Document:

Secured promissory note, dated August 26, 2002

  
 Exhibit 10.1 
  
 THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE PARENT OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
PARENT TO THE EFFECT THAT REGISTRATION UNDER THE SECURITIES ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE OR ANY SHARES OF COMMON STOCK ISSUED UPON
CONVERSION OF THIS NOTE. 
  
 THIS NOTE IS ENTITLED TO THE BENEFIT OF THAT CERTAIN SECURITY AGREEMENT, DATED AUGUST
26, 2002, BY AND AMONG JLM SA, THE PARENT AND JLM CHEMICALS, INC. IN FAVOR OF THE PAYEE (THE “SECURITY AGREEMENT”) AND THE DEED OF TRUST, DATED AUGUST 26, 2002, OF JLM REALTY, INC. IN FAVOR OF THE PAYEE (THE “DEED OF
TRUST”). 
  
 
 
 JLM REALTY,
INC. 
  
 JLM INDUSTRIES (SOUTH AFRICA) (PROPRIETARY) LIMITED 
  

August 26, 2002 
  
 $2,000,000 

 
 SECURED PROMISSORY NOTE 
  
 JLM Realty, Inc. (“JLM Realty”), a North Carolina corporation and a wholly-owned subsidiary of JLM Industries, Inc. (the “Parent”) and JLM Industries (South Africa)
(Proprietary) Limited (“JLM SA”), a company organized under the laws of South Africa and a wholly-owned subsidiary of the Parent (JLM SA and JLM Realty are collectively referred to herein as the “Borrowers” and each
individually as a “Borrower”), for value received, hereby promise, jointly and severally, to pay to the order of The Philip S. Sassower 1996 Charitable Remainder Annuity Trust (the “Payee”) on December 31, 2002 (the
“Maturity Date”), the principal sum of Two Million Dollars ($2,000,000) or such lesser principal amount as shall at such time be outstanding hereunder (the “Principal Amount”). Each payment by the Borrowers pursuant
to this Note shall be made without set-off or counterclaim and shall be made in lawful currency of the United States of America and in immediately available funds. Interest on this Note shall accrue on the Principal Amount outstanding from time to
time at a rate per annum computed in accordance with Section 2 hereof, provided, that after the Maturity Date or upon an Event of Default, the rate of interest applicable to the unpaid Principal Amount and accrued interest shall be 4% in
excess of that otherwise applicable pursuant to Section 2 of this Note, but in no event in excess of the Maximum Rate provided in Section 2B of this Note. 

 

  
 Accrued and unpaid interest shall commence on the date hereof and be payable upon
maturity (whether at the Maturity Date, by acceleration or otherwise) and after maturity until paid in full (after as well as before judgment), on demand. All computations of interest hereunder shall be made based on the actual number of days
elapsed in a year of 360 days (including the first day but excluding the last day during which any such Principal Amount is outstanding). The Principal Amount of this Note together with interest accrued and unpaid thereon shall be payable on the
Maturity Date unless this Note is prepaid in accordance with Section 1 hereof.  
  
 The amount of all
repayments of principal, interest rates applicable thereto and interest accrued thereon shall be recorded on the records of the Parent or the Borrowers and, prior to any transfer of, or any action to collect on, this Note, shall be endorsed on this
Note. Any such recordation or endorsement shall constitute prima facie evidence of the accuracy of the information so recorded or endorsed, but the failure to record any such amount or rate shall not limit or otherwise affect the
obligations of the Borrowers hereunder to make payments of principal or interest when due. All payments by the Borrowers hereunder shall be applied first to pay any interest which is due, but unpaid, then to reduce the Principal Amount.

  
 The Parent and the Borrowers (i) waive presentment, demand, protest or notice of any kind in connection with this
Note and (ii) agree to pay to the holder hereof, on demand, all costs and expenses (including reasonable legal fees and expenses) incurred in connection with the enforcement and collection of this Note. 
  
 1.  Payment Terms.    A. Optional.    The Borrowers may prepay the
Principal Amount of this Note, in whole or in part and without penalty, at any time prior to the Maturity Date. 
  
 B.  Mandatory.    If, prior to the Maturity Date, the Borrowers or the Parent consummates one or more financings or one or more sales of assets (other than in the ordinary course of
business consistent with past practice), or a combination of both, which provide at least an aggregate of $1,000,000 in gross proceeds, then the Borrowers or the Parent, as applicable, shall be required to immediately apply 50% of the Excess
Proceeds (as defined below) to the Principal Amount and accrued interest then outstanding under this Note. Notwithstanding the foregoing, in the event that, prior to the Maturity Date: (A) the Parent consummates the sale of any shares of the capital
stock of JLM SA, in one or more transactions, the Parent shall be required to immediately apply 75% of the Excess Proceeds received in connection with such sale to the Principal Amount and accrued interest then outstanding under this Note; and (B)
JLM SA consummates one or more sales of assets, JLM SA shall be required to immediately apply 75% of the Excess Proceeds received in connection with such sale or sales to the Principal Amount and accrued interest then outstanding under this Note.
For purposes hereof, “Excess Proceeds” shall mean all proceeds received by the Parent or a Borrower (in connection with one or more financings or one or more sales of assets) net of transaction costs related to such sale or
financing, but only to the extent the Parent or the Borrower is not required by existing agreements to apply any of the proceeds to reduce outstanding debt to its senior lenders. 
  
 C.  After Maturity Date.    In consideration of the benefits conferred upon the Parent by the loan represented by this Note and
the financial accommodation extended by the Payee, in the event that the Borrowers do not pay the Principal Amount and accrued interest on this Note in full on or prior to the Maturity Date, the Payee shall be entitled to the right to 

 
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 purchase up to 1,666,666 shares (the “Warrant Shares”) of the Parent’s common
stock, par value $0.01 per share (“Common Stock”), as evidenced by a Warrant (the “Warrant”) which shall be issued on the date of this Note and shall be in the form attached hereto as Exhibit
A. 
  
 2.  Computation of Interest. 
  
 A.  Base Interest Rate.    Except as expressly set forth herein, the outstanding Principal Amount
shall bear interest at the rate per annum equal to the interest rate applicable to the amounts due by the Parent pursuant to the Promissory Note, dated as of June 28, 2001, by the Parent in favor of GATX Capital Corporation in the original principal
amount of $7,135,000 (the “GATX Note”), which interest rate shall be adjusted from time to time in the same manner that the interest rate applicable to the GATX Note is adjusted pursuant to the terms thereof. 

 
 B.  Maximum Rate.    In the event that it is determined by final order of a court or
governmental authority that, under the laws relating to usury applicable to the Borrowers or the indebtedness evidenced by this Note, the interest charges and fees payable by the Borrowers in connection herewith or in connection with any other
document or instrument executed and delivered in connection herewith cause the effective interest rate applicable to the indebtedness evidenced by this Note to exceed the maximum rate allowed by law (the “Maximum Rate”), then such
interest shall be recalculated for the period in question and any excess over the Maximum Rate paid with respect to such period shall be credited, without further agreement or notice, to the Principal Amount outstanding hereunder to reduce said
balance by such amount with the same force and effect as though the Borrowers had specifically designated such extra sums to be so applied to principal and the Payee had agreed to accept such extra payment(s) as a premium-free prepayment. All such
deemed prepayments shall be applied to the principal balance payable at maturity. 
  
 3.  Representations of the Parent and the Borrowers. 
  
 The Parent and the
Borrowers hereby jointly and severally represent and warrant to the Payee as follows: 
  
 A.  Organization and Standing.    The Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and
authority to conduct its business as presently conducted and as proposed to be conducted by it and to enter into and perform (to the extent applicable to the Parent) this Note, the Warrant, the Security Agreement and the Deed of Trust (collectively,
the “Principal Transaction Documents”) and any related documents and agreements and to carry out the transactions contemplated hereby and thereby. JLM Realty is a corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina and has full corporate power and authority to conduct its business as presently conducted and as proposed to be conducted by it and to enter into and perform the Principal Transaction Documents
applicable to it and any related documents and agreements and to carry out the transactions contemplated hereby and thereby. JLM SA is a company duly organized, validly existing and in good standing under the laws of South Africa and has full
corporate power and authority to conduct its business as presently conducted and as proposed to be conducted by it and to enter into and perform the Principal Transaction Documents applicable to it and any related documents and agreements and

 
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 to carry out the transactions contemplated hereby and thereby. The Parent, the
Borrowers and each other Subsidiary (as defined below) are duly qualified and in good standing in each jurisdiction in which the character or location of its properties or nature of its business makes such qualification necessary. 

 
 B.  Capitalization.    The authorized and outstanding capital stock of the
Parent is as described in the Parent’s Annual Report on Form 10-K for the year ended December 31, 2001 (the “Annual Report”) and Quarterly Report on Form 10-Q for the three months ended June 30, 2002 (“Quarterly
Report”, and collectively with the Annual Report, the “SEC Documents”). The Parent has heretofore delivered to Payee a true and complete copy of the Annual Report and the Quarterly Report. Except as set forth in the SEC
Documents or as set forth pursuant to this Note, (i) no subscription, warrant, option, convertible security or other right (contingent or otherwise) to purchase or acquire any shares of capital stock of the Parent is authorized or outstanding, (ii)
there is no commitment of the Parent to issue any subscription, warrant, option, convertible security or other such right or to issue or distribute to holders of any shares of its capital stock any evidence of indebtedness or assets of the Parent,
and (iii) the Parent has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof. Except as
provided in the SEC Documents, no person or entity is entitled to (i) any preemptive or similar right with respect to the issuance of any capital stock of the Parent, or (ii) any rights with respect to the registration of any capital stock of the
Parent under the Securities Act. 
  
 C.  Subsidiaries.    On the
date hereof, the Parent has eight (8) Subsidiaries: JLM Realty, JLM SA, JLM Marketing, Inc., JLM International, Inc., JLM Industries (Europe) B.V., JLM Chemicals Canada, Inc, JLM Chemicals, Inc. and JLM (Ind), Inc. As used herein, the term
“Subsidiary” shall mean any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are owned directly or
indirectly through one or more intermediaries, or both, by the Parent. 
  
 D.  Issuance
of Shares.    The issuance, sale and delivery of this Note, the Warrant Shares and the shares of Common Stock issuable upon conversion of the Note (the “Conversion Shares”) in accordance with the terms hereof
have been duly authorized by all necessary corporate action on the part of the Parent and the Borrowers, and the Warrant Shares and the Conversion Shares, when issued, sold and delivered against payment therefor in accordance with the provisions of
this Note and the Warrant, will be duly and validly issued, fully paid and nonassessable and will not be issued in violation of any preemptive or similar rights. The Parent will issue the Warrant Shares, upon exercise of the Warrant in accordance
with the terms thereof, and the Conversion Shares, upon conversion of the Note in accordance with the terms hereof, free and clear of all Liens (as defined in Section 4.B(iii) hereof). 
  
 E.  Authority.    The execution, delivery and performance by the Parent and the Borrowers of the Principal Transaction
Documents and any related documents and agreements have been duly authorized by all necessary corporate action, and the Principal Transaction Documents and any related documents and agreements have been duly executed and delivered by the Parent and
the Borrowers. The Principal Transaction Documents and related agreements 

 
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 constitute valid and binding obligations of the Parent and the Borrowers
enforceable against the Parent and the Borrowers in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights
in general and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). The execution, delivery and performance of the Principal Transaction Documents and any related documents and
agreements and the consummation of the transactions contemplated hereby and thereby do not and will not violate any provision of law applicable to the Parent or any Subsidiary and do not and will not conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default under, the certificate of incorporation or bylaws of the Parent or any Subsidiary, or any indenture, lease, agreement or other instrument to which the Parent or any Subsidiary is a
party or by which it or any of its properties or assets is bound, or any decree, judgment, order, statute, rule or regulation applicable to the Parent or any Subsidiary. 
  
 F.  Governmental Consents.    No consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority is required on the part of the Parent or any Subsidiary in connection with the execution and delivery of the Principal Transaction Documents and any related documents and agreements
or the other transactions contemplated hereby or thereby, except for such filings as shall have been made prior to and shall be effective on and as of the date hereof, if any. 
  
 G.  Litigation.    There is no action, suit, proceeding or investigation pending, or threatened, against the Parent or
any Subsidiary which questions the validity of the Principal Transaction Documents and any related documents and agreements or the right of the Parent and the Borrowers to execute, deliver and perform any of the foregoing, or which might result,
either individually or in the aggregate, in any material adverse change in the assets, results of operations, conditions (financial or otherwise), net worth, business or prospects of the Parent and its Subsidiaries taken as a whole (a
“Material Adverse Change”). 
  
 H.  Property and
Assets.    Each of the Parent and its Subsidiaries has good title to all of its properties and assets, including all properties and assets reflected in the financial statements included with the SEC Documents, except those
disposed of since the date thereof in the ordinary course of business consistent with past practice, and none of such properties or assets is subject to any mortgage, pledge, lien, security interest, lease, charge, claim or encumbrance other than
those the material terms of which are described in the SEC Documents. 
  
 I.  Compliance.    Each of the Parent and its Subsidiaries has, in all material respects, complied with all laws, regulations and orders applicable to its present and proposed business as
described in the SEC Documents and has all permits, consents, approvals, authorizations, orders, registrations, qualifications and licenses (“Licenses”) of and from all public, regulatory or governmental agencies and bodies
necessary to own its properties and conduct its existing and proposed business and is in compliance in all material respects with such Licenses. 
  
 J.  Financial Statements.    The financial statements included in the SEC Documents present fairly in all material respects the financial position, results of
operations and changes in financial position of the Parent as of the dates and for the periods indicated in 

 
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 conformity with generally accepted accounting principles consistently applied
(“GAAP”) during such periods. As of December 31, 2001, the Parent did not have any direct or indirect indebtedness, liability, claim, loss, damage, deficiency or obligation, whether fixed or unfixed, liquidated or unliquidated,
secured or unsecured, contingent or otherwise of a kind required by GAAP to be set forth on a financial statement or in the notes thereto (“Liabilities”) that were not fully and adequately reflected on or reserved against the
Parent’s balance sheet at such date included in the Annual Report (the “Balance Sheet”). Except as disclosed in the Quarterly Report, since December 31, 2001, the Parent has not incurred any Liability, other than Liabilities
incurred in the ordinary course of business, none of which, individually or in the aggregate, are material. 
  
 K.  Absence of Certain Changes.    Except as disclosed in the SEC Documents, since December 31, 2001, each of the Parent and its Subsidiaries has conducted its business in the ordinary and usual
course consistent with past practices and has not (i) transferred to any other person, corporation or entity any Intellectual Property (as hereinafter defined), except for licenses granted by the Parent or any Subsidiary to third parties in the
ordinary course of business consistent with past practices, (ii) made any loan, advance, capital contribution or investment in any person or entity, (iii) terminated or amended in any material respect any material contract to which the Parent or
such Subsidiary is a party or by which it is bound, (iv) increased the compensation payable to any employee of the Parent or such Subsidiary except in the ordinary course of business, consistent with past practice, (v) suffered any material damage,
destruction or other loss (whether or not covered by insurance) affecting its business or assets, (vi) made any material change in its business policies, (vii) taken any action or agreed to take any action which, if taken prior to the date hereof,
would have made any representation or warranty herein untrue, or (viii) suffered any Material Adverse Change. 
  
 L.  No Defaults.    Neither the Parent nor any Subsidiary is in default and, to the knowledge of the Parent and the Borrowers, no other party is in default, nor does there exist any event that,
with notice or lapse of time or both, would constitute a default or give rise to rights of termination, under any material agreement or other instrument to which the Parent or any Subsidiary is a party or by which it or its properties are bound. All
such agreements and instruments are valid, subsisting in full force and effect and binding on the parties. 
  
 M.  Intellectual Property.    Except as disclosed in the SEC Documents, the Parent owns (or is authorized to use), free and clear of any Liens, all patents, trademarks, copyrights, service marks,
trade secrets, manufacturing and process know-how, processes, unpatented inventions, technical information, technology, designs and other intellectual property utilized in the conduct of its business as described in the Annual Report (the
“Intellectual Property”). To the Parent’s knowledge, the Intellectual Property does not infringe upon the rights of others. 
  
 N.  Accuracy.    None of the representations and warranties contained herein or in the Security Agreement, nor any of the statements made in SEC Documents contain
any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. 

 
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 O.  Full
Disclosure.    There is no fact or circumstance which the Parent and the Borrowers have not disclosed to Payee in writing that could reasonably be expected to result in a Material Adverse Change. 
  
 4.  Covenants of Parent and the Borrowers. 
  
 A.  Affirmative Covenants.    The Parent and the Borrowers covenant and agree that, so long as this Note shall be outstanding, they
will each perform the obligations set forth in this Section 4A (it being agreed that these covenants shall apply equally to the Parent, the Borrowers and each other Subsidiary as if fully set forth herein): 
  
 (i)  Taxes and Levies.    The Parent will file when due all federal, state and local
income tax returns and will promptly pay and discharge all taxes, assessments, and governmental charges or levies imposed upon the Parent or upon its income and profits, or upon any of its property, before the same shall become delinquent, and will
discharge when due all claims for labor, materials and supplies which, if unpaid, might become a lien or charge upon any material properties of the Parent or any material part thereof, provided, however, that the Parent shall not be
required to pay and discharge any such tax, assessment, charge, levy or claim so long as the validity thereof shall be contested in good faith by appropriate proceedings and the Parent shall set aside on its books adequate reserves in accordance
with GAAP with respect to any such tax, assessment, charge, levy or claim so contested; 
  
 (ii)  Maintenance of Existence.    The Parent will do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate existence, rights and
franchises and comply with all laws applicable to the Parent; 
  
 (iii)  Maintenance of
Property.    The Parent will maintain, preserve, protect and keep its material property used or useful in the conduct of its business in good repair, working order and condition, and from time to time make all needful and
proper repairs, renewals, replacements and improvements thereto as shall be reasonably required in the conduct of its business; 
  
 (iv)  Insurance.    The Parent will, to the extent necessary for the operation of its business, keep adequately insured by financially sound reputable insurers, all
property of a character usually insured by similar corporations and carry such other insurance as is usually carried by similar corporations; 
  
 (v)  Books and Records.    The Parent will at all times keep true and correct in all material respects its books, records and accounts reflecting all of its
business affairs and transactions in accordance with GAAP. Such books and records shall be open at reasonable times and upon reasonable notice to the inspection of the Payee or its agents; 
  
 (vi)  Notice of Certain Events.    The Parent will give prompt written notice (with a description in reasonable detail)
to the Payee of: 

 
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 (a)  the occurrence of any Event of Default (as defined
in Section 5) or any event which, with the giving of notice or the lapse of time, would constitute an Event of Default; 
  
 (b)  the occurrence of any litigation, arbitration or governmental investigation or proceeding not previously disclosed by the Parent to the Payee in writing which has been instituted or, to the knowledge of the
Parent, is threatened, against the Parent or to which any of its properties, assets or revenues is subject which, if adversely determined, would reasonably be expected to result in a Material Adverse Change; 
  
 (c)  the occurrence of any event of default or any event which, with the giving of notice or the lapse of time,
would constitute an event of default under any document or instrument evidencing or governing any indebtedness of the Parent in the principal amount exceeding $25,000 or the delivery of any notice effecting the acceleration of any such indebtedness;

  
 (d)  any material development which shall occur in any litigation, arbitration or
governmental investigation or proceeding previously disclosed by the Parent to the Payee; and 
  
 (e)  the occurrence of any other circumstance which has a reasonable likelihood of resulting in a Material Adverse Change; 
  
 (vii)  Other Obligations.    The Parent will maintain all of its obligations and agreements material to its business in
whatever manner incurred, including but not limited to obligations for borrowed money or for services or goods purchased, as they become due in accordance with their terms; 
  
 (viii)  Compliance with Laws.    The Parent will comply in all material respects with all applicable federal, state and
local laws, rules, regulations and orders; and 
  
 (ix)  Licenses and Intellectual
Property.    The Parent will maintain in full force and effect all Licenses and will maintain, preserve and protect all Intellectual Property necessary to conduct its business. 
  
 B.  Negative Covenants.    The Parent and the Borrowers covenant and agree that, so long as this Note
shall be outstanding, they will each perform the obligations set forth in this Section 4B (it being agreed that these prohibitions, shall apply equally to the Parent, the Borrowers and each other Subsidiary as if fully set forth herein):

  
 i.  Liquidation, Dissolution.    The Parent will not
liquidate or dissolve, consolidate with, or merge into or with, any other corporation or other entity; 
  
 ii.  Sales of Assets.    The Parent will not sell, transfer, lease or otherwise dispose of, or grant options, warrants or other rights with respect to all or a substantial part of its properties
or assets to any person or entity; 

 
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 (iii)  Liens.    The Parent
will not create, incur, assume or suffer to exist any mortgage, pledge, hypothecation, assignment, security interest, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention agreement and any financing lease) (each, a “Lien”) upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:

  
 (a)  Liens for taxes, assessments or other governmental charges or levies not at the
time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; 
  
 (b)  Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of
business (1) for sums not overdue or being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books or (2) relating to property of the Parent which is not
material in value or is not material to the conduct of the business of the Parent; 
  
 (c)  judgment Liens which, to the extent not covered by insurance, do not exceed $50,000 or which are in existence less than 30 days after the entry thereof or with respect to which execution has been stayed; and

  
 (d)  Liens of GATX Capital Corporation and Congress Financial Corporation pursuant to
existing credit agreements with such senior lenders. 
  
 (iv)  Redemptions.    The Parent will not redeem or repurchase any outstanding equity securities of the Parent; 
  
 (v)  Transactions with Affiliates.    The Parent will not enter into any transaction, including, without limitation,
the purchase, sale, lease or exchange of property, real or personal, or the rendering of any service, with any person or entity affiliated with the Parent, except upon terms not less favorable than would be obtained in a comparable arms-length
transaction with any other person or entity not affiliated with the Parent; 
  
 (vi)  Additional Indebtedness.    The Parent and the Borrowers will not incur, create, assume or otherwise become obligated in respect of or permit to be outstanding at any time any Indebtedness
(as hereinafter defined), except for Indebtedness which does not individually or in the aggregate exceed $250,000 at any time and any Indebtedness of the Parent or the Borrowers existing on or prior to the date hereof or Indebtedness incurred
pursuant to the Parent’s existing credit agreements with its lenders. As used herein, the term “Indebtedness” shall mean (a) money borrowed by the Parent or either Borrower from any person; (b) any indebtedness of the Parent or
either Borrower arising under leases required to be capitalized under GAAP or evidenced by a note, bond, debenture or similar instrument; (c) any indebtedness of the Parent or either Borrower arising under purchase money obligations or representing
the deferred purchase price of property and services (other than current trade payables incurred in 

 
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 the ordinary course of the business); and (d) any liability of the Parent or
either Borrower under any guaranty, letter of credit, performance credit or other agreement having the effect of assuring a creditor against loss. 
  
 (vii)  Dividends.    The Parent will not: (a) declare or pay any dividends (other than dividends payable in capital
stock) on, (b) apply any property or assets of the Parent or any Subsidiary to the purchase, redemption or other retirement of, (c) set apart any sum for the payment of any dividends on or for the purchase, redemption or other retirement of, or (d)
make any other distribution by reduction of capital or otherwise in respect of, any shares of any class of capital stock of the Parent or any Subsidiary (other than a wholly-owned Subsidiary). 
  

(viii)  Investments.    The Parent will not make any investment in or capital contribution to, or make or permit
to be outstanding any loan, advance or extension of credit to or purchase, acquire or incur any liability for the purchase or acquisition of any business, assets or securities of any person, or entity except (a) loans, advances and extensions of
credit existing on the date of this Note or made on account of sales on credit in the ordinary course of business, (b) purchases or acquisitions of assets in the ordinary course of business consistent with past practice, (c) travel advances in the
ordinary course of business to officers and employees, (d) advances in the ordinary course of business consistent with past practice to employees or consultants and (e) temporary cash investments consisting of investments in prime commercial paper,
short-term investment grade securities or certificates of deposit. 
  
 (ix)  Acquisitions.    The Parent will not acquire an interest in any corporation, partnership, joint venture or similar entity. 
  
 5.  Events of Default 
  
 A.  The term “Event of Default” shall mean any of the events set forth in this Section 5A: 
  
 (i)  Non-Payment of Obligations.    The Borrowers fail to pay any principal or interest on this Note when and as the same shall become due and payable (except as
otherwise provided in Section 1), whether by acceleration or otherwise, for a period of more than three (3) business days; 
  
 (ii)  Non-Performance of Affirmative Covenants.    The Parent, the Borrowers or any other Subsidiary defaults in the due observance or performance of any covenant set forth in Section 4A,
which default shall continue uncured for 10 days; 
  
 (iii)  Non-Performance of Negative
Covenants.    The Parent, the Borrowers or any other Subsidiary defaults in the due observance or performance of any covenant set forth in Section 4B; 
  
 (iv)  Non-Performance of Other Obligations.    The Parent, the Borrowers or any other Subsidiary defaults in the due
observance or performance of any other material agreement to be observed or performed by it, which default shall continue uncured for 30 days 

 
 10 

 
after written notice thereof specifying such default shall have been given to the Parent by the holder of this Note (or its agent); 
  
 (v)  Bankruptcy, Insolvency, etc.    The Parent or either Borrower: 
  
 (a)  becomes insolvent or admits in writing its inability to pay, its debts as they become due; 

 
 (b)  applies for, consents to, or acquiesces in, the appointment of a trustee, receiver, sequestrator
or other custodian for the Parent or Borrower, as applicable, or any of its property, or makes a general assignment for the benefit of creditors; 
  
 (c)  in the absence of such application, consents or acquiesces in, permits or suffers to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Parent or
Borrower, as applicable, or for any part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 30 days; or 
  
 (d)  permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Parent or Borrower, as applicable, and, if such case or proceeding is not commenced by the Parent or Borrower, as applicable, or converted to a
voluntary case, such case or proceeding shall be consented to or acquiesced in by the Parent or Borrower, as applicable, or shall result in the entry of an order for relief or shall remain for 30 days undismissed. 
  
 (vi)  Breach of Warranty.    Any representation or warranty of the Parent or
Borrowers contained in this Note or any of the other Principal Transaction Documents is or shall be incorrect in any material respect when made. 
  
 (vii)  Cross-Acceleration.    Any indebtedness for borrowed money of the Parent, the Borrowers or any other Subsidiary in an aggregate principal amount exceeding
$1,000,000 (a) shall be duly declared to be or shall become due and payable prior to the stated maturity thereof, or (b) shall not be paid as and when the same becomes due and payable, including any applicable grace period. 
  
 (viii)  Judgments.    A judgment or order for the payment of money is rendered
against the Parent, the Borrowers or any other Subsidiary which, together with all other such outstanding judgments against the Parent and its Subsidiaries (in each case to the extent not covered by insurance), exceeds an aggregate of $100,000, and
within 30 days after entry thereof, such judgment shall not have been vacated, discharged or otherwise satisfied or execution thereof stayed pending appeal, or, within 30 days after the expiration of any such stay, such judgment shall not have been
discharged or otherwise satisfied. 

 
 11 

  
 (ix)  Change of
Control.    There is a Change of Control (as defined herein). For purposes hereof, a “Change of Control” shall mean the occurrence of any of the following: (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as defined in Rule 13d promulgated under the Securities Exchange Act of 1934, as amended), other than the Payee, if in excess of 25% of the voting securities of the Parent, (b) the replacement
of more than one-half of the members of the Parent’s Board of Directors that is not approved by those individuals who are members of the Board of Directors on the date hereof, or successors on a continuing Board of Directors, in one or a series
of related transactions, (c) the merger of the Parent with or into another entity where the shareholders of the Parent own less than 50% of the outstanding voting power of the surviving corporation, (d) the consolidation or sale of all or
substantially all of the assets of the Parent in one or a series of related transactions, or (e) the execution by the Parent of an agreement providing for any of the foregoing events. 
  
 B.  Action if Bankruptcy.    If any Event of Default described in clauses (v)(a) through (d) of Section 5A shall occur, the outstanding
Principal Amount of this Note and all other obligations hereunder shall automatically be and become immediately due and payable, without notice or demand. 
  
 C.  Action if Other Event of Default.    If any Event of Default (other than any Event of Default described in clauses (v)(a) through (d) of Section 5A) shall occur
for any reason, whether voluntary or involuntary, and be continuing, the Payee may, upon written notice to the Parent, declare all or any portion of the outstanding Principal Amount of this Note, together with interest accrued thereon to be due and
payable and any or all other obligations hereunder to be due and payable, whereupon the full unpaid Principal Amount (or any portion thereof so demanded), such accrued interest and any and all other such obligations which shall be so declared due
and payable shall be and become immediately due and payable, without further notice, demand or presentment. 
  
 D.  Remedies.    In case any Event of Default shall occur and be continuing, the Payee may proceed to protect and enforce its rights by a proceeding seeking the specific performance of any
covenant or agreement contained in this Note or in aid of the exercise of any power granted in this Note or may proceed to enforce the payment of this Note or to enforce any other legal or equitable rights as such holder shall determine.

  
 6.  Conversion of Note. 
  
 A.  Optional Conversion.    In the event that the Borrowers fail to pay the Principal Amount and accrued interest on this Note when
due, the Payee shall have the right, at its option, at any time on or after January 1, 2004, to convert all or any portion of the outstanding Principal Amount of this Note into shares of Common Stock at a price equal to the Exercise Price, subject
to adjustment as provided in 6B below (the “Conversion Price”). 
  
 B.  Adjustment of
Conversion Price.    The Conversion Price in effect at any time and the number of shares of Common Stock issuable upon conversion of the Note shall be subject to adjustment from time to time upon the happening of certain
events as follows: 

 
 12 

  
 (i)  Dividends, Distributions, Subdivisions,
Combinations and Reclassifications.    In case the Parent shall (a) declare a dividend or make a distribution on its outstanding shares of Common Stock in shares of Common Stock, (b) subdivide or reclassify its outstanding
shares of Common Stock into a greater number of shares, or (c) combine or reclassify its outstanding shares of Common Stock into a smaller number of shares, the applicable Conversion Price in effect at the time of the record date for such dividend
or distribution or of the effective date of such subdivision, combination or reclassification shall be adjusted so that it shall equal the number of shares determined by multiplying the Conversion Price by a fraction the numerator of which shall be
the number of shares of Common Stock outstanding immediately prior to such action and the denominator of which shall be the number of shares of Common Stock outstanding after giving effect to such action. Such adjustment shall be made successively
whenever any event listed above shall occur. 
  
 (ii)  Issuance or Sale of Convertible
Securities.    If, at any time while this Note is outstanding, the Parent issues or sells, or is deemed to have issued or sold, any shares of Common Stock for a consideration per share less than the Conversion Price in effect
immediately prior to such issuance or sale, then immediately after such issuance or sale the Conversion Price then in effect shall be reduced to an amount equal to the consideration per share of Common Stock in such issuance or sale. If at any time
during which this Note is outstanding the Parent grants, issues or sells any rights, warrants or options for or to purchase Common Stock or any stock or other securities convertible into or exchangeable for Common Stock (collectively, the
“Convertible Securities”), and the price per share for which Common Stock is issuable upon the exercise or conversion of such Convertible Securities is less than the Conversion Price in effect immediately prior to such grant or
issuance, then the Conversion Price then in effect shall be reduced to an amount equal to the price per share for which the Common Stock is issuable upon exercise or conversion of such Convertible Security. Notwithstanding the foregoing, in the
event the Conversion Price is required to be reduced in accordance with this paragraph, if the aggregate number of shares of Common Stock issuable upon conversion of this Note would exceed the maximum number of shares of Common Stock which could be
issued without obtaining stockholder approval if and as required pursuant to Nasdaq Stock Market Rule 4350(i)(C) or (D), then, unless such stockholder approval shall have been obtained, the Conversion Price shall be reduced only to the extent that
the number of shares of Common Stock issuable upon conversion of the Note would not exceed such maximum number of shares of Common Stock which could be issued without obtaining stockholder approval. 
  
 (iii)  Reorganization of the Parent.    In case of any reclassification or capital
reorganization, or in case of any consolidation or merger of the Parent with or into another corporation (other than a merger with a subsidiary in which merger the Parent is the continuing corporation and which does not result in any
reclassification or capital reorganization) or in case of any sale, lease or conveyance to another corporation of the property of the Parent as an entirety, the Parent shall, as a condition precedent to such transaction, cause effective provisions
to be made so that the holder of this Note shall have the right thereafter upon conversion of this Note in accordance with the provisions of this Section 6, to purchase the kind and amount of shares of stock and other securities and property
receivable upon such reclassification, capital reorganization, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock which might have been received upon conversion of this 

 
 13 

 
Note immediately prior to such reclassification, consolidation, merger, sale or conveyance. Any such provision shall include provision for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Note. The Parent shall not effect any such consolidation, merger, sale, transfer or other disposition, unless prior to or simultaneously with the consummation thereof the successor corporation
(if other than the Parent) resulting from such consolidation or merger or the corporation purchasing or otherwise acquiring such properties shall assume, by written instrument executed and mailed or delivered to the holder of this Note at the last
address of such holder appearing on the books of the Parent, the obligation to deliver to such holder such shares of stock, securities, cash or properties as, in accordance with the foregoing provisions, such holder may be entitled to acquire. The
above provisions of this paragraph shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions. Nothing herein shall be construed as to require the consent of the holder to
any such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition. 
  
 (iv)  Other Events.    If any event occurs of the type contemplated by the provisions of this Section 6.B but not expressly provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights with equity features), the Parent’s Board of Directors shall make appropriate adjustment in the Conversion Price so at to protect the rights of the Payee or its
assigns. 
  
 (v)  Exceptions.    Notwithstanding anything to the
contrary contained herein, no adjustment shall be made to the Conversion Price in connection with the issuance, sale or grant of shares of: (A) Common Stock issued in connection with a stock option plan, (B) Common Stock issued in connection with
non-plan options granted to directors of the Parent, which shall not exceed 100,000 shares in the aggregate or (C) shares of Common Stock issued upon conversion of this Note. 
  
 C.  Mechanics of Conversion.    Before the Payee shall be entitled to convert this Note into Conversion Shares, the Payee shall
surrender the Note, duly endorsed, at the office of the Parent, and shall give written notice to the Parent at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or
certificates for the Conversion Shares are to be issued. The Parent shall, as soon as practicable thereafter, issue and deliver to the Payee, or to the nominee or nominees of Payee, a certificate or certificates for the number of Conversion Shares
to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the Note to be converted, and the person or persons entitled to
receive the Conversion Shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. 
  
 D.  Cash Payments.    No fractional shares (or scrip representing fractional shares) of Common Stock shall be issued upon conversion of
this Note. In the event that the conversion of the Principal Amount of this Note would result in the issuance of a fractional share of Common Stock, the Parent shall pay a cash adjustment in lieu of such fractional share to the holder of this Note
based upon the Conversion Price. Upon the surrender of this Note, accrued and unpaid interest on the Principal Amount of this Note shall be paid by the Parent to the holder of this Note through the Conversion Date. 

 
 14 

  
 E.  Stamp Taxes, etc.    The Parent shall
pay all documentary, stamp or other transactional taxes attributable to the issuance or delivery of shares of Common Stock upon conversion of this Note; provided, however, that the Parent shall not be required to pay any taxes which
may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in a name other than that of the holder of this Note. 
  
 F.  Validity of Stock.    All shares of Common Stock which may be issued upon conversion of this Note shall, upon issuance by the
Parent in accordance with the terms of this Note, be validly issued, free from all taxes and liens with respect to the issuance thereof (other than those created by the holders), and free from any pre-emptive or similar rights and shall be fully
paid and non-assessable. 
  
 G.  Reservation of Shares.    The Parent covenants
and agrees that it will at all times have authorized and reserved, solely for the purpose of such possible conversion, out of its authorized but unissued shares, a sufficient number of shares of its Common Stock to provide for the exercise in full
of the conversion rights contained in this Note. 
  
 H.  Notice of Certain
Transactions.    In case at any time: 
  
 (i)  The Parent shall
declare any dividend upon, or other distribution in respect of, its Common Stock; or 
  
 (ii)  The Parent shall offer for subscription to the holders of its Common Stock any additional shares of stock of any class or any other securities convertible into shares of stock or any rights to subscribe thereto; or

  
 (iii)  There shall be any capital reorganization or reclassification of the capital
stock of the Parent, or a sale of all or substantially all of the assets of the Parent, or a consolidation or merger of the Parent with another corporation; or 
  
 (iv)  There shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Parent; or 
  
 (v)  The Parent shall issue any shares of capital stock or any security convertible into or exercisable or
exchanged for shares of capital stock of the Parent, 
  
 then, in any one or more of said cases, the Parent shall cause to be mailed to the
registered holder of this Note at the earliest practicable time (and, in any event not less than 20 days before any record date or other date set for definitive action), written notice of the date on which the books of the Parent shall close or a
record shall be taken for such dividend, distribution or subscription rights or such reorganization, reclassification, sale, issuance, consolidation, merger or dissolution, liquidation or winding-up shall take place, as the case may be. Such notice
shall also set forth such facts as shall 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 kind and amount of the shares of stock and other securities and property
deliverable upon the conversion of this Note. Such notice shall also specify the date as of which the holders of the Common Stock of record shall participate in said dividend, distribution or subscription rights or shall be entitled to exchange

 
 15 

 
their Common Stock for securities or other property deliverable upon such reorganization, reclassification, sale, consolidation, merger or dissolution, liquidation or winding-up, as the case may
be. 
  
 7.  Amendments and Waivers. 
  
 A.  The provisions of this Note may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by
the Parent, the Borrowers and the Payee. 
  
 B.  No failure or delay on the part of the Payee in exercising
any power or right under this Note shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or
demand on the Parent or either Borrower in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by the Payee shall, except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. 
  
 C.  To the extent that the Borrowers make a payment or payments to the Payee, and such payment or payments or any part thereof are subsequently for any reason invalidated, set aside and/or
required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied,
and all rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 D.  After any waiver, amendment or supplement under this section becomes effective, the Parent shall mail to the holder of this Note a copy thereof. 

 
 8.  Miscellaneous 
  
 A.  Registered Holder.    The Parent and the Borrowers may consider and treat the person in whose name this Note shall be registered as the absolute owner thereof
for all purposes whatsoever (whether or not this Note shall be overdue) and the Parent and the Borrowers shall not be affected by any notice to the contrary. In case of transfer of this Note by operation of law, the transferee agrees to notify the
Parent of such transfer and of its address, and to submit appropriate evidence regarding such transfer so that this Note may be registered in the name of the transferee. This Note is transferable only on the books of the Parent or the Borrowers by
the holder hereof, in person or by attorney, on the surrender hereof, duly endorsed. Communications sent to any registered owner shall be effective as against all holders or transferees of the Note not registered at the time of sending the
communication. 
  
 B.  Governing Law.    This Note shall be governed by and
construed in accordance with the laws of the State of New York, without regard to its principles of conflicts of law. Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York shall apply to this Note and the Parent and
Borrowers hereby waive any right to stay or dismiss 

 
 16 

 
on the basis of forum non conveniens any action or proceeding brought before the courts of the State of New York sitting in New York County or of the United States of America
for the Southern District of New York and hereby submit to the jurisdiction of such courts. 
  
 C.  Notices.    Unless otherwise provided, all notices required or permitted under this Note shall be in writing and shall be deemed effectively given (i) on the day delivered or transmitted to
the party to be notified in the case of notices delivered by hand or by facsimile, (in the event confirmation is received) (ii) upon confirmed delivery by Federal Express or other nationally recognized courier service providing next-business-day
delivery, or (iii) three business days after deposit with the United States Postal Service, by registered or certified mail, postage prepaid and addressed to the party to be notified, in each case at the address set forth below, or at such other
address as such party may designate by written notice to the other party (provided that notice of change of address shall be effective upon receipt by the party to whom such notice is addressed). 
  

If sent to Payee, notices shall be sent to the following address: 
  
 The Philip S. Sassower 1996 Charitable Remainder Annuity Trust 
 c/o Mr. Philip Sassower 
 135 East 57th Street 
 New York, New York 10022 
 Tel: (212) 759-1909 
 Fax: (212) 319-4930 
  
 with a copy to: 
  
 Brown Raysman Millstein Felder & Steiner LLP 

900 Third Avenue 
 New York, New York
10022 
 Attn.: David M. Warburg, Esq. 
 Tel: (212) 895-2240 
 Fax: (212) 895-2900 
  
 If sent to the Parent or the Borrowers, notices shall be sent to the following address: 
  
 JLM Industries, Inc. 
 8675 Hidden River
Parkway 
 Tampa, FL 33637 
 Attn.: Chief Financial Officer 
 Tel.: (813) 632-3300 
 Fax: (813) 632-3301 
  
 D.  Waiver of Jury
Trial.    THE PAYEE, THE PARENT AND THE BORROWERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION 

 
 17 

 
WITH, THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS
OF THE PAYEE, THE PARENT OR THE BORROWERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE’S PURCHASING THIS NOTE. 
  
 E.  Expenses.    The Parent will pay (i) upon receipt of the proceeds of the loan represented by this Note (A) all out-of-pocket expenses of the Payee in connection with the preparation, execution
and delivery of the Principal Transaction Documents and related documents and agreements and the transactions contemplated hereby and thereby, including reasonable fees and disbursements of counsel to the Payee and (B) an additional $75,000 in
payment of past due amounts payable to counsel for the Payee in connection with prior legal services rendered to or for the benefit of the Parent, (ii) all out-of-pocket expenses in connection with the preparation, execution and delivery of any
waiver, amendment or consent by the Payee relating to this Note, including reasonable fees and disbursements of counsel to the Payee, and (iii) all costs of obtaining performance under any of the Principal Transaction Documents by the Parent and all
costs of collection in respect to this Note, which costs shall include reasonable counsel fees and expenses. 
  
 F.  Rights, Remedies Cumulative.    The rights and remedies of the Payee under the Principal Transaction Documents shall be cumulative and not exclusive of any rights or remedies which it would
otherwise have, and no failure or delay by the Payee in exercising any right shall operate as a waiver of it, nor shall any single or partial exercise of any power or right preclude its other or further exercise or the exercise of any other power or
right. 
  
  
 [Signatures Follow] 

 
 18 

  
 IN WITNESS WHEREOF, the Parent and the Borrowers have caused this Note to be
signed in their name by their duly authorized officers. 
  
  
 
	 JLM INDUSTRIES, INC.
  
 
	 
	 By:
 	 	 /s/    FORD PEARSON        

	  	 	 Ford Pearson
 Secretary
 

 
  
  
 
	 JLM REALTY, INC.
  
 
	 
	 By:
 	 	 /s/    FORD PEARSON        

	  	 	 Ford Pearson
 Secretary
 

 
  
  
 
	 JLM INDUSTRIES (SOUTH AFRICA)
 (PROPRIETARY) LIMITED
  
 
	 
	 By:
 	 	 /s/    FORD PEARSON        

	  	 	 Ford Pearson
 Secretary
 

 

 
 19Security Agreement and Guaranty, dated August 26

  
 EXHIBIT 10.2 
  
 SECURITY AGREEMENT AND GUARANTY 
  
 This
SECURITY AGREEMENT AND GUARANTY (“Agreement”) is entered into as of the 26th day of August, 2002 by and among JLM INDUSTRIES (SOUTH AFRICA) (PROPRIETARY) LIMITED (“JLM SA”), a company organized under the laws of
South Africa and a wholly-owned subsidiary of JLM Industries, Inc. (the “Parent”), JLM CHEMICALS, INC. (“JLM Chemicals,” and together with JLM SA, the “Debtors”), a Delaware corporation and a
wholly-owned subsidiary of the Parent, in favor of THE PHILIP S. SASSOWER 1996 CHARITABLE REMAINDER ANNUITY TRUST (the “Secured Party”). 
  
 All terms used herein but not defined herein shall have the meaning ascribed to them in the Uniform Commercial Code as in effect in the State of New York from time to time (the “UCC”).

  
 SECTION 1.  Guaranty of JLM Chemicals. 
  
 1.1  In consideration for the benefits conferred upon JLM Chemicals by, and as an inducement to, the Secured Party agreeing to
lend the sum of Two Million Dollars ($2,000,000) to JLM Realty, Inc., a North Carolina corporation and an affiliate of the Debtors (“JLM Realty”), and JLM SA pursuant to a Secured Promissory Note, dated of even date herewith by JLM
Realty and JLM SA (the “Note”), JLM Chemicals hereby guarantees (the “Guaranty”) unto Secured Party the full payment and performance by JLM Realty and JLM SA of the Secured Indebtedness (as defined in Section 2) and
agrees to pay any and all expenses incurred by the Secured Party in enforcing any rights under this Guaranty. 
  
 1.2  JLM Chemicals agrees that this Guaranty is and shall be construed to be absolute, general and continuing and shall not be terminated until performance in full of the Secured Indebtedness; provided, however, that
the Guaranty shall not be effective unless and until any consents of senior lenders of JLM Chemicals, the Debtors or the Parent under existing credit agreements that are required in order for JLM Chemicals to make the Guaranty are obtained,
whereupon the Guaranty shall be effective as of the date of this Agreement. 
  
 1.3  The liability of JLM
Chemicals on the Guaranty shall be its primary and direct liability and shall be enforceable without prior resort to any other right, remedy or security and enforceable concurrently and in addition to all available remedies against JLM Realty and
JLM SA for payment and performance under the Note. JLM Chemicals hereby waives presentment, protest, demand of any instrument, promptness, diligence, notice of acceptance and any other notice with respect to any of the Secured Indebtedness and this
Guaranty and any requirement that Secured Party exhaust any right or take any action against JLM Realty or the Debtors or any other person or entity or any collateral. The obligations and liability of JLM Chemicals hereunder shall not be subject to
any counterclaim, recoupment, set-off, reduction or defense based upon any claim that JLM Chemicals may have against Secured Party. 

 

  
 SECTION 2.  Creation of Security Interest.

  
 2.1  Grant of Security Interest.    (a) for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged: (i) JLM SA hereby grants to Secured Party a continuing, first priority security interest in and lien on (the “JLM SA Security Interest”) the JLM SA Collateral (as defined
in Section 3 hereof) of such Debtor, and (ii) JLM Chemicals, to the extent that JLM Chemicals receives the consent of its senior lenders required to grant the JLM Chemicals Security Interest, hereby grants to Secured Party a continuing, security
interest in and lien on (the “JLM Chemicals Security Interest,” and together with the JLM SA Security Interest, the “Security Interests”) the JLM Chemicals Collateral (as defined in Section 3 hereof) of such Debtor,
to secure performance and payment of (A) the Note; (B) all renewals and extensions of the Note; (C) all other obligations of the Debtors and JLM Realty under this Agreement and the Note; and (D) all other obligations and indebtedness of the Debtors
and JLM Realty to Secured Party of whatever kind and whenever or however created or incurred, whether absolute or contingent, matured or unmatured, direct or indirect (all of the foregoing described in this Section 1 being the “Secured
Indebtedness”). 
  
 (b)  The Security Interests granted herein shall continue in full force and
effect until all of the Secured Indebtedness has been discharged. 
  
 2.2  Priority.    The Secured Indebtedness shall be the senior obligation of JLM SA and the junior obligation of JLM Chemicals (subordinate only to its obligations to its senior lenders). The
Secured Indebtedness shall be secured by the Security Interests in the Collateral. 
  
 SECTION
3.  Definitions relating to Collateral.    As used herein, the following terms shall have the meanings indicated: 
  
 3.1  Collateral.    The term “Collateral” includes all of the JLM SA Collateral and all of the JLM Chemicals Collateral. 
  
 3.2  JLM SA Collateral.    The term “JLM SA Collateral” means all of JLM SA’s
right, title and interest in and to all tangible and intangible property, now owned or hereafter acquired by such Debtor, wherever located, whether real, personal or mixed. The JLM SA Collateral includes, without limitation, all goods (including all
Equipment, Inventory, vehicles, consumer goods and farm products), Fixtures, Accounts Receivable, other receivables, general intangibles, patents and patent applications, Trademarks, Licenses, Trade Secrets (each as hereinafter defined), service
marks, all other intellectual property, contract rights, rights to receive payments of every kind, all goodwill (including all goodwill associated with the Trademarks, Licenses, Trade Secrets, service marks and all other intellectual property
referred to above), documents, instruments and chattel paper, each as now owned or hereafter acquired by such Debtor, together with all proceeds of the foregoing, including without limitation, all proceeds of the foregoing consisting of goods and
intangible personal property. 
  
 3.3  JLM Chemicals Collateral.    The term
“JLM Chemicals Collateral” means all of JLM Chemicals’ right, title and interest in and to all Equipment, Inventory, Fixtures, vehicles, consumer goods and improvements, now owned or hereafter acquired by such Debtor, located
at the Debtor’s Blue Island, Illinois manufacturing facility having an address at 3350 

 
 2 

  
 West 131st Street, Blue Island, Illinois 60406 (the “Blue Island Plant”), together with
all proceeds of the foregoing. 
  
 3.4  “Trademarks” shall mean all of the following now
or hereafter owned by a Debtor: (i) all trademarks, service marks, trade names, corporate names, company names, indicia, business source identifiers, business names, fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Patent and Trademark Office (the “USPTO”) any State of the United States or any other country or
any political subdivision thereof, (ii) all goodwill associated therewith arising in or relating to the ordinary course of business of such Debtor, (iii) all extensions or renewals thereof, and (iv) the right to sue for past, present and future
infringement of the foregoing. 
  
 3.5  “License” shall mean any written agreement, now
executed or to be executed hereafter by a Debtor, granting to any third party any right to use any Patent or Trademark now or hereafter owned by a Debtor, or granting to a Debtor any right to use any Patent or Trademark now or hereafter owned by any
third party. 
  
 3.6  “Trade Secrets” shall mean all trade secrets and other confidential
or proprietary, technical or business information, now or hereinafter owned by a Debtor, as any of the foregoing may be amended or supplemented from time to time, and any improvements thereon or changes thereto. 
  
 SECTION 4.  Payment of Obligations of Debtors. 
  
 4.1  Direct Obligations.    JLM Realty and JLM SA (and to the extent not timely paid by JLM Realty
and JLM SA, JLM Chemicals) shall pay to Secured Party any sum or sums due or which may become due pursuant to the Note, or any extensions or renewals thereof, or under this Agreement or the Note. The Secured Indebtedness of the Debtors and JLM
Realty hereunder and pursuant to the Note are joint and several, regardless of which entity actually receives the proceeds of the loan represented by the Note, the manner in which such amounts are used and the value or nature of the Collateral used
to secure payment of the Secured Indebtedness. 
  
 4.2  Expenses.    Each Debtor
shall be liable to promptly pay to Secured Party on demand all expenses and expenditures, including reasonable attorneys’ fees and other legal expenses incurred or paid by Secured Party in exercising or protecting its interests, rights and
remedies under the Note or this Agreement plus interest thereon at the maximum non-usurious rate permitted by applicable law. Such expenses and expenditures shall be part of the Secured Indebtedness. 
  
 4.3  Acceleration.    Debtors shall pay immediately, without notice, the entire unpaid Secured
Indebtedness of any Debtor to Secured Party, whether created or incurred pursuant to this Agreement, the Note or otherwise, upon the occurrence of an Event of Default as 

 
 3 

  
 described in Section 5 of this Agreement and acceleration of said Secured Indebtedness as provided for
in the Note. 
  
 SECTION 5.  Debtors’ Representations, Warranties, Covenants and
Agreements. 
  
 The Debtors jointly and severally represent, warrant, covenant and agree that:

  
 5.1  Valid Accounts.    Each Account Receivable will represent the valid and
legally enforceable indebtedness of a bona fide customer (“Customer”) arising from the sale or lease of goods or rendition by JLM SA of services and will be subject to no set-offs, counterclaims or defenses; such goods
or services will have been delivered to or performed for, and accepted by, the Customer, and the amount shown as to each account on JLM SA’s books will be the true and undisputed amount owing and unpaid thereon, payable in full at the time
referred to in the invoice, or if no time is specified within at least ninety (90) days from the date of the particular invoice, and none of the Debtors has any knowledge of any fact or circumstance that would impair the validity or enforceability
of any Accounts Receivable. As used herein, the term “Accounts Receivable” shall mean all of JLM SA’s accounts, contract rights, chattel paper, instruments, general intangibles and rights to payment of every kind, now or at any
time hereafter arising. 
  
 5.2  Title; Authority.    (a) Except for the
Security Interest granted hereby and except for the security interests granted to Congress Financial Corporation and GATX Capital Corporation existing on the date of this Agreement (collectively, the “Permitted Liens”), each Debtor
is, and as to Collateral acquired after the date hereof shall be, the absolute owner and holder of, and has good and, with respect to real property, marketable, title to, the Collateral, free and clear of all liens, security interests, charges,
mortgages or encumbrances of any kind or nature whatsoever (collectively, “Liens”). All instruments, documents and chattel paper pertaining to the Accounts Receivable are or, with respect to Accounts Receivable arising after the
date hereof, will be, valid and genuine and free from all Liens, except for the Permitted Liens. 
  
 (b)  Each Debtor has full power and authority to grant to Secured Party the Security Interest granted herein, and the execution, delivery and performance of this Agreement is not in contravention of any charter or by-law
provision of such Debtor or the Parent, or of any indenture, contract or other agreement to which such Debtor or the Parent is a party or by which its properties or assets are bound. 
  
 5.3  Performance of Obligations.    JLM SA will duly perform and will cause to be performed all obligations with respect to the goods,
the sale or lease of which gave rise to each of the Accounts Receivable. 
  
 5.4  Information.    To the knowledge of Debtors, all information supplied and statements made by each Debtor, the Parent or any guarantor in any financial, credit or accounting statement or
application for credit prior to, contemporaneously with or subsequent to the execution of this Agreement are and shall be true, correct, complete, valid and genuine. 

 
 4 

  
 5.5  Place of Business; Records.    (a) The
chief place of business of each Debtor is the address shown on Exhibit A to this Agreement. Each Debtor will immediately notify Secured Party in writing of any change in such Debtor’s chief place of business.

  
 (b)  Each Debtor will (i) keep such books and records pertaining to the Collateral at such chief place
of business, and at such office or offices of each Debtor as shall be approved in writing by Secured Party; (ii) mark its books and records in such fashion as to indicate the Security Interest granted hereby; (iii) permit officers, employees, or
other representatives of Secured Party at all reasonable times to inspect the Collateral and inspect and make abstracts from the books and records of such Debtor pertaining to the Collateral; and (iv) furnish to Secured Party such reasonable
information and reports regarding the Collateral as Secured Party may from time to time require. 
  
 (c)  The Secured Party’s right to take possession of any Debtor’s books and records after the occurrence of and during an Event of Default shall be enforceable at law, by action of replevin or by any other
appropriate remedy at law or in equity and, to the extent permitted by law, each Debtor consents to the entry of judicial orders or injunctions enforcing such rights without any notice to such Debtor or opportunity to be heard. 

 
 5.6  Taxes.    Each Debtor will promptly pay any and all taxes, assessments and
governmental charges upon the Collateral prior to the date penalties are attached thereto, except to the extent otherwise permitted by Secured Party. 
  
 5.7  Notice to Customers.    Upon an Event of Default and upon Secured Party’s request, JLM SA will give such notice in writing as Secured Party may reasonably
require at any time to any or all Customers indebted on all or any of the Accounts Receivable and, if Secured Party shall so request, deliver to Secured Party copies of any and all such notices and, in addition Secured Party, or its agents or
representatives may (1) transmit to any or all Customers at any time or times such notice of Secured Party’s interest in any such Accounts Receivable as Secured Party may determine (but Secured Party shall not be required to give any such
notice and any failure to give such notice by Secured Party shall in no way affect Secured Party’s rights and interest hereunder or under any Accounts Receivable); (2) request from Customers at any time or times information concerning the
amount owing under any or all Accounts Receivable; (3) request from Customers that Accounts Receivable be paid directly to Secured Party or to a post office box address over which Secured Party has control; or (4) enforce payment of and collect, by
legal proceedings or otherwise, all Accounts Receivable. 
  
 5.8  Information to Secured Party Regarding
Collateral.    Each Debtor will transmit to Secured Party all information that it may have or receive with respect to the Collateral or with respect to Customers indebted on the Accounts Receivable which might in any way
adversely affect the value of the Collateral or Secured Party’s rights or remedies with respect thereto, including, but not limited to (i) rejection of goods or services by a Customer, (ii) assertion of claims, counterclaims or set-offs by a
Customer, and (iii) information of financial difficulties of a Customer of which such Debtor has or obtains knowledge. 
  
 5.9  No Additional Security Interests or Liens.    No Debtor will pledge, mortgage or otherwise encumber, or create or suffer a security interest or Lien to exist in any of 

 
 5 

  
 the Collateral to or in favor of any person other than Secured Party, except as otherwise authorized
pursuant to this Agreement or the Note and except for the Permitted Liens. Each Debtor will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein senior or pari passu
to that of Secured Party. 
  
 5.10  Additional Documentation.    Each Debtor
will execute, alone or with Secured Party, any financing statement (or with respect to JLM SA, any equivalent document under South Africa law) or other document or procure any document reasonably required, and pay all costs necessary or desirable to
protect the Security Interest, rights and remedies created by, provided in or emanating from this Agreement. Each Debtor shall use its best efforts to furnish to Secured Party, if requested, a landlord’s waiver of all liens with respect to any
Collateral covered by this Agreement that is or that may be located upon leased premises. Such landlord’s waiver is to be in such form and upon such terms as is acceptable to Secured Party. 
  

5.11  Protective Action; Further Assurances.    Each Debtor will, at its own expense, do, make, procure, execute and deliver all
acts, things, writing and assurances as Secured Party may at any time reasonably request to protect, assure or enforce its interests, rights and remedies created by, provided in or emanating from this Agreement. The Parent shall use its best efforts
to procure any consent of senior lenders of JLM Chemicals, the Debtors or the Parent under existing credit agreements that are required in order for the Debtors to grant the Security Interests. 
  

5.12  No Leases, Licenses or Encumbrances.    None of the Debtors will lend, rent, lease, license or otherwise dispose of its
respective Collateral or any interest therein except as authorized in this Agreement or in writing by Secured Party or in the ordinary course of Debtor’s business consistent with past practices, and each Debtor shall keep its respective
Collateral, including the proceeds from any disposition thereof, free from unpaid charges, including taxes, and from all Liens other than Permitted Liens. 
  
 5.13  Collateral Locations.    The Collateral shall remain in the respective Debtor’s possession or control at its address shown in this Agreement or at such
other locations as Secured Party may approve in writing, and shall not be removed except for temporary removal in the ordinary course of Debtor’s business from those locations. 
  
 5.14  Insurance.    Each Debtor will have and maintain or cause to be maintained insurance at all times with respect to its respective
Collateral against risks of fire, theft and such other risks as Secured Party may reasonably require. Such insurance policies shall contain such terms and be written by companies reasonably satisfactory to Secured Party. To the extent that the such
insurance covers Collateral that secures a senior obligation of a Debtor to the Secured Party, such insurance policies shall also, if requested by Secured Party (i) contain a standard mortgagee’s endorsement providing for payment of any loss to
Secured Party; (ii) provide for a minimum of thirty (30) days written cancellation notice to Secured Party; and (iii) be furnished to Secured Party with certificates or other evidence satisfactory to Secured Party of compliance with the foregoing
insurance provisions. 

 
 6 

  
 5.15  Accounts as Proceeds.    All accounts
that are proceeds of the inventory included within the Collateral shall be subject to the Security Interest granted hereby and all of the other terms and provisions hereof. 
  
 5.16  Certificates of Title.    If certificates of title or similar documents are issued or outstanding or become issued and
outstanding with respect to any of the Collateral, each Debtor will promptly advise Secured Party thereof and will immediately cause the interest of Secured Party to be properly noted thereon and said certificates are to be delivered to Secured
Party. 
  
 5.17  Business Use.    The Collateral is and will be used for the
sole purpose of conducting the respective Debtor’s business in the ordinary course, unless otherwise agreed to in writing by Secured Party. 
  
 5.18  No Misuse; Duty to Maintain.    The Collateral will not be misused or abused, wasted or allowed to deteriorate, except for the ordinary wear and tear of its
intended primary use, and will not be used in violation of any statute, regulation or ordinance. Each Debtor agrees to maintain and use the Collateral in a careful and proper manner and in conformity with all applicable statutes, laws, ordinances
and regulations and with all permits and licenses. None of the Debtors will use the Collateral in any manner which exposes the Collateral to unusual risk or to penalty, forfeiture or capture. Each Debtor shall maintain, service and repair the
Collateral so as to keep the Collateral in good operating condition. 
  
 5.19  Collateral Affixed to
Real Estate.    If the Collateral is or is to be wholly or partly affixed to real estate or other goods, a description of the real estate or other goods shall be promptly delivered to Secured Party and become a part of this
Agreement, and shall specify the location and record owner of such real estate or other goods. If requested by Secured Party, each Debtor shall use its best efforts to furnish disclaimers or waivers of all parties having an interest in the real
estate or other goods to which the Collateral is or is to be attached to any interest in the Collateral. 
  
 5.20  No Financing Statements.    Except for the Permitted Liens, there is no financing statement or similar filing now on file in any public office covering any part of the Collateral which has
not been discharged nor is there any filing with the USPTO for the purpose of perfecting, confirming, continuing, enforcing or protecting any security interest granted by any Debtor in the Collateral, and none of the Debtors will execute and there
will not be on file in any public office any financing statement or similar filing, except the financing statements filed or to be filed in favor of Secured Party, or as otherwise specifically permitted by this Agreement. 
  
 5.21  Patents and Trademarks.    (a) Each Debtor (either itself or through licensees) will, for each
Trademark material to the conduct of such Debtor’s business, (i) to the extent consistent with past practice, continue to use such Trademark on each and every trademark class of goods applicable to its current line of business in order to
maintain such Trademark in full force free from any claim of abandonment for nonuse, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) employ such Trademark with the notice of Federal registration,
and (iv) not (and not permit any licensee or 

 
 7 

  
 sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark may become
abandoned or invalidated. 
  
 (b)  In no event shall any Debtor, either itself or through any agent,
employee, licensee or designee, file an application for any patent or Trademark with the USPTO, or any similar office or agency in any other country or any political subdivision thereof or enter into a License, unless it promptly informs Secured
Party, and, upon request of Secured Party, executes and delivers any and all agreements, instruments, documents and papers as Secured Party may reasonably request to evidence Secured Party’s security interest in such patent, Trademark or
License, and the goodwill and general intangibles of such Debtor relating thereto or represented thereby. 
  
 (c)  Each Debtor will take all necessary steps that are consistent with the practice in any proceeding before the USPTO, or any similar office or agency in any other country or any political subdivision thereof, to maintain
and pursue each material application relating to any patent or Trademark (and to obtain the relevant grant or registration) and to maintain each registration of any patent or Trademark which is material to the conduct of such Debtor’s business,
including, without limitation, filing of application for renewal, affidavits of use, affidavits of incontestability and maintenance fees, and, where appropriate, to initiate opposition, interference and cancellation proceedings against third
parties. 
  
 (d)  In the event that any Collateral consisting of a patent or Trademark material to the
conduct of any Debtor’s business is believed infringed, misappropriated or diluted by a third party, such Debtor shall notify Secured Party in writing within fifteen (15) days after it learns thereof and shall, if consistent with good business
practice, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as is appropriate under the circumstances to protect such
Collateral. 
  
 SECTION 6.  Events of Default 
  
 Each Debtor shall be in default under this Agreement upon the happening of an Event of Default under the terms and conditions of the Note
(herein called an “Event of Default”). 
  
 SECTION 7.  Secured
Party’s Rights and Remedies 
  
 7.1  Secured Party’s Rights. 
  
 (a)  This Agreement, Secured Party’s rights hereunder or the Secured Indebtedness may be assigned by Secured Party, at any
time and from time to time, and in any such case the assignee shall be entitled to all of the rights, privileges and remedies granted in this Agreement to Secured Party; provided, however, that prior to the time an Event of Default has
occurred, Secured Party shall not make any such assignment to any party in the same or similar business to that of any Debtor. 
  
 (b)  Subject to the rights of senior lenders, each Debtor hereby appoints the Secured Party as its true and lawful attorney, with full power of substitution, for the purpose of carrying out the provisions of this Agreement
and taking any action and executing any 

 
 8 

  
 instrument which Secured Party may deem necessary or advisable to accomplish the purposes hereof. The
power of attorney granted herein shall be deemed to be coupled with an interest, shall be irrevocable, shall survive any reorganization, consolidation, merger, sale, dissolution, liquidation or other termination of such Debtor, shall be binding upon
all heirs, legal representatives, successors and assigns of such Debtor, and shall inure to the benefit of Secured Party and its successors and assigns. If an Event of Default shall occur, without limiting the generality of the foregoing, Secured
Party shall have the right to receive, collect and endorse all checks made payable to any Debtor or its order representing any proceeds in respect of the Collateral or any part thereof and to give full discharge therefor. If an Event of Default
shall occur, Secured Party may, but is not obligated to, exercise at any time and from time to time all or any of the rights of any Debtor including, but not limited to, the following powers, with respect to all or any of the Collateral:

  
 (i)  to demand, sue for, collect, receive and give acquittance for any and all monies
due or to become due upon or by virtue thereof; 
  
 (ii)  to receive, take, endorse, assign
and deliver any and all checks, notes, drafts, documents and other negotiable and non-negotiable instruments and chattel paper taken or received by Secured Party in connection therewith; 
  
 (iii)  to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto; 
  
 (iv)  to sell, transfer, assign or otherwise deal in or with the same or the proceeds or avails thereof or the
relative goods, as fully and effectually as if Secured Party were the absolute owner thereof; and 
  
 (v)  to extend the time of payment of any or all thereof and to make any allowance and other adjustments with reference thereto, including without limitation, arrangement for payment in installments, other modifications of
the payment terms thereof, or release thereof; 
  
 provided, however, that the exercise by Secured Party of or failure to so
exercise any such authority shall in no manner affect or discharge any Debtor’s liability to Secured Party hereunder or under the Note or under any other instrument evidencing or securing any of the Secured Indebtedness; provided,
further, Secured Party shall be under no obligation, responsibility or duty to exercise any of the powers hereby conferred upon it and it shall be without liability for any act or failure to act in connection with any of the Collateral.
Secured Party shall not be required to take any steps necessary to preserve the rights of the Collateral, except as required by law. If an Event of Default shall occur, Secured Party shall at all times have the right to apply the proceeds of any of
the accounts or other property in which Secured Party has been granted a Security Interest herein towards payment of the Note and other Secured Indebtedness immediately upon receipt or collection of such proceeds. 
  
 (c)  Secured Party or any of its employees, agents or representatives may enter upon any Debtor’s premises at any
reasonable time to inspect such Debtor’s records pertaining to the Collateral and Debtor shall assist such parties in making such inspections. 

 
 9 

  
 (d)  Secured Party may execute, sign, endorse, transfer or deliver in
the name of any Debtor notes, checks, drafts or other instruments for the payment of money and receipts, certificates of origin, applications for certificates of title or any other documents necessary to evidence, perfect or realize upon the
security interest and obligations created by this Agreement. 
  
 7.2  Rights in Event of
Default.  (a)  Subject to the rights of senior lenders and upon the occurrence and during the continuance of an Event of Default, in addition to the rights granted pursuant to Section 7.1, the Secured Party may, without
notice to any Debtor (except as otherwise specified herein), do any or all of the following, all of which rights and remedies are cumulative, and the exercise of any one or more of the remedies provided for herein shall not be construed as a waiver
of any of the other remedies of Secured Party: 
  
 (i)  Secured Party may declare the
Secured Indebtedness immediately due and payable and may exercise any of the rights and remedies available to a secured party under the UCC or otherwise available to Secured Party by agreement, at law or in equity, and under all other applicable
laws of each state having jurisdiction over the Collateral or any part thereof, including without limitation thereto, the right to sell, lease or otherwise dispose of any or all of the Collateral and the right to take possession of the Collateral,
and for that purpose Secured Party may, with or without notice or process of any kind, enter upon any premises on which the Collateral or any part thereof may be situated and remove the Collateral or books and records evidencing same, or may require
any Debtor to assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties. Unless the Collateral is perishable or threatens to decline speedily in value
or is of a type customarily sold on a recognized market, Secured Party will send each Debtor reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or other disposition thereof is to be made.
The requirement of sending reasonable notice shall be met if such notice is mailed, postage prepaid, to such Debtor at the address designated in this Agreement at least ten (10) days before the time of the sale or disposition. Expenses of retaking,
holding, preparing for sale, selling or the like shall include Secured Party’s reasonable attorneys’ fees and legal expenses, plus interest thereon at the maximum non-usurious rate permitted by applicable law with respect to such Debtor
and shall constitute part of the Secured Indebtedness. Secured Party may apply the proceeds of any disposition of Collateral available for satisfaction of the Secured Indebtedness in any order of preference which Secured Party, in its sole
discretion, chooses. Each Debtor shall remain liable for any deficiency. 
  
 (ii)  Secured
Party may retain all books and records of any Debtor. 
  
 (iii)  Secured Party may complete
any uncompleted Inventory in the process of construction or completion. 
  
 (iv)  Secured
Party may notify any of Debtor’s lessees, consignees, renters and/or debtors to make all payments directly to the Secured Party and to surrender, at the termination of any such lease, rental agreement or consignment, the item or items leased,
rented or consigned, directly to the Secured Party. 

 
 10 

  
 (v)  Secured Party may cure any default in any
reasonable manner and add the cost of such cure to the Secured Indebtedness. 
  
 (b)  Upon the occurrence
and during the continuance of an Event of Default, Secured Party may remedy any default and may waive any default without waiving the default remedied or without waiving any other prior or subsequent default. 
  
 (c)  Upon the occurrence and during the continuance of an Event of Default, Secured Party may enforce its rights under this
Agreement without resort to prior judicial process or judicial hearing, and each Debtor expressly waives, renounces and knowingly relinquishes any legal right which might otherwise require Secured Party to enforce its rights by judicial process. In
so providing for a non-judicial remedy, each Debtor recognizes and concedes that such a remedy is consistent with the usage of the trade, is responsive to commercial necessity and is the result of bargaining at arms length. Nothing in this Agreement
is intended to prevent any Debtor or the Secured Party from resorting to judicial process at such party’s option. 
  
 (d)  Each Debtor agrees that in performing any act required of such Debtor under this Agreement that time shall be of the essence and that Secured Party’s acceptance of a partial or delinquent payment or payments, or
the failure of Secured Party to exercise any right or remedy shall not be a waiver of any obligation of any Debtor or any right of Secured Party or constitute a waiver of any other similar default subsequently occurring. 
  
 (e)    Upon the occurrence and during the continuance of an Event of Default, Secured Party may at any time demand,
sue for, collect or make any compromise or settlement with reference to the Collateral as Secured Party, in its sole discretion, chooses. Secured Party may delay exercising or omit to exercise any right or remedy under this Agreement without waiving
that or any other past, present or future right or remedy, except in writing signed by Secured Party. 
  
 SECTION 8.  Additional Agreements 
  
 8.1  Successors
and Assigns.    Subject to the provisions of Section 7.1(a), this Agreement shall be binding upon and shall inure to the benefit of the parties, their successors, endorsers, representatives, receivers, trustees and assigns;
provided, however, that nothing contained herein shall be construed to permit any Debtor to assign this Agreement or any of its rights or obligations hereunder, without obtaining the prior written approval of the Secured Party.

  
 8.2  Waiver and Indemnity.    Each Debtor hereby waives and releases all
relief from any and all appraisement, stay or exemption laws of any state now in force or hereinafter enacted. Each Debtor hereby waives presentment, notice of dishonor and protest of all instruments included in or evidencing the Collateral and any
and all notices and demand whatsoever, whether or not relating to such instruments. 
  
 8.3  Section
Headings.    The section headings appearing in this instrument have been inserted for convenience only and shall be given no substantive meaning or significance whatever in construing the terms and provisions of this
instrument. 

 
 11 

  
 8.4  Applicable Law.    The law governing
this secured transaction shall be that of the State of New York in force at the date of this instrument, without regard to its principles of conflicts of law. 
  
 8.5  Notices.    All notices, requests, demands and other communications required or permitted hereunder shall be in writing and may be personally served or sent by
telecopier, mail or the express mail service of the United States Postal Service, Federal Express or other equivalent overnight or expedited delivery service and (i) if given by personal service, or telecopier (confirmed by telephone), it shall be
deemed to have been given upon receipt, (ii) if sent by mail, it shall be deemed to have been given upon receipt and (iii) if sent by Federal Express, the Express Mail Service of the United States Postal Service or other equivalent overnight or
expedited delivery service, it shall be deemed given twenty-four (24) hours after delivery to such overnight or expedited delivery service, delivery charges prepaid and properly addressed to Debtor or Secured Party as the case may be. For purposes
hereof, the addresses of each Debtor shall be its respective address set forth on Exhibit A and the address of Secured Party shall be as follows: 
  
 The Philip S. Sassower 1996 Charitable Remainder Annuity Trust  
 c/o Philip S. Sassower 
 135 East 57th Street 
 New York, New York 10022 
 Tel: (212) 759-1909

 Fax: (212) 319-4930 
  
 with a copy to: 
  
 Brown Raysman Millstein Felder & Steiner LLP

 900 Third Avenue 
 New
York, NY 10022 
 Attn: David M. Warburg, Esq. 
 Tel: (212) 895-2240 
 Fax: (212) 895-2900 
  
 Any party may, by proper written notice hereunder to the other party, change the address to which notices shall thereafter be sent to it. 
  
 8.6  Severability.    If any provision of this Agreement is held to be illegal, invalid, or unenforceable, such provision shall be
fully severable, and the remaining provisions of this Agreement shall be in full force and effect. 
  
 8.7  Savings Clause.    Notwithstanding any provision to the contrary herein, or in any of the documents evidencing the Secured Indebtedness, no such provision shall require the payment or permit
the collection of interest in excess of the maximum permitted by applicable usury laws. If any such excessive interest is so provided for, then in such event (i) the provisions of this paragraph shall govern and control, (ii) none of the Debtors nor
their representatives, successors or assigns or any other party liable for the payment thereof, shall be obligated to pay the amount of such interest to the extent that is in excess of the maximum non-usurious interest 

 
 12 

  
 rate permitted by applicable law, (iii) any such excess interest that may have been collected shall be,
at the option of the holder of the instrument evidencing the Secured Indebtedness, either applied as a credit against the then unpaid principal amount thereof or refunded to the maker thereof, and (iv) the effective rate of interest shall be
automatically reduced to the maximum non-usurious interest rate permitted under the applicable usury laws as now or hereafter construed by courts having jurisdiction. 
  
 8.8  Pronouns.    The pronouns used in this instrument are in the masculine gender but shall be construed as feminine or neuter as
occasions may require. 
  
 8.9  Entire Agreement.    This Agreement, the Note
and the Deed of Trust of even date herewith of JLM Realty in favor of the Secured Party constitute the entire understanding of the parties with respect to the subject matter hereof. 
  
 EXECUTED as of the date set forth above. 
  
 
	 DEBTORS:
  
 JLM INDUSTRIES (SOUTH AFRICA)
(PROPRIETARY) LIMITED
 
	 
	 By:
 	 	 /s/    MICHAEL MOLINA
        
 

	  	 	 Michael Molina
 Chief Financial
Officer
 

 
 
	  
 JLM CHEMICALS, INC.
 
	 
	 By:
 	 	 /s/    MICHAEL
MOLINA        
 

	  	 	 Michael Molina
 Chief Financial
Officer
 

 
 
	  
 SECURED PARTY:
  
 THE PHILIP S. SASSOWER 1996 CHARITABLE REMAINDER ANNUITY
TRUST
 
	 
	 By:
 	 	 /s/    PHILIP S.
SASSOWER        
 

	  	 	 Philip S. Sassower
 Trustee
 

 
  

 
 13 

  
 EXHIBIT A 
  
 DEBTORS’ PRINCIPAL PLACE OF BUSINESS 
  
 JLM Chemicals, Inc. 
 3350 West 131st Street 
 Blue Island, Illinois 60406 
  
 JLM Industries
(South Africa) (Pty) Ltd 
 Building 3, 
 Harrowdene Office Park 
 Western Service Rd. 
 Woodmead 
 South Africa

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