price shall be adjusted so that it shall
equal the price determined by multiplying the Conversion Price by a fraction,
the numerator of which shall be the number of shares of the Common Stock
outstanding immediately prior to such action and the denominator of which shall
be the number of shares outstanding immediately after giving effect to such
action.

          (b) In the event of any capital reorganization or reclassification of
the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation, or any sale, lease or other disposition of all
or substantially all of the assets of the Company, that is effected in such a
manner that holders of shares of the Common Stock are entitled to receive
securities and/or property (including cash) with respect to or in exchange for
shares of the Common Stock, the Company shall, as a condition precedent to such
transaction, cause effective provision to be made so that the Holder shall have
the right thereafter to convert this Note for the kind and amount of securities
and/or other property receivable upon such event by a holder of the number of
shares of the Common Stock for which this Note could have been converted
immediately prior to such event, subject to the adjustments which shall be as
nearly equivalent as practicable to the adjustments provided for in this Note.

          (c) If the Company makes any distribution of its assets upon or with
respect to shares of the Common Stock as a liquidating or partial liquidating
dividend, or other than as a

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dividend payable out of legally available funds, the Holder shall upon
conversion of this Note thereafter, receive, in addition to the shares of the
Common Stock so purchased or paid, the amount of such assets (or, at the option
of the Company, a sum equal to the fair value thereof at the time of
distribution as determined by the Board of Directors of the Company in its
reasonable judgment) which would have been distributed to the Holder upon
conversion of this Note immediately prior to the record date for such
distribution.

          (d) Whenever the Conversion Price shall be adjusted as provided in
this Section 5, the Company shall forthwith deliver to Holder, a statement
showing in detail the facts requiring such adjustment and the Conversion Price
that shall be in effect after such adjustment. Where appropriate, such copy may
be given in advance and may be included as part of a notice required to be
mailed under the provisions of Section 5(e).

          (e) If the Company shall propose to take any action of the type
described in this Section 5, the Company shall give notice to the Holder, in the
manner set forth in Section 5(d), which notice shall specify the record date, if
any, with respect to any such action and the approximate date on which such
action is to take place. Such notice shall also set forth such facts with
respect thereto as shall be reasonably necessary to indicate the effect of such
action (to the extent such effect may be known at the date of such notice) on
the Conversion Price and the number, kind or class of shares or other securities
or property which shall be deliverable upon the conversion of this Note. In the
case of any action which would require the fixing of a record date, such notice
shall be given at least 10 days prior to the date so fixed, and in case of all
other action, such notice shall be given at least 15 days prior to the taking of
such proposed action.

     6. Covenants as to Common Stock. The Company covenants and agrees that all
shares of Common Stock to be issued upon the exercise of options obtained upon
conversion of this Note, will, upon issuance, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof. Without limiting the generality of the foregoing, the Company
covenants that it will from time to time take all such actions as may be
requisite to assure that the stated or par value per share of Common Stock is at
all times equal to or less than the lowest Conversion Price per share of Common
Stock issuable upon exercise of options obtained upon conversion of this Note.
The Company further covenants and agrees that the Company will at all times have
authorized and reserved, a sufficient number of shares of its Common Stock to
provide for the exercise of options obtained upon conversion of this Note and
all other similar convertible notes issued by the Company. The Holder
acknowledges that neither this Note, the options to purchase shares of the
Common Stock issuable upon conversion of this Note (the "Conversion Options"),
or the shares of the Common Stock issuable upon exercise of the Conversion
Options (the "Conversion Shares") is registered under the Securities Act of 1933
(the "Securities Act") or any state securities laws. The Conversion Options or
Conversion Shares may be restricted securities, as that term is defined in the
Securities Act, and may be issued with a restrictive legend similar to the
legend on this Note.

     7. Security. This Note will be secured by a lien on and security interest
in certain property of the Company as provided in the Security Agreement dated
as of the date hereof (the "Note Security Agreement"). Such lien and security
interest will not become effective and attach until the lien and security
interest under that certain Security Agreement dated January 30, 2001

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is released. Reference is hereby made to the Note Security Agreement for a
description of the properties and assets in which the lien and security interest
will be granted, the nature and extent of the security, the terms and conditions
upon which the lien and security interest will be granted, and the rights of the
Holder with respect thereto.

     8. Time of Essence. Time is of the essence. At the option of the Holder,
payment of the principal sum and any and all accrued interest thereon may be
accelerated, and such amounts shall be immediately due and payable without
further notice or demand upon the occurrence (and continuance as hereinafter
specified) of any of the following:

          (a) Failure to make any payment of any and all amounts required to be
paid hereunder when due or declared due.

          (b) Default in the performance of any obligation or undertaking of the
Company under this Note.

          (c) Dissolution, termination of existence, insolvency, business
failure, appointment of a receiver of any part of the property of, assignment
for the benefit of creditors by, or commencement of any proceeding under any
bankruptcy or insolvency laws by, or against the Company which remains uncured
or undismissed for sixty (60) days after the occurrence of such event.

     9. Remedies Cumulative. The remedies provided in this Note shall be
cumulative, and shall be in addition to any other rights or remedies now or
hereafter provided by law or equity. No delay, failure or omission by the Holder
or any holder of this Note, in respect of any default by the Company, to
exercise any right of remedy shall constitute a waiver of the right to exercise
the right or remedy upon any such default or subsequent default.

     10. Waiver. The Company and any endorser hereof hereby waives presentment,
demand, notice of dishonor, notice of acceleration and protest and assents to
any extension of time with respect to any payment due under this Note, to any
substitution or release of collateral and to the addition or release of any
party. No waiver of any payment or other right under this Note shall operate as
a waiver of any other payment or right.

     11. Miscellaneous.

          (a) This Note or any provision hereof may be waived, changed,
modified, or discharged only by an agreement in writing, signed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought.

          (b) If any of the provisions of this Note shall be held to be invalid
or unenforceable, the determination of invalidity or unenforceability of any
such provision shall not affect the validity or enforceability of any other
provision or provisions hereof.

          (c) This Note shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of and be enforceable by the Holder and
its successors and assigns.

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          (d) All notices to the Company expressly required in this Note shall
be in writing and shall be delivered by hand delivery or mailed by certified
mail, return receipt requested, postage prepaid, addressed to the Company at its
address set forth below its signature hereto, or at such other address as the
Company shall notify the holder hereof. All such notices or other communications
shall be deemed properly given upon receipt of delivery by the Company.

          (e) At the option of the holder hereof, an action may be brought to
enforce this Note in a court of competent jurisdiction in the State of Colorado,
City and County of Denver. The Company and all signers or endorsers hereof
consent to such venue and jurisdiction.

          (f) This Note shall be construed and, enforced in accordance with the
laws of the State of Colorado.

                            [SIGNATURE PAGE FOLLOWS]

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     The Company has caused this Note to be executed as of the date set forth
above.

                                   POLAR MOLECULAR CORPORATION,
                                     a Delaware corporation

                                   By: /s/ Mark L. Nelson
                                       -----------------------------------------
                                           Mark L. Nelson
                                           President and Chief Executive Officer

                                       Address: 4600 S. Ulster Street
                                                Suite 700
                                                Denver, Colorado 80237

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                            LOAN EXTENSION AGREEMENT

     This Loan Extension Agreement (this "Agreement") is entered into by and
between Polar Molecular Corporation, a Delaware corporation (the "Company"), and
Lockhart Holdings, Inc. (the "Holder") as of January 17, 2003.

                                    RECITALS

A.   The Company issued to the Holder a Promissory Note (the "Note") in the
     principal amount of $200,000 dated as of October 19, 2001;

B.   The Holder and the Company desire to extend the due date of the Note and
     amend the terms for repayment of the Note.

                                    AGREEMENT

     In consideration of the foregoing and the mutual promises contained herein,
the Holder and the Company hereby agree as follows:

1. Section 1 of the Note is hereby amended by inserting in the second line
thereof, after the words "Maturity Date," the following:

          "to notify the Company"

2. Section 2 of the Note is hereby amended to read in its entirety as follows:

          "2. Interest. Interest shall be due upon the outstanding principal
          amount hereof from the date of this Note through the Maturity Date. In
          the event that the Holder exercises its conversion right on the
          Maturity Date, interest shall continue to accrue against only the
          outstanding principal amount hereunder, as adjusted downward for (i)
          amounts converted pursuant to Section 1 hereof, and (ii) principal
          payments made pursuant to Section 3 hereof. No interest shall be due
          and payable until the date of final repayment pursuant to the terms of
          Section 3 hereof. The rate of interest shall be 12% per annum,
          compounding daily for the period. All interest hereunder shall be
          calculated on the basis of a 360 day year and actual days elapsed."

3.   Subsection (a) of Section 3 of the Note is hereby amended to read in its
     entirety as follows:

          "(a) The date for repayment of the principal amount and any interest
          due hereunder shall be July 19, 2003 (the "Maturity Date"). Following
          the Maturity Date, the Company shall be obligated to repay all
          outstanding principal and interest accrued under the Note in quarterly
          installments of at least $25,000, until such time as all outstanding
          amounts of principal and interest are paid in full."

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4.   Consideration. As consideration for entering into this Agreement, the
     Company shall issue the Holder 50,000 shares of the Company's common stock
     to be delivered promptly within 10 business days of final execution of this
     Agreement.

5.   Effect of this Agreement.

     (a)  The Holder hereby agrees that as of the date of this Agreement the
          Company shall not be in default under the Note or under any other
          related agreement including, without limitation, the Security
          Agreement (the "Security Agreement") between the Company and the
          Holder dated as of October 24, 2001. The Holder hereby waives any
          remedies it may have had under the Note or the Security Agreement
          prior to the date of this Agreement as a result of the Company's
          failure to pay the Note in full on or before the original due date of
          January 19, 2003 (although the Holder retains any remedies relating to
          any future defaults).

     (b)  The Company hereby agrees that failure to repay the Note in accordance
          with this Agreement and the repayment terms set forth herein or
          failure to perform or comply in any material respect with any of the
          obligations set forth in this Agreement shall constitute an Event of
          Default (as that term is defined in the Note) under the Note and the
          Security Agreement. Notwithstanding anything herein, upon the
          occurrence of such an Event of Default hereunder, the Holder shall be
          entitled to all rights and remedies provided for by the terms of the
          Note and the Security Agreement.

     (c)  Other than those terms specifically addressed by this Agreement, the
          terms of the Note shall not be altered or amended by this Agreement.
          In the event of a conflict between the terms of the Note and this
          Agreement, the terms of this Agreement shall control and be binding on
          the Holder and the Company.

6.   Miscellaneous

     (a)  This Agreement shall be binding on the Company and its successors, and
          shall inure to the benefit of the Holder, its successors and assigns.
          Any reference to the Holder shall include any holder in due course of
          the Note.

     (b)  This Agreement, the Note and the Security Agreement together
          constitute the entire agreement between the Holder and the Company
          with respect to the subject matter hereof and supersedes all prior
          oral or written agreements and understandings, if any, relating to the
          subject matter hereof.

     (c)  Each provision of this Agreement shall be considered separate. If for
          any reason any provision or provisions hereof are determined to be
          invalid or contrary to applicable law, such invalidity shall not
          impair the operation of or affect the remaining portions of this
          Agreement.

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     (d)  This Agreement may be executed in one or more counterparts, each of
          which shall be deemed an original, but all of which shall together
          constitute one and the same instrument.

     The undersigned have executed this Agreement to be effective as of the date
first set forth herein.

COMPANY:

POLAR MOLECULAR CORPORATION

By: /s/ Mark L. Nelson
    -----------------------------------
        Mark L. Nelson, President and
        Chief Executive Officer

HOLDER:

LOCKHART HOLDINGS, INC.

By: /s/ Thomas J. Gillespie
    -----------------------------------
        Thomas J. Gillespie, Jr., President

                                       3<PAGE>

                                                                   Exhibit 10.36

                               SECURITY AGREEMENT

     This SECURITY AGREEMENT (the "Security Agreement") dated as of October 24,
2001, by and between Polar Molecular Corporation, a Delaware corporation (the
"Borrower") and Lockhart Holdings, Inc., a Delaware corporation (the "Lender").

                                    RECITALS

     WHEREAS, the Borrower has requested, and the Lender has agreed to make a
loan to the Borrower on the terms and conditions set forth in a Purchase
Agreement of even date herewith by and between the Borrower and the Lender (the
"Purchase Agreement") and the Convertible Promissory Note of even date herewith
(the "Note"); and

     WHEREAS, the Borrower is prohibited from granting any liens or security
interests in the Collateral (as such term is defined below) until the release of
the lien and security interest granted by the Borrower to certain parties
pursuant to the terms of that certain Security Agreement dated January 30, 2001
(the "Existing Security Agreement"); and

     WHEREAS, the Borrower has agreed in the Purchase Agreement and the Note to
grant the security interest in the Collateral contemplated by this Security
Agreement to be effective upon the release of the existing lien and security
interest granted pursuant to the Existing Security Agreement; and

     WHEREAS, the Borrower intends to use the proceeds from the loan to redeem
the Borrower's Series B Preferred Stock and has secured the commitment from
Affiliated Investments, L.L.C. ("Affiliated") to lend the Company additional
funds to redeem such preferred stock which requires the grant of a lien and
security interest in the Collateral that is superior to the lien and security
interest granted by this Security Agreement.

     NOW, THEREFORE, in consideration of the promises set forth therein and
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower hereby agrees as
follows:

                                    AGREEMENT

     Section 1. Effective Date. This Security Agreement shall not become
effective and no security interest hereunder shall attach until the lien and
security interest granted pursuant to the Existing Security Agreement is
completely released. The date of such release shall be the "Effective Date" for
purposes of this Security Agreement, and none of the grants, assurances,
representations or warranties provided for herein shall become effective until
the Effective Date.

     Section 2. Grant of Security. The Borrower hereby assigns and pledges to
the Lender, and hereby grants to the Lender a lien on and security interest in,
all of the Borrower's right, title and interest in and to the following items,
whether now owned or hereafter acquired (collectively, the "Collateral"):

          (a) Patents. All patents and patent applications and the inventions
     and improvements described and claimed therein, including without
     limitation, all patents and

<PAGE>

     applications described on Schedule I, together with (i) all reissues,
     divisionals, continuations, renewals, substitutions, extensions and
     continuations-in-part thereof, (ii) all income, royalties, damages and
     payments now or hereafter due or payable under and with respect thereto,
     including without limitation, damages and payments for past, present and
     future infringements thereof, (iii) the right to sue for past, present and
     future infringements thereof, and (iv) all rights corresponding, incident
     or relating thereto (collectively, the "Patents");

          (b) Trademarks. All trademarks, trademark applications and
     registrations, trade names and trade name applications and registrations,
     including without limitation, all trademarks and applications and
     registrations listed on Schedule I, together with (i) all renewals thereof,
     (ii) all income, royalties, damages and payments now or hereafter due or
     payable with respect thereto, including without limitation, damages and
     payments for past, present and future infringements thereof, (iii) the
     right to sue for past, present and future infringements thereof, and (iv)
     all rights corresponding, incident or relating thereto (collectively, the
     "Trademarks"), and together with the goodwill and assets of Borrower's
     business (including without limitation, know-how, trade secrets, customer
     lists, proprietary information, inventions, methods, procedures and
     formulas) connected with the use of and symbolized by the Trademarks;

          (c) Copyrights. All copyrights and copyright registrations together
     with (i) all renewals and extensions thereof, (ii) all income, royalties,
     damages and payments now or hereafter due or payable under and with respect
     thereto, including without limitation, damages and payments for past,
     present and future infringements thereof, (iii) the right to sue for past,
     present and future infringements thereof, and (iv) all rights
     corresponding, incident or relating thereto (collectively, the
     "Copyrights");

          (d) Licenses. All licenses and similar agreements and covenants not to
     sue with respect to all Patents, Trademarks and Copyrights, or any of them
     (other than any existing license agreements or covenants not to sue which
     by their terms prohibit assignment, transfer or the grant of a security
     interest by Borrower or give the other party thereto the right to terminate
     the same upon an assignment, transfer or the grant of a security interest
     therein, which licenses or covenants not to sue do not in the aggregate
     have a material adverse effect on the value or utility of the assets of
     Borrower individually or as a whole), together with (i) all renewals,
     extensions, supplements and continuations thereof and supplements thereto,
     (ii) income, royalties, damages and payments now or hereafter due or
     payable with respect thereto, including without limitation, damages and
     payments for past, present and future breaches thereof, (iii) the right to
     sue for past, present and future breaches thereof, and (iv) all rights
     corresponding, incident or relating thereto (collectively, the "Licenses");
     and

          (e) Proceeds. All proceeds and products of any and all of the
     foregoing and, to the extent not otherwise included, any payments under
     insurance (whether or not Lender is the loss payee thereof) or under any
     indemnity, warranty or guaranty by reason of loss to or otherwise with
     respect to any of the foregoing.

     In each case, the foregoing shall be covered by this Security Agreement,
whether Borrower's ownership or other rights therein are presently held or
hereafter acquired (by

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operation of law or otherwise) and howsoever Borrower's interests therein may
arise or appear (whether by ownership, security interest, claim or otherwise).

     Section 3. Security for Liabilities. This Security Agreement secures the
payment of (i) all obligations of the Borrower now or hereafter existing under
the Note, whether for principal, interest, expenses or otherwise, and (ii) all
obligations of the Borrower now or hereafter existing under this Security
Agreement (all such obligations, together with the obligations, being the
"Liabilities"). Without limiting the generality of the foregoing, this Security
Agreement secures (subordinate only to the superior security interest in the
Collateral which will be granted to Affiliated) the payment of all amounts which
constitute part of the Liabilities which are now or at any time hereafter owing
by the Borrower to the Lender under the Note.

     Section 4. Representations and Warranties. The Borrower represents and
warrants as of the Effective Date:

          (a) Borrower is a corporation duly organized, validly existing and in
     good standing under the laws of the State of Delaware. The address of the
     chief place of business and chief executive office of the Borrower is 4600
     S. Ulster. Suite 700 Denver, Colorado 80237.

          (b) The Borrower is the legal and beneficial owner of the Collateral
     free and clear of any lien, security interest, option or other charge or
     encumbrance except for the security interest created by this Security
     Agreement and the security interest to be granted to Affiliated. No
     effective financing statement or other document similar in effect covering
     all or any part of the Collateral is on file in any recording office,
     except such as may have been filed in favor of the Lender related to this
     Security Agreement. The Borrower's exact full legal name is, and for the
     previous five year period was, as set forth in the first paragraph of this
     Security Agreement. Borrower has no trade names or styles.

          (c) This Security Agreement creates a valid security interest in the
     Collateral which, upon the filing of a UCC-1 Financing Statement pursuant
     to the applicable provisions of the UCC, shall constitute a perfected
     security interest in the Collateral (subordinate only to the superior
     security interest in the Collateral which will be granted to Affiliated)
     securing the payment of the Liabilities.

          (d) As of the date of the closing of the transactions contemplated by
     the Purchase Agreement, no consent of any other person or entity and no
     authorization, approval or other action by, and no notice to or filing
     with, any governmental authority or regulatory body is required (i) for the
     grant by the Borrower of the security interest granted hereby or for the
     execution, delivery or performance of this Security Agreement by the
     Borrower, (ii) for the perfection or maintenance of the security interest
     created hereby (other than the filing of UCC financing Statements
     describing the Collateral, in accordance with the applicable provisions of
     the UCC) or (iii) for the exercise by the Lender of its rights and remedies
     hereunder.

     Section 5. Further Assurances.

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          (a) The Borrower agrees that after the Effective Date from time to
     time, at the expense of the Borrower, the Borrower will promptly execute
     and deliver all further instruments and documents, and take all further
     action, that may be necessary or desirable, or that the Lender may
     reasonably request, in order to perfect and protect any security interest
     granted or purported to be granted hereby or to enable the Lender to
     exercise and enforce its rights and remedies hereunder with respect to any
     Collateral. Without limiting the generality of the foregoing, upon the
     Effective Date, the Borrower will upon such request, execute and file such
     financing or continuation statements, or amendments thereto, and such other
     instruments or notices, as may be necessary or desirable, or as the Lender
     may request, in order to perfect and preserve the security interest granted
     or purported to be granted hereby.

          (b) As of the Effective Date, the Borrower hereby authorizes the
     Lender to file one or more financing or continuation statements, and
     amendments thereto, related to all or any part of the Collateral without
     the signature of the Borrower where permitted by law. A photocopy or other
     reproduction of this Security Agreement or any financing statement covering
     the Collateral or any part thereof shall be sufficient as a financing
     statement where permitted by law.

          (c) The Borrower will furnish to the Lender from time to time
     statements and schedules further identifying and describing the Collateral
     and such other reports in connection with the Collateral as the Lender may
     reasonably request, all in reasonable detail.

     Section 6. Location of Collateral. The Borrower shall keep its chief place
of business and chief executive office and the office where it keeps its records
concerning the Collateral, if any, at the locations referred to in Section 4(a)
or, upon 30 days' prior written notice to the Lender, at any other locations in
a jurisdiction where all action required by Section 5 shall have been taken with
respect to the Collateral. The Borrower shall not change its name or its
jurisdiction of incorporation unless prior written notice has been provided to
Lender.

     Section 7. Transfers and Other Liens. The Borrower shall not (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral, or (ii) after the Effective Date,
create or permit to exist any lien, security interest, option or other charge or
encumbrance upon or with respect to any of the Collateral with rights superior
to those granted to Lender under this Security Agreement, except as provided
herein. Lender acknowledges and accepts that Borrower intends to grant liens and
security interests to Affiliated that will be superior to the rights granted to
Lender under this Security Agreement.

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     Section 8. Events of Default. The continuation of any of the following
after 10 days written notice to the Borrower shall constitute an "Event of
Default" hereunder:

          (a) Borrower shall fail to pay the Liabilities or fail to perform any
obligations hereunder, or under the Note;

          (b) Any representation, warranty, or statement made by Borrower herein
or in connection with this Security Agreement or the Note shall prove to have
been incorrect or untrue in any material respect on or as of the date made, or
as of the Effective Date, as applicable; or

          (c) Borrower shall default in the observance or performance of any
term, indemnity, covenant or agreement contained herein or in connection with
the Note.

     Section 9. Lender Appointed Attorney-in-Fact. The Borrower hereby
irrevocably appoints the Lender the attorney-in-fact of the Borrower, with full
authority in the place and stead of the Borrower and in the name of the
Borrower, the Lender or otherwise, from time to time in the Lender's discretion
following the occurrence and during the continuance of an Event of Default, to
take any action and to execute any instrument which the Lender may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including, without limitation:

          (a) To ask, demand, collect, sue for, recover, compromise, receive and
     give acquittance and receipts for moneys due and to become due under or in
     connection with the Collateral.

          (b) To receive, endorse, and collect any drafts or other instruments,
     documents and chattel paper, in connection therewith.

          (c) To file any claims or take any action or institute any proceedings
     which the Lender may deem necessary or desirable for the collection of any
     of the Collateral or otherwise to enforce the rights of the Lender with
     respect to any of the Collateral.

     The provisions of this Section 9 shall terminate upon termination of the
Note and the complete satisfaction and repayment of all of Borrower's
obligations thereunder.

     Section 10. The Lender's Duties. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Lender shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. The Lender shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which the Lender accords its own property.

     Section 11. Remedies. If any Event of Default shall have occurred and be
continuing:

          (a) Subject to Borrower's right to redeem the Collateral at any time
     prior to any disposition of such collateral to a bona fide third party, the
     Lender may exercise in respect of the Collateral, in addition to other
     rights and remedies provided for herein or

                                       5

<PAGE>

     otherwise available to it, all the rights and remedies of a secured party
     on default under the UCC (whether or not the UCC applies to the affected
     Collateral), and also may (i) require the Borrower to, and the Borrower
     hereby agrees that it will at its expense and upon request of the Lender
     forthwith, assemble all or part of the Collateral as directed by the Lender
     and make it available to the Lender at a place to be designated by the
     Lender which is reasonably convenient to both parties and (ii) without
     notice except as specified below, sell the Collateral or any part thereof
     in one or more parcels at public or private sale, at any of the Lender's
     offices or elsewhere, for cash, on credit or for future delivery, and upon
     such other terms as the Lender may deem commercially reasonable. The
     Borrower agrees that, to the extent notice of sale shall be required by
     law, at least thirty days' notice to the Borrower of the time and place of
     any public sale or the time after which any private sale is to be made
     shall constitute reasonable notification. The Lender shall not be obligated
     to make any sale of Collateral regardless of notice of sale having been
     given. The Lender may adjourn any public or private sale from time to time
     by announcement at the time and place fixed therefor, and such sale may,
     without further notice, be made at the time and place to which it was so
     adjourned. Lender may disclaim warranties of title, possession, quiet
     enjoyment and the like. Any action pursuant to this paragraph shall not
     affect the commercial reasonableness of the sale.

          (b) Any cash held by the Lender as Collateral and all cash proceeds
     received by the Lender in respect of any sale of, collection from, or other
     realization upon all or any part of the Collateral may, in the discretion
     of the Lender, be held by the Lender as Collateral for, and/or then or at
     any time thereafter be applied in whole or in part by the Lender against,
     all or any part of the Liabilities. Any surplus of such cash or cash
     proceeds held by the Lender and remaining after payment in full of all the
     Liabilities shall be paid over to the Borrower or to whomsoever may be
     lawfully entitled to receive such surplus.

     Section 12. Amendments, Etc. No amendment or waiver of any provision of
this Security Agreement, and no consent to any departure by the Borrower
heretofrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

     Section 13. Addresses for Notices. All notices and other communications
provided for hereunder shall be made, and shall be effective when made, in the
manner and to the addresses set forth in the Note.

     Section 14. Continuing Security Interest. This Security Agreement shall
create a continuing assignment of and security interest in the Collateral and
shall (i) remain in full force and effect until the payment in full of the
Liabilities, (ii) be binding upon the Borrower, its successors and assigns and
(iii) inure to the benefit of, and be enforceable by, the Lender and its
permitted successors, transferees and assigns. Upon any termination of the
Security Agreement, the Lender will, at the Borrower's expense, execute and
deliver to the Borrower such documents as the Borrower shall reasonably request
to evidence such termination.

     Section 15. GOVERNING LAW. THE LENDER AND THE BORROWER AGREE THAT EXCEPT AS
REQUIRED BY MANDATORY PROVISIONS OF LAW

                                       6

<PAGE>

AND EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR ANY OF THE REMEDIES HEREUNDER, IN RESPECT OF PARTICULAR COLLATERAL, MAY BE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF COLORADO, ANY
DISPUTE BETWEEN THEM ARISING OUT OF OR RELATED TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS SECURITY AGREEMENT, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF COLORADO.

     Section 16. Severability. Wherever possible, each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Security
Agreement.

     Section 17. Section Headings. All section headings are inserted for
convenience of reference only and shall not affect any construction or
interpretation of this Security Agreement.

     Section 18. Execution. This Security Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. To the extent
that any other document or instrument between the Borrower and the Lender in
existence as of the date hereof purports to grant any security interest in and
to the Collateral to the Lender, this Security Agreement hereby supercedes and
replaces any such document or instrument and all terms thereof.

                                       7

<PAGE>

     The parties hereto have caused this Security Agreement to be executed as of
the date first above written and to be effective as of the Effective Date.

                                   BORROWER:

                                   POLAR MOLECULAR CORPORATION

                                   By: /s/ Mark L. Nelson
                                       -----------------------------------------
                                           Mark L. Nelson
                                           President and Chief Executive Officer

                                   LENDER:

                                   LOCKHART HOLDINGS, INC.

                                   By: /s/ Thomas J. Gillespie, Jr.
                                       -----------------------------------------
                                           Thomas J. Gillespie, Jr.
                                           President

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