CONFIDENTIAL

“Technology and Innovation in the use of Micronized Rubber Powder in today’s Green World”

11 April, 2013 CONFIDENTIAL

• Setting the Stage and What we are Learning

• Who is Lehigh Technologies

• Technical Presentation

• What Does it All Mean in Terms of Green?

1 | Lehigh Technologies Inc. Millions of End-of-Life Tires Generated Each Year

Energy Recovery Civil Engineering Landfill Stockpiled Data Not Available

292 250 112 80 30

2 | Lehigh Technologies Inc. 2

CONFIDENTIAL The First Chemical Revolution

1800s 1850-1900 1900-1930

dyes/pigments oil and gas cracking/refining discoveries metals synthetic chemistry carbohydrates soaps atomic theory and the chemical bond

3 | Lehigh Technologies Inc. 3 The World Today – 3 Challenges

4lbs /person/day oil prices over $80 world population and spiking to 7B people >$100/bbl over 200 million tons per year 1 billion in the borrow-buy-burn developed world is US energy consume as much strategy energy as the other 6B.

4 | Lehigh Technologies Inc. 4 The Second Chemical Revolution

Bury or burn is not a solution infinite cycles of Vast resource pools available use • Huge technology challenge • • sustainable Must be waste based. production of Amyris, Kior, Renmatix, Genomatica building blocks • Small companies leading • • efficient use of Principles of Green Chemistry existing carbon Chemical companies leading sources • •

5 | Lehigh Technologies Inc. 5 Micronized Rubber Powder Industry – Lehigh Experience

 Image of industry:  Reliability of supply-process safety; quality  Scale-not capable of supporting global applications  Capitalization  “Tried it 15 years ago – didn’t work”  Absence of technical knowledge:  No shortage of conjecture  Very little data-insufficient experimental rigor  Potential customers “ on their own”  No technical knowledge = no adoption  Long sales cycles:  All performance markets have long development cycles-testing, optimization, re- testing, production trials, optimization-launch-that’s why stuff works!  All markets need foundational knowledge and technical support-customers rarely have sufficient resources to do this-mindset matters.

6 | Lehigh Technologies Inc. 6 Infinite Uses – The Next Steps

 Change in mindset:  Move from “getting rid of waste material” to “supplier of specialty materials”.  Good science and technical support drive adoption.  This changes the way everything is done.  Raw material type and structure:  Different rubber compositions and tire components behave differently in complex formulations-tire compounds, asphalt systems, plastics etc.  Only limited ability to provide discrete raw materials for specific uses.  This requires “demand” and “capability”.  History suggests that the value proposition enables adoption not subsidies:  Chemical building blocks have always delivered performance at economic cost  No customer pays more unless the material delivers more  Bio-based feedstocks, solar cells etc are burdened with this issue  We must drive to provide value and performance-

7 | Lehigh Technologies Inc. 7 Lehigh Technologies: Overview

Key Facts  Headquartered in Tucker, GA  Founded in 2003  75 employees  Blue Chip Investors: Third Party Tire Recycler

Tires

Asphalt Proven Technology Plastics  +140 million tires manufactured utilizing Lehigh’s PolyDyne™ Coatings  45,000MT of annual manufacturing Sealers capacity Others  5 out of top 10 tire manufacturers companies are Lehigh customers Lehigh Technologies is a technology driven green materials  Up-cycle post-consumer scrap manufacturer that turns end-of-life tires and other post-industrial rubber into sustainable powders that are used in a wide range of  ISO 14001 / 9001 Certified high-value industrial and consumer applications.  PolyDyne / MicroDyne

Lehigh Technologies Particle Sizes Range from 40 to 300 Mesh – Clean: Metal & Fiber Free

40 Mesh / 400 µ 80 Mesh / 180 µ 140 Mesh / 105 µ

PolyDyne 40 PolyDyne 80 PolyDyne 140

200 Mesh / 75 µ 300 Mesh / 50 µ

PolyDyne 200 PolyDyne 300

Expanded Product-Line to Include EPDM, Nitrile, Butyl & Natural Rubber Powders in Certain Sizes

9 | Lehigh Technologies Inc. 9

CONFIDENTIAL CONFIDENTIAL

Optimization of Rubber Compounds: Incorporating Sustainable, Micronized Rubber Powders Agenda

 Introduction  Experimental  Results and Discussion . Addition Point of Micronized Rubber Powder (MRP) . Sulfur-Accelerator Optimization . Particle Sizes  Summary of Findings and Recommendations

11 Introduction  The status of End-of-Life Tires1 The need for the work . On a global basis each year, one . The rubber rheological and billion tires become unusable physical properties are adversely and are classified as end-of-life. affected when MRP is added to  In the European Union, the the mix practice of land filling tires was  banned in 2006. Cure rate and viscosity increases  . There is much work yet to be General physical property decline done worldwide to encourage Reduced performance in abrasion, higher heat build-up and and teach rubber article compression set, and increased producers ways to incorporate hysteresis more micronized rubber . powder, MRP, into new rubber Many rubber article products. manufacturers do not modify their base recipes when incorporating MRP.

1. ETRMA source document

12 Introduction  Many researchers have offered explanations for the reported losses in rheological and physical properties when incorporating MRP into new rubber 1-9 . MRP particles in new cured rubber are discontinuities and act like stress-raising flaws.4 . Scanning electron microscope (SEM) photographs showing improper bonding of MRP to the new rubber matrix.6 . The decreased modulus is caused by sulfur in the new rubber matrix migrating into the MRP causing a lower cross-link density in the final product.2,3,9 . The shorter scorch times and faster cure rates which are explained by the migration of accelerator fragments from the MRP into the new rubber matrix.3 . Trouser tear resistance actually improves slightly and this effect was explained by the theory of crack tip blunting.4 . Reviews and summaries were presented previously by this author elsewhere.7,8

1. D. Gibala, K. Laohapisitpanich, D. Thomas, G. R. Hamed, Rubber Chem. Technol. 69, 115(1996) 2. R. A. Swor, L. W. Jensen, M. Budzol, Rubber Chem. Technol. 53, 1215(1980) 3. D. Gibala, G. R. Hamed, Rubber Chem. Technol. 67, 636(1994) 4. D. Gibala, D. Thomas, G. R. Hamed, Rubber Chem. Technol. 72, 357(1999) 5. M. D. Burgoyne, G. R. Leaker, Z. Krekic, Rubber Chem. Technol. 49, 375(1976) 6. A. A. Phadke, S. K. Chakraborty, S. K. De, Rubber Chem. Technol. 57, 19(1984) 7. F. Papp, Technical Challenges for the Recycled Rubber Industry. Presented at the ITEC2010, Cleveland, Ohio, September 21-23, 2010 8. F. Papp, Optimization the Use of Micronized Rubber Powder, presented at a meeting of the Rubber Division, American Chemical Society, Cleveland, Ohio, October 11-13, 2011 9. Z. I. Grebenkina, N. D. Zakharov, and E. G. Volkova, International Polymer Science and Technology 5, No. 11, 2 (1978) 13 Experimental – Base Compound

Addition Base Compound Ingredients Sequence PHR First Pass ESBR1500 (Non-oil extended) 70.00 First Pass High Cis Polybutadiene Rubber 30.00 First Pass Micronized Rubber Powder (MRP) From Whole Tire As Per Studies First Pass N339 Carbon Black 65.00 First Pass Heavy Naphthenic Process Oil 25.00 First Pass Homogenizing Agent 1.00 First Pass Alkyl Phenol Formaldehyde Novolak Tack Resin 3.00 First Pass 6PPD Antidegradant 2.50 First Pass TMQ Antidegradant 1.50 First Pass Microcrystalline and Paraffin Wax Blend 2.50 First Pass Zinc Oxide Dispersion (85% ZnO) 3.53 First Pass Stearic Acid 2.00 Finish Pass TBBS Accelerator 1.00 Finish Pass Sulfur Dispersion (80% Sulfur) 2.50 Finish Pass Retarder N-(cyclohexylthio) phthalimide 0.10 Total PHR Finish Batch 209.63 Density kg/l 1.126

14 Experimental Procedure

 All mixes were performed in a 1.6L  MDR2000 Rheometer ASTM D 5289 Farrel Banbury internal mixer. @ 160°C . Mixing was conducted either as a two  Tensile, Elongation, Modulus ASTM D or three pass mix 412, unaged & oven aged  Milling was performed on a KSB 2-  Trouser tear resistance, ASTM D 624 roll mill 33 cm x 15 cm. T, unaged & oven aged   In all studies for each operation, Hardness tested with Rex Digital weighing, mixing, curing, and Durometer, ASTM D 2240 Type A on testing, a unique randomized rebound specimens sequence was employed to reduce  BF Goodrich Flexometer ASTM D 623, or eliminate bias scatter of the data. Method A  Some of the experimental designs  Zwick Rebound ASTM D 7121 used replication of batches, and  Zwick Rotary Drum Abrader ASTM D some of the designs with replicated 5963, Method A batches used a procedure of blending the master batches for  Static Outdoor Exposure (20% Strain) reducing variation. ASTM D 518, Method A

15 Introduction

MDR Rheometer 160°C Tread with 177 Micron RRP Normalized Physical Properties of Tread Normalized Time to Stated Property with 177 Micron MRP 120 120 100 100 80

80

60 60 Percent Percent

40 40

20 20

0 0 Control 3% 6% 9% 12% Control 3% 6% 9% 12%

Control Scorch Ts1 T10 T90 Control Tensile Strength 300% Modulus Elongation @ Break

Flexometer Heat Build-Up and Compression Set Normalized Abrasion Resistance Index and Rebound Tread with 177 Micron MRP @ 60°C Tread with 177 Micron MRP 200 180 120 160 100 140

120 80

100 60

Percent 80 Percent 60 40 40 20 20 0 0 Control 3% 6% 9% 12% Control 3% 6% 9% 12% 16 Control HBU Comp Set Control AR Index Rebound 60°C Addition Point of MRP  Which addition point in the mix for the MRP gives better physical properties?

. In the first master pass with the following  Polymers  Carbon black  Chemicals

. In the finish pass with curatives  Take advantage of any remaining bonding capability?1

Mix Procedure Mix Pass First Pass Second Pass Finish Pass Mix Time 0 1 2 4 6 5 2 Material BMB ½ CB ½ CB Chemicals Stop Remill Curatives Addition Polymers ½ MRP ½ MRP MRP Mixer In mixer MRP MRP Oil

1. Private conversations and data. 17 Addition Point Test Results Normalized Basic Physical Properties Normalized Basic Physical Properties 177 µm MRP @ 10% 300 µm MRP @ 10%

120 120 100 100 99 94 92 96 100 91 100 89 87 84 81 82 78 81 77 75 80 80 71

60 60 Percent Percent 40 40 20 20 0 0 Control 300 µm MRP 10% 300 µm MRP 10% 300 µm MRP 10% Control 177 µm MRP 10% w/CB 177 µm MRP 10% w/Fin w/P w/CB w/CH

Tensile E@B 300M Tensile E@B 300M

Results of the addition point in the mix for the MRP . Earlier in the first pass for optimum tensile and modulus . Later in the first pass mix for optimum elasticity

18 Sulfur-Accelerator Optimization  The study design used the base recipe shown earlier in a two pass mix version  The 177 µm MRP from whole tire was used from 2% to 14% by weight loading  Sulfur loading from 1.5 phr to 4.0 phr  TBBS loading from 0.2 phr to 1.4 phr  The DOE used was a central composite design, response surface method, with the aid of Design Expert® software published by Stat-Ease, Inc.

19 Performance From Actual Mix

177 Micron MRP 10% Loading Sulfur Optimization Actual Data 300%M 120 Comp Set Hardness RT 100

80 Control HBU Tensile 60 177µm MRP

40 177µm MRP+S

20

Abrasion Loss 0 EB

Tear Str Max Torque

Control 177 µm 177 µm+S MRP % 0.0 10.0 10.0 Rebound 70°C T90 Sulfur phr 2.0 2.0 2.5 Rebound RT TBBS phr 1.0 1.0 1.0

20 Particle Size Study

 Project Description . MRP of 400, 300, 177, and 105 µm (commercially from whole tire) . MRP loadings of 3%, 6%, and 10% . Standard tread with SBR . Two batches of control compound and one mix each of the MRP batches made . Control master batches blended together before mixing the next pass . Randomization used for each step . All MRP added with the carbon black in the first pass . Three pass mixing used with sulfur and accelerator optimization . Researchers in the UK estimated the intrinsic flaw size of carbon black filled SBR, without MRP, to be 130 μm1

1. P. Kumar, Y. Fukahori, A. G. Thomas, J. J. C. Busfield, Rubber Chem. Technol. 80, 24(2007) 21 Effect of Particle Size on Physical Properties

Normalized Unaged Tensile vs. Normalized Unaged E@B 110

Control

105 400 µm 3%

PD140+ 300 µm 3%

100 177 µm 3%

105 µm 3%

95 400 µm 6% 300 µm 6%

90 PD80+ 177 µm 6% 105 µm 6%

Tensile Strength (Percent) Strength Tensile PD84+ 400 µm 10% 85 300 µm 10% PD40+ 177 µm 10% 80 80 85 90 95 100 105 110 105 µm 10% Elongation @ Break (Percent)

22 | Lehigh Technologies Inc. 22

CONFIDENTIAL Effect of Particle Size on Physical Properties

Normalized Unaged Tensile vs. Normalized Unaged 300M

110 Control

400 µm 3%

105 300 µm 3%

177 µm 3% PD140+ 100 105 µm 3%

400 µm 6% 95 300 µm 6%

PD80+ 177 µm 6% 90 105 µm 6%

Tensile Strength (Percent) Strength Tensile PD84+ 400 µm 10% 85 300 µm 10% PD40+ 177 µm 10% 80 80 85 90 95 100 105 110 105 µm 10% 300% M (Percent)

23 | Lehigh Technologies Inc. 23

CONFIDENTIAL Summary of Findings & Recommendations

. For optimum tensile and modulus, mix MRP’s into the first pass, either with the polymers or the carbon black. For optimum E@B, mix MRP’s later in the first pass with the chemicals

. Increasing the sulfur and slightly decreasing the accelerator levels can recover many of the physical properties to nearly match the same compound without MRP

. There appears to be no antidegradants migrating from MRP’s into the new rubber matrix when the MRP’s have been made from end-of-life tires

. For products with demanding performance requirements, such as tires, the largest particle size MRP to use at 10% loading while maintaining basic physical properties is the 105 µm product

24 CONFIDENTIAL Micronized Rubber Powder Applications – cont’d Underlayment

Better Cost Roofing Waterproofs, Asphalt Management, Improves

Sustainable Materials Traction

Tires without Negative

Performance Impact

Polypropylene

Applications Waterproofs, Sound Sustainable Dampener, Material, Insulator Lowers Costs Barrier Waterproof Waterproof Membranes

Sound Applications

Dampener, HDPE Vibration Sustainable Control, Material, Foam Insulator, Lowers Costs Improves

Polyurethane Polyurethane Durability

25 | Lehigh Technologies Inc. 25 Environmental Benefits of Lehigh’s Sustainable CONFIDENTIAL Micronized Rubber Powder

Lehigh’s Micronized Rubber Powder eliminates waste from going to landfills: end-of-life tires and other post-industrial rubber

Every kg of Lehigh’s Micronized Rubber Powder saves 6.70 liters of oil* Same amount of oil needed to fuel a passenger car for 18 km

Every pound of Lehigh’s Micronized Rubber Powder saves approximately 10kWh of energy* Same amount of energy needed to run a medium window-unit AC for 10 hours

Micronized Rubber Powder releases nearly half the CO2 required to manufacture synthetic rubber *vs. synthetic rubber

26 | Lehigh Technologies Inc. 26

Claims developed by Sustainable Design and Manufacturing Program at Georgia Institute of Technology Global Tire Companies Using MRP – Increasing their Efforts to Produce a Cost Effective, Sustainable Tire

“We have a number of efforts going on in that [sustainability] direction; one of them is to use recycled rubber.” “We are already using recycled rubber.” - Goodyear Chief Technical Play Officer, Jean-Claude Kihn Source: TireBusiness.com

ECOPIA EP422 (ECO) Recycled Ground Rubber Made from ground-up post consumer tires, it contributes to 5% of the tread compound Source: Bridgestonetire.com

Percent usage of recycled rubber doubled between 2008 – 2010 Source: Yokohama 2011 CSR Report

27 | Lehigh Technologies Inc. 27 Thank You

28 | Lehigh Technologies Inc. 28

CONFIDENTIAL