Loading...
HomeMy WebLinkAbout12-7684 t'e`_~~~~J~ is ~a~~12 L3EC 26 AM ~?- ~ PEt~NSY~.~ANft`i IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA FIRST NATIONAL BANK OF ) PENNSYLVANIA, successor by merger to ) The Legacy Bank, ) Plaintiff, ) vs. ) BEN T. WOOTTON, ) Defendant. ) I HEREBY CERTIFY THAT THE ADDRESS OF ) THE PLAINTIFF IS: ) One FNB Boulevard ) Hermitage, PA 16148 ) AND THE DEFENDANT IS: ) 2290 Lambs Gap Road ) Enola, PA 17025 ) c~-~ ) RNEY FOR FF ) CIVIL DIVISION NO.: J ~, ~ ~~g~ TYPE OF PLEADING: COMPLAINT IN CONFESSION OF JUDGMENT FOR MONEY FILED ON BEHALF OF PLAINTIFF: First National Bank of Pennsylvania, successor by merger to The Legacy Bank COUNSEL OF RECORD FOR THIS PARTY: John B. Joyce, Esquire Pa. I.D. #68242 GRENEN & BIRSIC, P.C. One Gateway Center, 9th Floor Pittsburgh, PA 15222 (412) 281-7650 ~ ~/~ .off ~~ y ~ asp s~7 ~o~~~-~ rn~~ ~c.l~ IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA FIRST NATIONAL BANK OF PENNSYLVANIA, successor by merger to The Legacy Bank, CIVIL DIVISION NO.. Plaintiff, vs. BEN T. WOOTTON, Defendant. CONFESSION OF JUDGMENT Pursuant to the warrant of attorney contained in the aforementioned Guaranty, a copy of which is attached to the Complaint filed in this action, I appear for the Defendant and confess judgment in favor of Plaintiff and against the Defendant as follows: Count I -_$5,000,000 Note Principal $3,908,071.67 Interest to 12/17/12 $ 101,367.87 Late Charges 11/19/12 $ 7,831.41 TOTAL $4,017,270.95 Count II - $330,000 Note Principal $ 247,841.37 Interest to 12/17/12 $ 6,428.88 Late Charges 11 / 19/ 12 $ 498.64 TOTAL $ 254,768.89 Count III - $670,000 Note Principal $ 171,934.58 Interest to 12/17/12 $ 4,634.23 Late Charges 11/19/12 $ 2,070.62 TOTAL $ 178,639.43 GRAND TOTAL: $4,450,679.27 with interest at the default contract rate as provided for under the Notes from December 17, 2012, plus reasonable and actual attorneys' fees and costs as provided for under the Notes not to exceed fifteen percent (15%) of the liabilities then outstanding under the Notes. GRENEN &BIRSIC, P.C. Dated: l ~~~'1~-- gy; ~ Jo .Joyce, o eys for ] Hac Vice IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA FIRST NATIONAL BANK OF PENNSYLVANIA, successor by merger to The Legacy Bank, CNIL DNISION IQ Plaintiff, vs. BEN T. WOOTTON, Defendant. COMPLAINT IN CONFESSION OF JUDGMENT FOR MONEY AND NOW, comes Plaintiff, First National Bank of Pennsylvania, successor by merger to The Legacy Bank, including Legacy Bank, a Division of First National Bank of Pennsylvania, by its attorneys, Grenen & Birsic, P.C., files this Complaint in Confession of Judgment for Money as follows: 1. First National Bank of Pennsylvania, successor by merger to The Legacy Bank, including Legacy Bank, a Division of First National Bank of Pennsylvania is a commercial bank doing business in the Commonwealth of Pennsylvania with an office located at One FNB Boulevard, Hermitage, PA 16148 (hereinafter referred to as "Plaintiff '). 2. Ben T. Wootton is an individual with a last known address of 2290 Lambs Gap Road, Enola, PA 17025 (hereinafter referred to as "Defendant"). 1. On or about October 24, 2006, Defendant executed a Guaranty whereunder Defendant unconditionally and irrevocably guaranteed all indebtedness, obligations and liabilities of Keystone Biofuels, Inc. ("Borrower") to Plaintiff, which would include a certain $5,000,000 Note, $330,000 Note and $670,000 Note all dated October 24, 2006 (hereinafter collectively "Notes"), which Notes are set forth in more detail herein below. The Guaranty authorizes the confession of judgment against the Defendant (hereinafter "Guaranty"). A copy of said Guaranty, which copy is a true and correct reproduction of the original Guaranty is marked Exhibit "A", attached hereto and made a part hereof. 2. Borrower is presently indebted to Plaintiff pursuant to the terms and conditions of a certain Term Note A dated October 24, 2006 in the original principal amount of $5,000,000.00 (the "$5,000,000 Note"), as amended by that certain Amendment to Note dated January 31, 2008 and that certain Second Amendment to Note dated August 25, 2008, executed by Defendant and Plaintiff. True and correct copies of said $5,000,000 Note and the amendments thereto, which copies are true and correct reproductions of the original $5,000,000 Note and the amendments thereto, are marked Exhibit "B", attached hereto and made a part hereof. 3. Borrower is presently indebted to Plaintiff pursuant to the terms and conditions of a certain Term Note B dated October 24, 2006 in the original principal amount of $330,000.00 (the "$330,000 Note"), as amended by that certain Amendment to Note dated January 31, 2008 and that certain Second Amendment to Note dated August 25, 2008, executed by Defendant and Plaintiff. True and correct copies of said $330,000 Note and the amendments thereto, which copies are true and correct reproductions of the original $330,000 Note and the amendments thereto, are marked Exhibit "C", attached hereto and made a part hereof. 4. Borrower is presently indebted to Plaintiff pursuant to the terms and conditions of a certain Term Note C dated October 24, 2006 in the original principal amount of $670,000.00 (the "$670,000 Note"), as amended by that certain Amendment to Note dated January 31, 2008 and that certain Second Amendment to Note dated August 25, 2008, executed by Defendant and Plaintiff. A true and correct copy of said $670,000 Note and the amendments thereto, which 2 copies are true and correct reproductions of the original $670,000 Note and the amendments thereto, are marked Exhibit "D", attached hereto and made a part hereof. 5. In connection with the Notes, the Borrower executed and delivered to Plaintiff a certain Loan Agreement. A true and correct copy of the Loan Agreement, which copy is a true and correct reproduction of the original Loan Agreement is marked Exhibit "E", attached hereto and made a part hereof. 6. Other than the aforementioned acquisition by merger of The Legacy Bank by Plaintiff, the aforesaid Guaranty has not been released, transferred or assigned. 7. Judgment is not being entered by confession against a natural person in connection with a consumer credit transaction. 8. Judgment has not been entered against the Defendant on the aforesaid Guaranty in any jurisdiction. 9. The aforesaid Guaranty authorizes the entry of judgment after the amounts thereunder become due, upon the expiration of ten (10) days' demand for payment under the Guaranty. 10. By correspondence of November 5, 2012 and November 6, 2012, Keystone Biofuels, Inc. and Defendant were advised of certain defaults under the Notes, including failure to make payment of the amounts owed when due and Borrower's default under the terms of the Loan Agreement as a result of Borrower's violation of the covenant prohibiting Borrower from disposing of fixed assets serving as collateral for the loan, which Loan Agreement default also constitutes an Event of Default under the Notes, and payment was demanded from Defendant within ten (10) days of the demand. The defaults were not cured by Borrower or Defendant. As a result of said defaults, including the failure to make certain timely payments and for the 3 disposition of certain fixed assets that are collateral for the Notes, Plaintiff sent correspondence dated November 19, 2012 to Keystone Biofuels, Inc. and Defendant demanding payment of all amounts owed to Plaintiff under the aforesaid Notes and corresponding Guaranty; however, Keystone Biofuels, Inc. and Defendant have failed to pay Plaintiff. 11. Defendant is in default of the terms and conditions of the aforesaid Guaranty for failure to make payment of the amounts owed. 12. The itemization of the amount due under the $5,000,000 Note, $330,000 Note, and the $670,000 Note, and consequently, the amount due under the Guaranty, including interest, late charges and fees, as authorized by the Guaranty, is as follows: Count I - $5,000,000 Note Principal $3,908,071.67 Interest to 12/17/12 $ 101,367.87 Late Charges 11/19/12 $ 7,831.41 TOTAL $4,017,270.95 Count II - $330,000 Note Principal $ 247,841.37 Interest to 12/17/12 $ 6,428.88 Late Charges 11/19/12 $ 498.64 TOTAL $ 254,768.89 Count III - $670,000 Note Principal $ 171,934.58 Interest to 12/17/12 $ 4,634.23 Late Charges 11/19/12 $ 2,070.62 TOTAL $ 178,639.43 GRAND TOTAL: $4,450,679.27 4 WHEREFORE, Plaintiff, as authorized by the warrant of attorney contained in the Guaranty, demands judgment against the Defendant in the total sum of $4,450,679.27, with interest on the respective principal sums of the $5,000,000 Note, the $330,000 Note, and the $670,000 Note at the respective default contract rates from December 17, 2012, plus costs of suit and reasonable and actual attorney and collection fees not to exceed fifteen percent (15%) of the liabilities then outstanding under the Notes, and brings said instruments to Court to recover the said sum. BY: GRENEN & BIRSIC, P.C. J .Joyce, Es e a. . #68242 orneys for ai f One Gateway Center, 9`h Floor Pittsburgh, PA 15222 (412) 281-7650 THIS IS AN ATTEMPT TO COLLECT A DEBT, AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. 5 EXHIBTT "A" To Complaint in Confession of Judgment ~ + GUARANTY THIS AGREEMENT dated ~ ~ ~'~''~ ,Z~~ , 2008, entered into by the undersigned BEN T. WOf?TTON (the "Guarantor"} in favor of LEGACY BANK, A DIVISION OF FIRST NATIONAL BANK OF PENNSYLVANIA; estate-chartered commercial bank (the "Bank"}, relating to the liabilities of KEYSTONE BIQFUEL3, INC.., a Pennsylvania corporation (the. "Borrower"}. In consideration of credit accommodations heretofore, now or hereafter granted to Borrower by Bank, the Guarantor hereby unconditionally and irrevocably guarantees and becomes surety to Bank and its successors, endorsees and assigns for the prompt and full payment when due (whether at stated maturity, by acceleration or otherwise) and performance by Borrower of all indebtedness, obligations, and liabilities of every kind and nature (present and future, primary and secondary,. direct. and indirect, absolute and contingent, sole,. joint and~or several, secured and unsecured,: similar and dissimilar,. express and implied, related and unrelated), heretofore, now, or hereafter contracted or acquired, of Borrower to Bank, including but not limited to indebtedness; obligations and liabilities under' and on account of a $S,OQt),QOQ term loan to finance plant expansion, together with all amendments, extensions, modifications, renewals and refinancings thereof or thereto and ail substitutions therefor (the "Liabilities"}. Such liability shah not be affected by nor shall anything herein contained be deemed to be a limitation an the amount of credit which may be extended to Borrower, ar the number of transactions with Borrower or the nature or amount of the obiigadons which may be incurred by Borrower. Guararttar must pay all amounts due under or on account of ttte Liabilities when Bank makes written demand upon Guarantor. The Guarantor further agrees as follows. 1. Guarantor assents to ail agreements made or to be made: with Bank by Borrower, including: any amendments or modifications of any instrument oragreements evidencing or creating any of the Liabilit[es. 2. Bank may, without affecting the obligation of the Guarantor hereunder, exchange or surrender any property pledged. by Borrower without notice to or the- consent of the Guarantor, and Bank need not proceed against or exhaus# any remedies against. Borrower, any other surety or guarantor, any security, or any other party before proceeding against the Guarantor. 3. Bank may renew or extend the term of any of the Liabilities or othenuise amend the terms thereof without notice to or the consent of the Guarantor. 4. Bank may waive any of its rights or remedies against Borrower or any other surety or guarantor with respect to the Liabilities without notice to or the consent of the Guarantor. 5. Bank need not notify the. Guarantor of its acceptance of this agreement or of its intention to act. in reliance thereon, or of any loan to or any other transaction between Bank: and Borrower, or; except as expressly required herein,. of any default by Borrower. 6. As security for all obligations hereunder Bank shall have,. and the- Guarantor hereby assigns and.grants to Bank, a right of set-off against and a lien upon and security interest in (a} ail property of the Guarantor now or at any time hereafter in Bank`s possession in any capacity whatsoever, including but not limited to any balance or share of anydepostt, trust or agency account and any policy of life or other insurance, (b) any claim of the Guarantor against Bank; and the proceeds thereof, and (c) any present or future claim or demand of the Guarantvragainst Borrower anel any collateral therefor. The Guarantor hereby irrevocably appoints Bank. (with full power of r substitution) as the Guarantor's attorney-in-fact to enforce such claims or demands by legal action, voting or proof of debt in any collection, bankruptcy or other proceeding for liquidation, reorganization or arrangement of Borrower or its debts and to endorse on behalf of the Guarantor any instrument for the payment of money concerning same, such recovery to be held by Bank as additional collateral security. The Guarantor shall receive as trustee for, and shalt upon receipt and in the form received forthwith pay to Bank, any recovery made on account of such claims or demands against Borrower. No such claim or demand shall ever be represented by any promissory note or other written evidence of debt, except such as are forthwith endorsed and delivered to Bank. 7. If any of the Liabilities shall not be paid when due (whether at staged maturity ar upon demand, acceleration of maturity or otherwise) or if Borrower shall otherwise default (after the expiration of any appNcable grace periods) with respect to any of the Liabi~ties, Bank, subject to the aforementioned limitations, (A) may forthwith recover from the Guarantor the full amount of the Liabilities; (B) may sell ail or any part of any property held as security hereunder on any exchange or at public or private sale at the option of Bank, at any time or times without advertisement or demand upon or notice to the Guarantor (all of which are hereby waived, except sucth notice as is required by applicable statute and cannot be waived), with the right on the part of Bank or its nominee to become the purchaser thereof at such sale (unless prohibited by statute) free from any equity of redemption and from all other claims; (C) may exercise any rights it may have under any document executed by the Guarantor securing its liabilities hereunder or otherwise executed in connection herewith; (D) shall have the right, immediately and without further action, to set off against the liability of the Guarantor hereunder all money owed by Bank in any capacity to the Guarantor, whether due or not; and (E) may exercise any other remedy available at law or in equity. 8. The obligations of the Guarantor hereunder shall be in addition to that stated in any other suretyship agreement or guarantee, and shall be binding on the heirs, personal arxi legal representatives, successors and assigns of the Guarantor. 9. No failure by Bank to exercise any right hereunder shalt be construed as a waiver of the right to exercise the same or any other right at any other time and from time to time thereafter. 1 Q. This Agreement and the Guarantor's payment obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment of any of the Liabilities is rescinded or must otherwise be restored or returned 6y Bank, aN as though such payments had not been made. Bank's good faith determination as to whether a payment must be restored or returned shall be binding on Guarantor. 11. The Guarantor waives: a. all presentments, demands for performance, notices of nonperformance, protests, notices of protest, and notices of dishonor, except such as is required by applicable statute and cannot be waived; b. the defense of any statute of limitation affecting the obligation of the Guarantor hereunder or the enforcement thereof, to the extent permitted by law; c. any defense arising by reason of any invalidity or unenforceabitity of any of the Liabilities or any instrument evidencing or securing the Liabilities or any disability of Borrower, or by any cessation from any cause whatsoever of the liability of Borrower for the Liabilities or any of them, or by reason of any event or circumstance that under any rule of law would otherwise operate to discharge the liability of a surety or guarantor; _~_ ~ • d. any right to require Bank to advise the Guarantor of any information known to Bank regarding the financial condition of Borrower (it being agreed that the Guarantor assumes the responsibility for being and keeping informed regarding such condition); e. any right of subrogation or reimbursement and any right to enforce any remedy which Bank now has or may hereafter have aga~st Borrower and any benefit of, and any right to participate in, any security now or hereafter held by Bank; and f. any defense arising by reason of any election by Bank pursuant to Section 1111(b) (2) of the United States Bankruptcy Code or any similar or successor section or based upon any borrowing or grant of a security interest under Section 364 of such Code or any similar or successor section. 12. The Guarantor hereby authorizes and empowers Bank, its successors, endorsees aril assignees, to exercise in its or their sole discretion. any rights and remedies, or any combination thereof, which may then be available, it being the purpose and intent of the Guarantor that its obligations hereunder shall be abaolute, independent and unconditional under any and ail circumstances. The Guarantor therefore waives any defense based upon an election of remedies by Bank including, without limitation, any election to proceed by judicial or nonjudicial foreclosure or by deed in 4ieu thereof. 13. TEN (10) DAYS AFTER A DEMAND FOR PAYMENT UNDER THIS GUARANTY, GUARANTOR HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR AND CONFESS JUDGMENT AGAINST ANY OR ALL OF THE UNDERSIGNED FOR SUCH SUMS AS SHALL HAVE OR MAY BECOME DUE HEREUNDER, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, RELEASE OF ERROR, WITHOUT STAY OF EXECUTION AND WITH $2,500 OR FIFTEEN PERCENT OF THE LIABILITIES THEN OUTSTANDING, WHICHEVER IS GREATER, ADDED FOR ATTORNEY'S COLLECTION FEES; AND ALSO WAIVES THE RIGHT OF INQUISITION ON ANY REAL ESTATE LEVIED ON, VOLUNTARILY CONDEMNS THE SAME, AUTHORIZES THE PROTHONOTARY OR CLERK TO ENTER UPON THE WRIT OF EXECUTION SAID VOLUNTARY CONDEMNATION, AGREES THAT SAID REAL ESTATE MAY BE SOLD ON A WRIT OF EXECUTION; AND ALSO WAIVES ANY RELIEF FROM ANY APPRAISEMENT, STAY OR EXEMPTION LAW OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. IF A COPY OF THIS AGREEMENT, VERIFIED BY AFFIDAVIT OF ANY BANK OFFICER SHALL HAVE BEEN FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AGREEMENT AS A WARRANT OF ATTORNEY, ANY PRACTICE OR USAGE TO THE CONTRARY NOTWITHSTANDING. 14. The Guarantor shad pay Bank on demand ail reasonable costs and expenses (including reasonable counsel fees) incurred by Bank in the preparation, administration, amendment, enforcement or collection of any of the Liabilities or of this agreement, including reasonable costs, expenses and fees incurred after as well as before the entry of any judgment. 15. The provisions of this agreement, and the obligations of the Guarantor hereunder, are independent of and separable from each other, and no such provision or obligation shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other such provision or obligation may be invalid or unenforceable in whole or in part. 16. This agreement shall be governed by the laws of the Commonwealth of Pennsylvania. The Guarantor waives any objection based on venue or inconvenient forum. THE -3- .~ ~ ~ GUARANTOR WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION INVOt_VING THIS AGREEMENT. This agreement may be signed in any number of counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 17. Bank may wholly or partially transfer the benefit of this Guaranty to any subsequent transferee or holder of any of the Liabilities. Subject to the preceding sentence, this Guaranty is made exclusively for the benefit of Bank and the undersigned,. and no other person or entity (including, without limitation, the Borrower) is authorized or intended to rely hereon. IN WETNESS WHEREOF, the undersigned, intendingto be legally bound, hasexecuted this agreement, under seal, as of the date first written above: WITNESS: C~_. ~-l~~~----- ~~~~~~- (SEAL) Ben T. Wootton -4- EXHIBIT "B" To Complaint in Confession of Judgment f ) X5,000,000.00 October 24, 2008 Harrisburg, Pennsylvania TERM NOTE a FOR VALUE RECEIVED, and intending to be legally bound, KEYSTONE BIOFUELS, INC., a Pennsylvania corporation, with offices at 4135 St. John's Church Road, Suite 110, Shiremanstown, Pennsylvania 17011 {hereinafter called "Maker"), does hereby promise to pay, without defalcation, to the order of LEQ/tCY BANK, A DIVISION OF FIRST NA~TIQNAL BANIf Ole PENNSYLVANIAN, (hereinafter called the "Payee"), at 2600- Commerce Drive, P.O. Box 60947, Harrisburg, Pennsylvania 17108.60947, or at such other place as the holder hereof may,. from time to time, direct Maker in writing, the principal sum of Five Million Dollars ($11,000,000.00), lawful money of the United Stat®s of America, or such less~ar amount as may have been advanced by Payee to or far the benefit of Maker under the terms of the Loan Agreement of even date between Maker and Payee (the "Loan Agreement"), together with interest on the outstanding principal amount of this Note at the fixed rate of 7.08°,6 pet annum until October 24, 20161 and thereafter at a fluctuating rate per annum equal to the Prime Rate, as in effect from time to time, plus'/:°r6, at the times and in the manner as follows: Maker shalt make monthly Interest only payments on the outstanding principal balance for twelve (12) months; commencing November 24, 2008. Thereafter, commencing November 24, 2007, and continuing on the same day of each month thereafter, principal and interest shalt be payablein consecutive monthly Installments (initially $ 5$. t,'t"~.oaZ~ which installments shali+ be increased or decreased to ;~ reflect. any change(s) in the effective interest rate and shall be first applied to interest ~~- " ~ on the outstanding principal balance hereof and the balance to the payment of the outstanding principal balance hereof until principal and. interest are fully paid; provided, however,. that the entire outstanding principal balance hereof, togetherwith all accrued and unpaid interest, unless sooner paid, shalt be due and payable on or before October 24, 2021. The term "Prime Rate" as used herein means the Base Rate on corporate loans at large U. S. Money Cen#er Commercial Banks as published in the Money Rates column of the Wall: Street,: Journal, Eastern Edition;. or its successor publication as the "Prime Rate". If the Prime Rate is designated as mare than one rate oc published as a range of rates, Prima Rate for purposes of this Note shall mean the highest of the rates published. If the Wal! Street. Journal or its successor publication. ceases to publish a rate or rates of interest as the "Prime Rate", for purposes of this Not® thaterm "Prime Rate" shall mean the rate which Payee establishes as its Prime Ratewhether or not published. The "Prime Rate" shall be determined on the date of this Nate and on the 24th- day of each third month thereafter (each an "Adjustment Date"). If any given Adjustment Date is not a Business Day; the- index wi0 be determined on the next Business Day. "Business Day" shall- mean any day other than a Saturday; Sunday ar a legal holiday on which commercial banks are authorized or required to be closed for business in Harrisburg, Pennsylvania: Interest shall be calculated on the basis of the actual: number of days in the current calendar year divided by 3ti0. Interest shall be payable as provided herein. All then accrued. and unpaid interest shall also be payable when the entire principal balance: of this Note becomes due and payable (whether by stated maturity, demand or acceleration) or, if earlier, when such principal balance is actually paid to Payee. Interest shalt accrue on the unpaid balance hereof at the rate provided for in this Note until the entire unpaid balance has been paid in full, notwithstanding the entry of any judgment against Maker. 1 ) Maker shag have the option of prepaying principal, in whole or in part, at any time(s), without penalty or premium. Any prepayment(s) shall be accompanied by payment of aq interest accrued hereunder to the date of prepayment. Each partial prepayment shall be applied against the installment of principal last (by date) due and payable; and no prepayment shall postpone or interrupt payment of future installments of prinapal and interest, which shag continue to be due and payable until payment hereof in full. Prepaid principal may not thereafter be reborrowed. If any payment hereunder is not paid when due, and continues unpaid for a period of ten(10) days thereafter, Maker agrees to pay to Payee as a late charge an amount computed at a rate of eight percent (8.0%) of such past due amount. The late charge shall be in addition to any interest due. Notwithstanding the foregoing, in no event shalt any late charge be less than ten dogars ($10). The proceeds of the loan evidenced by this Note are being diabun3ed by the Payee in accordance with the terms, conditions and provisions of the Loan Agreement, which Loan Agreement is made a part of this Note as if set forth herein in full. All of the agreements, conditions, covenants, provisions and stipulations contained in the Loan Agreement which are to be kept and performed by Maker, are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, and Maker covenants and agrees to keep and perform them, or cause them to be kept and performed, strictly in accordance w!iftt their terms. This Note is a Note referred to in the Loan Agreement. This Note, the Loan Agreement, and the related collateral documents, are referred to herein collectively as the "Loan Documents", and the provisions thereof are incorporated herein by reference. Subject to any applicable notice and grace period(s), if the Maker shell) faq to observe or perform any ~ the terms, agreement, covenant and cxmditfona of the Maker armed herein or in any other Loan Document, the Payee, in its discretion, but without any duty to do so, and without waiving any defautt, may perform any of such terms, agreements, covenant and cx~nditions, in whole or In part, and any money advanced or expended by the Payee in or toward the fuf~gment of such terms, agreement, covenant and conditions shag be due on demand end shah become a part of and be added to the indebtedness due under tl~is Note, with interest to bs paid thereon at the then current rate provided herein from the date of the respective advance or expenditure, and secured by the Security Agreement and the related collateral documents. Each of the following shall be an Event of Default hereunder. or If any monthly payment of principal and/or interest is not paid on the date when due; 2. ff Maker defaults in the payment or pertomtance of this Note or any other Loan Docu- ment after the expiration of any applicable notice and cure period(s) or fails to perform or comply with any agreement with Bank after any applicable notice and cure period(s) ,os fails to perform or pay when due any material obligation owed to any third party after any applicable notice and cure period(s) absent a bona fide dispute concerning the same; or 3. If Maker is unable to pay its debts as they mature; becomes insoiveM; voluntarily suspends transaction of its business or operations; make an assignment far the benefit of creditors; files a voluntary petition to reorganize or to effect a plan or other arrangement with creditors; or has an involuntary petition filed against it pursuant to the Bankruptcy Code or any amendments thereoo; -2- or applies for or consents to the appointment of a receiver or trustee of all or part of its property, institutes liquidation or dissolution proceedings; or 4. If there is entered against Maker a judgment, levy or lien of a material nature or if a writ or warrant of attachment, execution, garnishment, distraint, possession, or any similar process of a material nature shall be issued by any court against all or a part of the property of Maker, and such judgment, levy, lien, writ, warrant or other process remains unstayed, unbonded or unreleased for a period of thirty (30) days following entry or issuance; or 5. If any dissolution, merger, consolidation or reorganization proceedings is instituted by ar against Maker; or 8. If there is a taking of possession of a substantial part of the property of Maker at the instance(s) of any governmental authority; or 7. If Maker fails to pay any income, excise, or other taxes of any nature whatsoever when due and payable or fails to remit when due to the appropriate governmental agency or autho- rized depository any amount collected or withheld from any employee of Maker for payroll taxes, Soaal Security payments or similar payroll deductions, unless the same is being contested by Maker in good faith, having reserved sufficient funds to pay such tax(es) and any interest and penalties should the contest be unsuccessful; or 8. If the Maker fails to provide Payee with financial information as and when required under the Loan Documents. If an Event of Default shall occur hereunder, or an event of default as de~ribed in any other Loan Document(s), shall occur and be continuing beyond any applicable grace period, Payee, at its option and without further nonce to Maker, may (a) raise the rate of ~terest accruing on the unpaid balance of the principal sum of this Note by four percentage (496) points above the rats of ingest otherwise applicable,. independent of whether Payee elects to accelerate the unpaid principal balance as a result of such defauR; and (b) declare immediately due and payable kts er~ire unpaid balance of the principal sum of this Note with interest accrued thereon at the rate specified to the date of default and thereafter at the rate provided hereki from time to time, and ail other sums due by Maker under the Loan Documents, anything in any of the Loan Documents to the contrary notwithstanding; and payment thereof may be enforced and recovered in whop or in part at any time by one or more of the remedies provided to Payee in the Loan Documents. fn such case, Payee may also recover ai! costs of suit and other expenses in connection therewith, together with a reasonable attorney's commission for co8ection, together with ingest on any juc~ment obt~ned by Payee at the rate provided herein from time to time, including interest at that rate from and after the date of any Sheriff s sale until actual payment is made by the Sheriff to Payee of the foil amount. in the event of any default hereunder, the Payee shall have art immediate right of set off against all liabilities to Maker including the right of set-off against any and ail deposit accounts, which right of set-off shall be in addition to and not in derogation of any right of set-off the Payee may otherwise have by reason of law or agreement. The remedies of Payee as provided in the Loan Documents and the warrants contained therein shah be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of Payee, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof or of any other right or remedy. -3- Except for any required notice(s) under the Loan Documents, Maker hereby waives and releases aN errors, defects and imperfections in any proceedings instituted by Payee under the terms of the Loan Documents, as well as all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment. Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue her~f, or any writ of execution issued thereon, may be so levied solely, in whole or in part, in any order desired by Payee. Maker hereby waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Note, and alt other notices in connection with the delivery. acceptance, performance, default or enforcement of the payment of this Note, and agrees that its liability shall not bs affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee. Maker consents to any and all extensions of time, renewals, waivers or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to the release of the collateral or any part thereof, with or without substitution. Payee shall not be deemed, by any act of omission or commission, to have waived any of its rights or remed~s hereunder unless such waiver is in writing and signed by Payee, and then only to the extent speaflca~y set forth in said writing. A wafver of one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event. IF AN EVENT OF DEFAULT SHALL OCCUR HEREUNDER, THE MAKER DOES HEREBY IRREVOCABLY AUTHORIZE AND EMPOWER ANY ATTORNEY OF ANY COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE TO APPEAR FOR THE MAKER AND ON ITS BEHALF AND TO CONFESS JUDGMENT AGAINST THE MAKER IN FAVOR OF THE PAYEE, WITH OR WITHOUT DECLARATION FILED, FOR THE UNPAID, PRINC{PAL BALANCE. HEREOF, TOGETHER WITH ALL AMOUNTS FOR WHICH THE MAKER MAY @E LIABLE TO THE PAYEE HEREUNDER, INCLUDING, BUT NOT UNITED TO, UNPAIO INTEREST, COSTS AND OTHER EXPENSES OF SUITANE} REASONABLE ATTORNEY'S FEES, AtLAS AFORE9A1i:3: IFA COPY HEREOF, VERIFIED BY AFFIDAVIT, SHALL HAVE BEEN FILED IN SAID PROCEEDINGS, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, BUT SHALL CONTINUE, ANO MAY BE EXERCISED AS AFORESAID, FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL THE AMOUNTS DUE HEREUNDER. Notwithstanding anything to the contrary herein contained, the total liability of Maker for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by appNcable law to be contracted for, charged or received, and if any payments by Maker to Payee include interest in excess of such a maximum amount, Payee shelf apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shalt be refunded to Maker. Any such application or refund shall not cure or waive any Event of Default. in determining whether or not any interest payable under this Note or the Loan Documents exceeds the highest rate permitted by law, any non-principal payment (except payments specifically stated in this Note to be "interest', including without limitation prepayment premiums and late charges, shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest. -4- If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable, it shall be ineffective only to the extent of such prohibition or unenforceability; and' such prohibition or unenforceabilityshall not invalidate the balance of such provision to the extent it is not prohibited or unenforceable, nor invalidate the other provisions hereof, ail of which shall be liberally construed in favor of Payee in order to effect the provisions of the Note. THE MAKER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ISSUES OF FACT IN ANYACTION RELATING:TO ANY RIGHTS OR 08LIGATIONS UNDER THIS NOTE OR OTHER DOCUMENTS RELATING TO THIS TRANSACTION. THE MAKER HEREBY AGREES THAT ANYACTION OR PROCEEDING AGAINST IT TO ENFORCE THi8 NOTE MAY BE COMMENCED IN STATE OR FEDERAL COURT IN ANY COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA. IN WHICH THE PAYEE HAS AN OFFICE, AND THE MAKER WAIVES PERSONAL SERVICE OF PROCESS AND AGREE THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY SERVED~AND SHALL CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED OR CERTIFIED MAIL. The Maker intends this to be a sealed instrument and to be legally bound hereby: This instrument has been executed in, and shall be governed by and construed according to the laws of, the Commonwealth of Pennsylvania. The term "Note" as used herein, shall mean the same as amended, modified or altered, from time to time. Whenever used, the singular shall include the plural, the plural the singular and the use of any gender shalt be applicable to all. genders,. and the words "Payee" and "Maker" shaA be deemed to include. the respective heirs, personal representatives, successors and permitted assigns of Payee and Maker. This obligation shall be legally binding upon the- Maker and the successors and assigns of the Maker and the benefits hereof shall inure to the Payee and the successars and assigns of the Payee.. IN WITNESS WHEREOF, the Maker has duly executed this Note under seal the day and year first above written. ATTEST: KEYSTON OFUELS, INC. Allison A. Miner, Secretary -5- AMENDMENT TO N.QT (Accoun 3891955 ,c This Amendment to Note (hereinafter "Amendment") made this 3/ day of '-R,v ~+r+n~, 2008, by and between: KEYSTONE BIOFUELS, INC., a Pennsylvania Corporation, 48S St. John's Church Road, Suite 110, Shiremanstown, Cumberland County and Commonwealth of Pennsylvania (hereinafter referred to for convenience of reference as "Borrower") AND FIRST NATIONAL BANK OF PENNSYLVANIA, a national banking association, with an office located in the City of Hermitage, County of Mercer and Commonwealth of Pennsylvania (hereinafter referred to as "Bank"); WITNESSETH, THAT WHEREAS, Bank is the holder of a debt evidenced by that certain Promissory Note dated October 24, 2006, whereby Borrower promised to pay to the order of Bank the sum of Five Million Dollars and No Cents ($5,000,000.00) together with interest thereon (hereinafter referred to as the "Note"); and WHEREAS, the parties hereto desire to amend the Note to add an interest only period; NOW, THEREFORE, in consideration of the foregoing provisions, the mutual provisions herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do agree and hereby agree as follows: 1. Principal Amount Owed. 'The parties hereto do hereby agree that as of the date of this Agreement, the outstanding balance due under the Note is Four Million Nine Hundred Seventy One Thousand Two Hundred Sixty Eight Dollars and Eighty Nine Cents ($4,971,268.89) together with interest thereon. . 2. Interest Rate. The per annum rate of interest payable pursuant to the terms of the Note is and shall be Seven and Six One Hundredths percent (7.06%} fixed until October 24, 2016, thereafter the interest rate wilt be reset to the "Prime Rate", as published from time to time in The Wa11 Sh•eef Jo:u•nal, plus one half percent (.SO%) per annum (the "Applicable Rate"). The Applicable Rate shall be calculated on a 365-360 day basis, as provided for in the Note. 3. Monthly Payments and Application of Same; Change of Appllcable Payment. Borrower promises to pay to the Order of Bank interest in arrears monthly, as billed in accordance with the Applicable Rate as stated above, beginning December 24, 2007 and the twenty fourth day of of each successive month thereafter through February 24, 2008; thereafter monthly principal and Page 1 of S interest in the amount of Fifty Eight 'I housand One Hundred Seventy Five Six Dollars and No Cents ($58,175.00), as billed in accordance with the Applicable Rate as stated above, beginning March 24, 2008 and on the twenty fourth day of each successive month thereafter . A late charge of eight percent (8%) of the payment shall be assessed for each payment not received within 10 days after each month the payment is due. Monthly Applicable Payments shall be applied first to late charges as provided in the Note, if any, then to accrued interest and last to principal, and shall be paid to Bank at the place as provided in the Note, or at a different place, if required by Bank. 4. Term and Repayment. Notwithstanding the terms of the Note or other instruments and documents evidencing the obligation thereof, the entire principal balance and accrued interest, if any, shall be fully due and payable on October 24, 2021. 5. Reaffirmation and Waiver of Right of Presentment and Notice of Dishonor. Borrower hereby unconditionally reaffirms and acknowledges the obligations under the Note. Borrower waives the rights of presentment and notice of dishonor under the terms of this Amendment and reaffirms waiver of the same under tl~e Note. b. Incorporation by Reference; Default on Amendment. All of the terms, conditions, covenants, stipulations, prohibitions, events of default, remedies and other provisions, as contained in the Note, are hereby acknowledged by Harrower as existing and shall remain in full force and effect, except as the same may be inconsistent with the terms hereof, and the same are hereby expressly and totally incorporated herein as if set forth in full and shall survive the execution of this Amendment. Failure of the Borrower to make payments under the terms of this Amendment shall constitute an Event of Default for the purposes of the Nate, and Bank shall have all remedies as set forth in the Note and this Amendment. 7. Incorporation by Reference of Warrant to Confess Judgment. Borrower hereby acknowledges that the Note contains a warrant or warrants of attorney to confess judgment, and the provisions of the same are incorporated herein and shall remain in full farce and effect and shall survive the execution of this Amendment. 8. Severability. If any provision of this Amendment is held to be illegal or unenforceable by any Court or other body of competent jurisdiction, then this Amendment shall be construed and interpreted as if such invalid or unenforceable provision were not included herein and the other provisions of this Amendment shall be enforceable to the fullest extent permitted by law. 9. No Waiver. The failure of Bank to declare an event of default, to demand payment in full as provided herein or to othervise exercise any other available remedies or rights upon the failure of Borrower to comply with the terms herein shall not constitute a waiver of Bank's rights to exercise the same upon any subsequent failures of Borrower to strictly comply with the terms of the Note or this Amendment. Page 2 of 5 ! 0. Governing Law; Waiver of Jury Trlal. This Amendment shall be construed and governed in all respects by the statutes and case authority of the Commonwealth of Pennsylvania. Should a dispute arise regarding this Amendment, the parties agree that jurisdiction and venue shall tie in the Court of Common Pleas of Cumberland County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania, the principles of conflicts of laws notwithstanding. BORROWER AND BANK HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING HEREUNDER OR OTHERWISE IN CONNECTION HEREWITH. 11. Modifications and Assignment. This Amendment shall not be modified or amended except in writing and signed by the parties hereto. The rights, obligations and performances of Borrower under this Amendment shalt not be assigned to nor assumed by any other party without the prior written consent of Bank, references to assigns elsewhere herein notwithstanding. 12. Draftsmanship. This Amendment has been drafted by Bank for the convenience of the parties hereto, and such fact shall be irrelevant in the construction and interpretation of the same; rather, this Amendment shall be construed and interpreted liberally for the purposes set forth Herein. 13. Successors Bound; Interpretation of Terms. This Amendment shall inure to and bind the parties hereto and their respective heirs, personal representatives, successors and assigns, as the case may be. Words of gender as used herein shall be interpreted to include every other gender, and. the singular shall include the plural, and the plural the singular when the sense'so requires in order to effectuate the obligations of Borrower as set forth in this Amendment, the Note and the other instruments and documents evidencing the same. 14. Remedies Cumulative; Joint and Several Liability. The rights and remedies contained hereunder, together with the rights and remedies as contained in the Note and other documents relating to this transaction, shall be independent and cumulative to any other rights, remedies or actions at law or in equity which Bank may have or subsequently acquire against Borrower. The Undersigned, if more than one, shall be jointly and severally liable for all obligations under the Note and this Amendment. 15. Counterparts. This Amendment may be executed iii more than one counterpart as the parties may deem desirable; however, all such counterparts shall constitute but one and the same original. 16. Headnotes. The headnotes contained at the beginning of the paragraphs herein are inserted for the convenience of reference only and the same shall not be construed or interpreted to Iimit or restrict the provisions as set forth herein or considered in the construction and interpretation of this Amendment. Page 3 of 5 17. Facsimile. A telecopy, facsimile or electronically or thermographically-reproduced copy of this Amendment as fully executed and acknowledged shall be as valid and enforceable as the original Hereof. 1 S. Guarantors' Consent Ind Estoppel. The terms of this Amendment are hereby expressly acknowledged and consented to by the undersigned guarantors of the Note, and the undersigned guarantors Hereby waive any defense based upon the modification of the Note as provided herein, and the joinder herein shall be interpreted and act as an estoppel against the same to challenge the validity or enforceability of the Guaranty Agreement on any legal or equitable basis because of the terms and provisions of this Amendment. IN WITNCSS WHEREOF, the parties hereto, intending to be legally bound in accordance with the provisions of the Uniform Written Acknowledgments Act (33 P.S. § 1, et sic .) have hereunto set their respective hands and seals on the date above first written. ATTEST: BORROWER: KEYSTONE BIOFUELS, INC. CCecao:- ~~ By ` jG.~.._. W~----- (SEAL) Secretary Race K. Miner, Founder/CEO Cc.'~~ ~"/~,~ By ~ 1° (SEAL) Secretary Bea Wootton, C'ontrotler ,~ •,,ry,,,- ATTEST: BANK: FIRST NATIONAL BANK OF PENNSYLVANIA ,. _ __ BY ~'/ (SEAL) Assistant Secretary Charles M. Wasson, Senior Vice President CMW/db Page 4 of 5 r ~ ) ACKNOWLEDGMENT AND CONSENT OF GUARANTORS The undersigned, jointly and severally intending to be legally bound hereby, in accordance with tine Uniform Written Acknowledgments, l~t (33 P S. §1, et sue.), hereby acknowledge and consent to the foregoing Agreement this ~ day of , 2008. ~_~. fitness ~1t ~,..~„~.r fitness Race K. Miner Ben Wootton Page 5 of 5 •r SECOND AMENDMENT TO NOTE (Account # 43891955) This Amendment to Note (hereinafter "Amendment") made this~'~day of ~~c/ , 2008, by and between: KEYSTONE BIOFUELS, INC., a Pennsylvania Corporation, 485 St. John's Church Road, Suite 110, Shiremanstown, Cumberland County and Commonwealth of Pennsylvania (hereinafter referred to for convenience of reference as "Borrower") AND FIRST NATIONAL BANK OF PENNSYLVANIA, a national banking association, with an office located in the City of Hermitagq County of Mercer and Commomvealth of Pennsylvania (hereinafter refen~ed to as "Bank"); WITNESSETH, THAT WHEREAS, Bank is the holder of a debt evidenced by that certain Promissory Note dated October 24, 2006, whereby Borrower promised to pay to the order of Bank the sum of Five Million Dollars and No Cents ($5,000,000.00) together with interest thereon (hereinafter referred to as the "Note"); and WHEREAS, the parties hereto desire to amend the Noto to add an interest only period; NOW, THEREFORE, in consideration of the foregoing provisions, the mutual provisions herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do agree and hereby agree as follows: 1. Principal Amount Owed. The parties hereto do hereby agree that as of the date of this Agreement, the outstanding balance due under the Note is Four Million Nine Hundred Seventy One Thousand Two Hundred Sixty Three Dollars and Nine Cents ($4,971,263.09) together with interest thereon. 2. Interest Rate. The per annum rate of interest payable pursuant to the terms of the Note is and shall be Seven and Six Hundredths percent (7.06%) fixed until October 24, 2016, thereafter the interest rate will be reset to the then-existing "Prime Rate"' as published from time to time in The Wall Street Journal, or any successor publication, plus one-half percent (.50%) per annum fixed for three months, with successive resets each quarter to the then-existing Prime Rate plus one-half percent (.50%) per annum fixed for three months (the "Applicable Rate"). The Applicable Rate shall be calculated on a 365-360 day basis, as provided for in the Note. Page 1 of 5 .~ 3. Monthly Payments and Application of Same; Change of Applicable Payment. Borrower promises to pay to the Order of Hank interest in arrears monthly, as billed in accordance with the Applicable Rata as stated above, beginning May 24, 2008 and the twenty fourth day of each successive month thereafter through September 24, 2008; tha+eaftar monthly principal and interest in the amount of Forty Eight Thousand Eight Hundred Fifty Nine Dollars and Eighty Nine Cents ($48,859.89), as billed in accordance with the Applicable Rate as stated above, beginning October 24, 2008 and on the twenty fourth day of each successive month thereafter until such time as an increase or decrease in the Applicable Rate at which time the payment shall be recalculated to the amount necessary to fully amortize the outstanding principal balance and accrued interest, if any, over the remaining torn of the loan. A late charge of eight percent (8%) of the payment shall be assessed for each payment not received within 10 days after each month the payment is due. Monthly Applicable Payments shall be applied first to late charges as provided in the Note, if any, then to accrued interest and last to principal, and shall be paid to Bank at the place as provided in the Note, or at a different place, if required by Bank. 4. Term and Repayment. Notwithstanding the terms of the Note or other instruments and documents evidencing the obligation thereof, the entire principal balance and accrued interest, if any, shall be fully due and payable on October 24, 2021. 5. Reaftlrmatlon and Waiver of Right of Presentment and Notice of Dishonor. Borrower hereby unconditionally reaffirms and acknowledges the obligations under the Note. Borrower waives the rights of presentment and notice of dishonor under the teens of this Amendment and reaffirms waiver of the same under the Note. 6. Ineorporation by Reference; Default on Amendment. All of the terms, conditions, covenants, stipulations, prohibitions, events of default, remedies and other provisions, as contained in the Note, are hereby acknowledged by Borrower as existing and. shall remain in foil force and affect, except as the same maybe inconsistent with the terms hereof, and the same are hereby expressly and totally incorporated herein as if set forth in full and shall survive the execution of this Amendment. Failure of the Borrower to make payments under the terms of this Amendment shall constitute an Event of Default for the purposes of the Note, and Bank shall have all remedies as set forth in the Note and this Amendment. 7. Incorporation by Reference of Warrant to Confess Judgment. Borrower hereby acknowledges that the Note contains a warrant or warrants of attorney to confess judgment, and the provisions of the same are incorporated herein and shall remain in full tbrce and effect and shall survive the execution of this Amendment. 8. Severability. Tf any provision of this Amendment is held to be illegal ar unenforceable by any Court or other body of competent jurisdiction, then this Amendment shall be construed and interpreted as if such invalid or unenforceable provision were not included herein and the other provisions of this Amendment shall be enforceable to the fullest extent permitted by law. Page 2 of 5 _~ 9. No Waiver. The failure of Bank to declaze an event of default, to demand payment in full as provided herein or to otherwise exercise any other available remedies or rights upon the failura of Borrower to comply with the terms herein shall not constitute a waiver of Bank's rights to exercise the same upon any subsequent failures of Borrower to strictly comply with the terms of the Note or this Amendment. 10. Governing Law; Waiver of Jury Triai. This Amendment shall bo construed and governed in all respects by the statutes and case authority of the Commonwealth of Pennsylvania. Should a dispute arise regarding this Amendment, the parties agree that jurisdiction and venua shall lie in the Court of Common Pleas of Cumberland County, Pennsylvania, or the united States District Court for the Middle District of Pennsylvania, the principles of conflicts of laws notwithstanding. BORROWER AND BANK HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING HEREUNDER OR OTHERWISE IN CONNECTION HEREWITH. 11. Modiflcationa and Assignment. This Amendment shall not bo modified or amended except in writing and signed by the parties hereto. The rights, obligations and performances of Borrower under this Amendment shall not be assigned to nor assumed by any other party without the prior written consent of Bank, references to assigns elsewhere herein notwithstanding. 12. Draftsmanship. This Amendment has been drafted by Bank for the convenience of the parties hereto, and such fact shall bo irrelevant in the construction and interpretation of the same; rather, this Amendment shall be construed and interpreted liberally for the purposes set forth herein. 13. Successors Bound; Interpretation of Terms. This Amendment shall inure to and bind the parties hereto and their respective heirs, personal representatives, successors and assigns, as the case may be. Words of gender as used herein shall be interpreted to include every other gander, and the singular shall include the plural, and the plural the singular when the sense so requires in ardor to effectuate the obligations of Borrower as set forth in this Amendment, the Note and the other instruments and documents evidencing the same. 14. Remedies Cumalative; Joint and Several Liability. Tho rights and remedies contained hereunder, together with the rights and remedies as contained in the Noto and other documents relating to this transaction, shall be independent and cumulative to any other rights, remedies or actions at law or in equity which Bank may have or subsequently acquire against Borrower. The Undersigned, if more than ono, shall be jointly and severally liable for all obligations under the Note and this Amendment. 15. Counterparts. This Amendment may be executed in morn than one counterpart as the parties may deem desirable; however, all such counterparts shall constitute but one and the same original. Page 3 of 5 1 G. Headnotes. The headnotes contained at tha beginning of the paragraphs herein are inserted for the convenience of reference only and the same shall not be construed or interpreted to limit or restrict the provisions as set forth herein or considered in the construction and interpretation of this Amendment. 17. Faeslmile. A telecopy, facsimile or electronically or thermographically-reproduced copy of this Amendment as fully executed and acknowledged shall be as valid and enforceable as the original hereof. 18. Guarantors' Consent and Estoppel. The terms of this Amendment are hereby expressly acknowledged and consented to by the undersigned guarantors of the Note, and the undersigned guarantors hereby waive any defense based upon the modification of the Note as provided herein, and the joinder herein shall be interpreted and act as an estoppel against the same to challenge the validity or enfoc~ceability of the Guaranty Agreement on any legal or equitable basis because of the terms and provisions of this Amendment. IN WITNESS WIiEREOF, the parties hereto, intending to be legally bound in accordance with the provisions of the Uniform Written Acknowledgments Act (33 P.S. § 1, seg.) have hereunto set their respective hands and seals on the date above first written. BORROWER: KEYSTONE BIOFUELS, INC. ~) ,; By ~- (SEAL) Race Miner, CEO By (SEAL) Ben T. Wootton, President ATTEST: BANK: FIRST NATIONAL BANK OF PENNSYLVANIA By' (SEAL) Assistant Sec ary Charles M. Wasson, Senior Vice President CMW/m[ Page 4 of 5 ATTEST: ACKNOWLEDGMENT AND CONSENT OF GUARANTORS The undersigned, jointly and severally intending to be legally bound hereby, in accordance with the Uniform Written Acknowledgments Act (33 P.S. § 1, e~ seg.), hereby acknowledge and co t to the foregoing Agreement this ~ y'gay of~v~t r , 2008. Witness R e K. Miner LLB h'/ ~~ Witness Ben T. Wootton Page S of 5 EXHIBIT "C" To Complaint in Confession of Judgment $330,000.00 October 24, 2006 Harrisburg, Pennsylvania TERM NOTE B FOR VALUE RECEIVED, and intending to be legally bound, KEYSTONE BIOFUELS, INC., a Pennsylvania corporation, with offices at 485 St. John's Church Road, Suite 110, Shiremanstown, Pennsylvania 17011 (hereinafter called "Maker"), does hereby promise to pay, without defalcation, to the order of LEt3ACY BANK, A DIVISION OF FIRST NATIONAL BANK OF PENNSYLVANIA, (hereinafter called the "Payee"), at 2800 Commerce Drive, P.O. Box 60947, Harrisburg, Pennsylvania 17108-60947, or at such other place as the holder hereof may, from time to time, direct Maker in writing, the principal sum of Three Hundred Thirty Thousand Dollars ($330,000.00), lawful money of the United States of America, or such lesser amount as may have been advanced by Payee to or for the benefit of Maker under the terms of the Loan Agreement of even date between Maker and Payee {the "Loan Agreement', together with interest on the outstanding principal amount of this Note at the fixed rate of 7.0696 per annum until October 24, 2018, and thereafter at a fluctuating rate per annum equal to the Prime Rate, as in effect from time to time, plus '/:96, at the times and in the manner as follows: Commencing November 24, 2008, and continuing on the same day of each month thereafter, principal and interest shall be payable in consecutive monthly instaNments (initially $2,998.34), which installments shah be increased or decreased to refbct any change(s) in the effective interest rate and shall be first applied to interost on the ouistanding principal balance hereof and the balance to the payment of the outstanding principal balance hereof until principal and interost are fully paid; provided, however, that the entire outstanding principal balance hereof, together with ail accrued and unpaid interest, unless sooner paid, shall be due and payable on or before October 24, 2021. The term "Prime Rate" as used herein means the ease Rate on corporate loans at large U.S. Money Center Commerdal Banks as published in the Money Rates column of the Waft Street Journal, Eastern Edition, or its successor publication as the "Prime Rate". If the Prime Rate is designated as more than one rate or publ~hed as a range of rates, Prime Rate for purposes of this Note shall mean the highest of the rates publ~hed. If the Wall Street Journal or its successor publication ceases to publish a rate or rates of interest as the "Prime Ram", for purposes of this Note the term "Prime Rata" shah mean the rate which Payee establishes as its Prime Rabe whether or not published. Changes in the Prime Rate shall be effective as of the date the Prime Rate changes. Interest shall be calculated on the basis of the actual number of days in the current ca~ndar year divided by 380. Interest shall be payable as provided herein. All then accrued and unpaid interest shah also be payable when the entire principal balance of this Note becomes due and payable (whether by stated maturity, demand or acceleration) or, if earlier, when such principal balance is actually paid to Payee. Interest shall accrue on the unpaid balance hereof at the rate provided for in this Note until the entire unpaid balance has been paid in full, notwithstanding the entry of any judgment against Maker. Maker shall have the option of prepaying principal, in whole or in part, at any time(s), without penalty or premium. Any prepayment(s) shall be accompanied by payment of ail interest accrued hereunder to the date of prepayment. Each partial prepayment shall be applied against the installments of principal last (by date) due and payable; and no prepayment shalt postpone or ;~ interrupt payment of future installments of principal and interest, which shall continue to be due and payable until payment hereof in full. Prepaid principal may not thereafter be reborrowed. If any payment hereunder is not paid when due, and continues unpaid for a periad of ten(10) days thereafter, Maker agrees to pay to Payee as a late charge an amount computed at a rate of eight percent (8.096) of such past due amount. The late charge shall be in addition to any interest due. Notwithstanding the foregoing, in no event shall any late charge be less than ten dollars ($10). The proceeds of the loan evidenced by this Note are being disbursed by the Payee in accordance with the terms, conditions and provisions of the Loan Agreement, which Loan Agreement is made a part of this Note as if set forth herein in full. AU of the agreements, conditions, covenants, provisions and stipulations contained in the Loan Agreement which are to be kept and performed by Maker, are hereby made a part of this Nate to the same extent and with the same force and effect as if they were fully set forth herein, and Maker covenants and agrees to keep and perform them, or cause them to be kept and performed, sirictly in accordance with their terms. This Note is a Note referred to in the Loan Agreement. This Note, the Loan Agreement, and the related collateral documents, are referred to herein collectively as the "Loan Documents", and the provisions thereof are incorporated herein by reference. Subject to any applicable notice and grace period(s), If the Maker shall fail to observe or perform any of the terms, agreements, covenar~ta and conditions of the Maker contained herein or in any other Loan Document, the Payee, in its discretion, but without any duty to do so, and without waiving any default, may perform any of such terms, agreements, covenants and conditions, in whole or in part, and any money advanced or expended by the Payee in or toward the fulfillment of such temps, agreements, covenants and conditions shall be due on demarxi and shall become a part of and be added to the indebtedness due under this Note, with interest to ba paid thereon at the then current rata provided herein from the date of the respective advance or expenditure, and secured by the Security Agreement and the related collateral documents. Each of the following shall be an Event of Default hereunder. If any monthly payment of prinapal and/or interest is not paid on the date when due; or 2. If Maker defaults in the payment or performance of this Note or any other loan Docu- ment after the expiration of any applicable notice and cure period{s) or fails to perform or comply with any agreement with Bank after any applicable notice and cure period(s) g~ faits to perform or pay when due any material obligation owed to any third party after any applicable notice aril cure period{s) absent a bona fide dispute concerning the same; or 3. If Maker is unable to pay its debts as they mature; becomes insolvent; voluntarily suspends transaction of its business or operations; make an assignment for the benefit of creditors; files a voluntary petition to reorganize or to effect a plan or other arrangement with creditors; or has an involuntary petition filed against it pursuant to the Bankruptcy Code or any amendments thereto; yr applies for or consents to the appointment of a receiver or trustee of all or part of its property, institutes liquidation or dissolution proceedings; or 4. If there is entered against Maker a judgment, levy or lien of a material nature or if a writ or warrant of attachment, execution, garnishment, distraint, possession, or any similar process -2- of a material nature shall be issued by any court against all or a part of the property of Maker, and such judgment, levy, lien, writ, warrant or other process remains unstayed, unbonded or unreleased for a period of thirty (30) days following entry or issuance; or 5. If any dissolution, merger, consoNdation or reorganization proceedings is instituted by or against Maker; or 6. If there is a taking of possession of a substantial part of the property of Maker at the instance(s) of any govemmental authority; or 7. If Maker fails to pay any income, excise, or other taxes of any nature whatsoever when due and payable or fails to remit when due to the appropriate governmental agency or autho- rized depository any amount collected or withheld from any employee of Maker for payroll taxes, Social Security payments or similar payroll deductions, unless the same is being contes~id by Maker in good faith, having reserved sufficient funds to pay such tax(es) and any interest and penalties should the contest be unsuccessful; or 8. If the Maker fails to provide Payee with financial information as and when required under the Loan Documents. If an Event of Default shall occur hereunder, or an event of default as described in any other Loan Documents}, shall occur and be continuing beyond any applicable grace period, Payee, at its option and without further notice to Maker, may (a) raise the rate of interest accruing on the unpaid balance of the prindpal sum of this Note by four percentage (496) points above the rate of interest otherwise applicable, independent of whe#her Payee elects to accelerate the unpaid principal balance as a result of such default; and (b) declare immediately due and payable the entire unpaid balance of the principal sum of this Note with interest accrued thereon at the rate specked to the date of default and thereafter at the rate provided herein from time to time, and ail other sums due by Maker under the Loan Documents, anything in any of the Loan Documents to the contrary notwithstanding; and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to Payee in the Loan Documents. In such case, Payee may also recover all costs of suit and other expenses in connection therewith, together with a reasonable attorney's commission for collection, together with interest on any judgment obtained by Payee at the rate Ixovided herein from time to time, including interest at that rate from and after the date of any Sheriffs sale until actual payment is made by the Sheriff to Payee of the full amount. In the event of any default hereunder, the Payee shall have an immediate right of set-off against all liabili#ies to Maker including the right of set-off against any and all deposit accounts, which right of Set-off shall be in addition to and not in derogation of any right of set-off the Payee may otherwise have by reason of law or agreement. The remedies of Payee as provided in the Loan Documents and the warrants contained therein shall be cumulative and concurrent, and may be pursued singly, succx}aaiv~y or together at the sole discretion of Payee, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof or of any other right or remedy. Except for any required notice(s) under the Loan Documents, Maker hereby waives and releases all errors, defects and imperfections in any proceedings instituted by Payee under the terms of the Loan Documents, as well as all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising -3- > > from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extens~n of time for payment. Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained byvirtue hereof, or any writ of execution issued thereon, may be so levied solely, in whole or in part, in any order desired by Payee. Maker hereby waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Note, and all other notices in connection with the delivery, acceptance, pertormance, default or enforcement of the payment of this Note, and agrees that its liability shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee. Maker consents to any and all extensions of time, renewals, waivers or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to the release of the collateral or any part thereof, with or without substitution. Payee shah not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Payee, and then only to the extent specificaNy set forth in said writing. A waiver of one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event. IF AN EVENT OF DEFAULT SHALL OCCUR HEREUNDER, THE MAKER DOES HEREBY IRREVOCABLY AUTHORIZE AND EMPOWER ANY ATTORNEY OF ANY COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE TO APPEAR FOR THE MAKER AND ON ITS BEHALF AND TO CONFESS JUDGMENT AGAINST THE MAKER IN FAVOR OF THE. PAYEE, WITH OR WITHOUT DECLARATION FILED, FOR THE UNPAID PRINCIPAL BALANCE HEREOF, TOGETHER WITH ALL AMOUNTS FOR WHICH THE MAKER MAYBE LIABLE TO THE PAYEE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, UNPAID INTEREST, COSTS AND OTHER EXPENSES OF SUIT AND REASONABLE ATTORNEY'S FEES, ALL AS AFORESAID. IF A COPY HEREOF, VERIFIED BY AFFIDAVIT, SHALL HAVE BEEN FILED IN SAID PROCEEDINGS, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, BUT SHALL CONTINUE, AND MAY BE EXERCISED AS AFORESAID, FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL THE AMOUNTS DUE HEREUNDER. Notwithstanding anything to the contrary herein contained, the total liability of Maker for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by applicable law to be contracted for, charged or received, and if anypaymenta by Maker to Payee include interest in excess of such a maximum amount, Payee shall apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shah be refunded to Maker. Any such application or refund shall not cure or waive any Event of Default. In de#ermining whether or not any interest payable under this Note or the loan Documents exceeds the highest rate permitted bylaw, any non-principal payment (except payments specifically stated in this Note to be "interest', including without limitation prepayment premiums and late charges, shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest. If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable, it shall be ineffective only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision to the extent it -4- _' > > is not prohibited or unenforceable, nor invalidate the other provisions hereof, all of which shall be liberally construed in favor of Payee in order to effect the provisions of the Note. THE MAKER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ISSUES OF FACT IN ANYACTION RELATING TO ANY RIGHTS OR OBLIGATIONS UNDER THIS NOTE OR OTHER DOCUMENTS RELATING TO THIS TRANSACTION. THE MAKER HEREBY AGREES THAT ANY ACTION OR PROCEEDING AGAINST IT TO ENFORCE THIS NOTE: MAY 8E COMMENCED IN STATE OR FEDERAL COURT IN ANY COUNTY tN THE COMMONWEALTH OF PENNSYLVANIA IN WHICH THE PAYEE HAS AN OFFICE, AND THE MAKER WAIVES PERSONAL SERVICE OF PROCESS AND AGREE THAT A SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED OR CERTIFIED MAIL. The Maker intends this to be a sealed. instrument and to be legally bound hereby. This instrument has been executed in, and shall be governed by and construed according to the laws of, the Commonwealth of Pennsylvania. The term "Note" as used herein, shall mean the same as amended, modified or altered, from time to time. Whenever used, the singular shall include the. plural, the plural the singular and the use of any gender shall be applicable to all genders, and the words "Payee" and "Maker" steal! be deemed to include the respective heirs,. personal representatives, successors and permitted assigns of Payee and Maker. This obligation shall be legally binding upon the Maker and the successors and assigns of the Maker and the benefits hereof shall inure to the Payee and the successors and assigns of the Payee. IN WITNESS WHEREOF, the Maker has duly executed this Note under seal the day and year first above written. ATT ST: KEYSTO IOFUELS, INC. y Allison A. Miner, Secretary R e K. Miner, CEO -5- EXPLANATION AND WAIVER OF RIGHTS REGARDING CONFESSION OF JUDGMENT 1. On the date hereof, KEYSTONE BIOFUELS~ INC., a Pennsylvania corporation (the "Obligor") is signing and delivering to LEGACY BANK, A DIVISION OF FIRST NATIONAL BANK OF PENN8YLVANIA (the "Bank") a (X) Term Note B in the principal sum of Three Hundred Thirty Thousand Dollars ($330,000.00). [ ] Guaranty of Obligations of [ ) Other (as the same may be renewed, modified, amended, extended, restated or rep{aced, whether one or more, the "OWigation'~. The Obligor has been advised by the Bank (and by the Obligor's counsel, if applicable) that the Obligation contains a clause that provides that the Bank may confess judgment against the Obligor. The Obligor has read the Obligation and clearly and specifically understands that by signing the Obligation which contains such confession of judgment clause: a. The Obligor is authorizing the Bank to enter a judgment against the Obligor and in favor of the Bank, which Witt give the Bank a lien upon any real estate which the Obligor may own in any county where the judgment is entered; b. The Obligor is giving up an important right to any notice or opportunity for a hearing before the entry of this judgment on the records of the Court; c. The Obligor is agreeing that the Bank may enter this judgment and understands that the Obligor will be unable to contest the validity of the judgment, should the Bank enter it, unless the Obligor successfully challenges entry of the judgment on procedural grounds through a petition to open or strike the judgment, which will require the Obligor to retain counsel at the Obligors expense; d. The Obligor is giving up an important right to any notice or opportunity for a hearing before the Bank may request and use the power of the state government to deprive the Obligor of its property pursuant to the judgment by seizing or having the Sheriff or other official seize the Obligor's bank accounts, inventory, equipment, furnishings, or any other personal property that the Obligor may own, to satisfy the Obligation; and e. The Obligor may be immediately deprived of the use of arty property that is seized by the Bank pursuant to the judgment without notice or a hearing, and the procedural rules of Pennsylvania's court system do not guarantee that the Obligor will receive a prompt hearing after the Obligor's property is seized. 2. The Obligor knows and understands that it is the confession of judgment clause in the Obligation which gives the Bank the rights described in subparagraphs (a) through {e) of paragraph 1 above. 3. Fully and completely understanding the rights which are being given up if the Obligor signs the Obligation containing the confession of judgment, the Obligor nevertheless freety, knowingly and voluntarily waives said rights and chooses to sign the Obligation. 4. The Obligor acknowledges that the proceeds of the Obligation are to be used for business purposes. Dated this Z ``~ day of yG)'v 1'y 2006. 7HE OBLIGOR HAS READ THIS EXPLANATION AND WAIVER PRIOR TO SIGNING THE OBLIGA- TION AND FULLY UNDERSTANDS ITS CONTENTS. ATTEST: KEYSTONE BIOFUELS, INC. Allison A. Miner, Secretary R e K. Hiner, CEO COMMONWEALTH OF PENNSYLVANIA SS COUNTY OF CvrrlJU land, On the ~ day of (X 7~~Y 2008, before me, a notary- public for said Commonwealth and County, the undersigned officer, personally appeared RACE K. MINER, who acknowledged himself to be CEO of KEYSTONE BIOFUELS, INC., and that he, as such officer, being authorised to do so, executed the foregoing Explanation and Waiver of Rights Re~rding Confession of Judgment, for the purposes therein contained by signing the name of the corporation by himse~ as such officer. And safd RACE K. MINER, did further certify and acknowledge that he received a true, correct and complete copy of the foregoing Explanation and Waiver of Rights Regarding Confession of Judgment. IN WITNESS WHEREOF, I have hereunto set my hand and official seal. No ry Public -2- C OF P~SYi,Y11N1~, JILL A. S1iIMaAtl~is{~~ary pukes 1Vr~p, Cum C~uuahr MY Cuenrttbn Ea~tres APdI Z9, tEEfI~©99 AMENDME O N ~ TE (Account #43891 t_ This Amendment to Note (Hereinafter "Amendment"} made this ~ day of J~~~,~_, 2008, by and between: KEYSTONE BIOFUELS, INC., a Pennsylvania Corporation, 485 St. John's Church Road, Suite 110, Shiremanstown, Cumberland County and Commonwealth of Pennsylvania (hereinafter referred to for convenience of reference as "Borrower") AND FIRST NATIONAL BANK OF PENNSYLVANIA, a national banking association, with an office located in the City of Hermitage, County of Mercer and Commonwealth of Pennsylvania (hereinafter referred to as "Bank"); WITNESSETH, THAT WHEREAS, Bank is the holder of a debt evidenced by that certain Promissory Note dated October 24, 2006, whereby Borrower promised to pay to the order of Bank the sum of Three Hundred Thirty Thousand Dollars and No Cents ($330,000.00) from the original note together with interest thereon (hereinafter referred to as the "Note"); and WHEREAS, the parties hereto desire to amend the Note to add an interest only period; NOW, THEREFORE, in consideration of the foregoing provisions, the mutual provisions herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do agree and hereby agree as follows: 1. Principal Amount Owed. The parties hereto do hereby agree that as of the date of this Agreement, the outstanding balance due under the Note is Three Hundred Sixteen Thousand Twenty Five Dollars and Fifty Seven Cents ($316,025.57) together with interest thereon. 2. Interest Rate. The per annum rate of interest payable pursuant to the terms of the Note is and shall be Seven and Six One Hundredths percent (7.06%) fixed until October 24, 2016, thereafter the interest rate will be reset to the "Prime Rate", as published from time to time in The Wall Street Jour~tal, plus one half percent (.SO%) per annum (the "Applicable Rate"). The Applicable Rate shall be calculated on a 365-360 day basis, as provided for in the Note. 3. Monthly Payments and Application of Same; Change of Applicable Payment. Borrower promises to pay to the Order of Bank interest in arrears monthly, as billed in accordance with the Applicable Rate as stated above, beginning December 24, 2007 and the twenty fourth day of each successive month thereafter through February 24, 2008; thereafter monthly principal and interest in the amount of Two Thousand Nine Hundred Ninety Six Dollars and Thirty Four Page 1 of 5 Cents ($2,996.34), as billed in accordance with the Applicable Rate as stated above, beginning March 24, 2008 and on the twenty fourth day of each successive month thereafter . A late charge of eight percent (8%) of the payment shall be assessed for each payment not received within 10 days after each month the payment is due. Monthly Applicable Payments shall be applied first to late charges as provided in the Note, if any, then to accrued interest and last to principal, and shall be paid to Bank at the place as provided in the Note, or at a different place, if required by Bank. 4. Term and Repayment. Notwithstanding the terms of the Note or other instruments and documents evidencing the obligation thereof, the entire principal balance and accrued interest; if any, shall be fully due and payable on October 24, 2021. 5. Reaffirmation and Waiver of Right of Presentment and Notice of Dishonor. Borrower hereby unconditionally reaffirms and acknowledges the obligations under the Note. Borrower waives the rights of presentment and notice of dishonor under the terms of this Amendment and reaffirms waiver of the same under the Note. 6. Incorporation by Reference; Default on Amendment. All of the terms, conditions, covenants, stipulations, prohibitions, events of default, remedies and other provisions, as contained in the Note, are hereby acknowledged by Borrower as existing and shall remain in full force and effect, except as the same may be inconsistent with the tenors hereof, and the same are hereby expressly and totally incorporated herein as if set forth in full and shall survive the execution of this Amendment. Failure of the Borrower to make payments under the terms of this Amendment shall Constitute an Event of Default for the purposes of the Note, and Bank shall have all remedies as set forth in the Note and this Amendment. 7. Incorporation by Reference of Warrant to Confess Judgment. Borrower hereby acknowledges that the Note contains a warrant or warrants of attorney to confess judgment, and the provisions of the same are incorporated herein and shall remain in full force and effect and shall survive the execution of this Amendment. 8. Severability. If any provision of this Amendment is held to be illegal or unenforceable by any Court or other body of competent jurisdiction, then this Amendment shall be construed and interpreted as if such invalid or unenforceable provision were not included herein and the other provisions of this Amendment shall be enforceable to the fullest extent permitted bylaw. 9. No Waiver. The failure of Bank to declare an event of default, to demand payment in full as provided herein or to otherwise exercise any other available remedies or rights upon the failure of Borrower to comply with the terms herein shall not constitute a waiver of Bank's rights to cxercise the same upon any subsequent failures of Borrower to strictly comply with the terms of the Note or this Amendment. 10. Governing Law; Waiver of Juty Trial. This Amendment shall be construed and governed in all respects by the statutes and case authority of the Commonwealth of Pennsylvania. Should Page 2 of 5 a dispute arise regarding this Amendment, the parties agree that jurisdiction and venue shall lie in the Court of Common Pleas of Cumberland County, Pennsylvania, or the United States District Court for the Eastern District of Pennsylvania, the principles of conflicts of laws notwithstanding. BORROWER AND BANK HEREBY WAIVE THE RIGHT TO TRIAL l3Y JURY IN ANY ACTION ARISING HEREUNDER OR OTHERWISE IN CONNECTION HEREWITH: 11. AZodifications and Assignment. This Amendment shall not be modified or amended except in writing and signed by the parties hereto. The rights, obligations and performances of Borrower under this Amendment shall not be assigned to nor assumed by any other party without the prior written consent of Bank, references to assigns elsewhere herein notwithstanding. 12. Draftsmanship. This Amendment has been drafted by Bank for the convenience of the parties hereto, and such fact shall be irrelevant in the construction and interpretation of the same; rather, this Amendment shall be construed and interpreted liberally for the purposes set forth herein. 13. Successors Bouud; Interpretation of Terms. This Amendment shall inure to and bind the parties hereto and their respective heirs, personal representatives, successors and assigns, as the case may be. Words of gender as used herein shall be interpreted'to include every other gender, and the singular shall include the plw•al, and the plural the singular when the sense so requires in order to effectuate the obligations of Borrower as set forth in this Amendment, the Note and the other instruments and documents evidencing the same. 14. Remedies Cumulative; Joint and Several Liability. The rights and remedies contained hereunder, together with the rights and remedies as contained in the Note and other documents relating to this transaction, shall be independent and cumulative to any other rights, remedies or actions at law or in equity which Bank may have or subsequently acquire against Borrower. The Undersigned, if more than one, shall be jointly and severally liable for alt obligations under the Note and this Amendment. 15. Counterparts. This Amendment may be executed in more than one counterpart as the parties may deem desirable; however, all such counterparts shall constitute but one and the same original. 16. Headnotea. The headnotes contained at the beginning of the paragraphs herein are inserted for the convenience of reference only and the same shall not be construed or interpreted to limit or restrict the provisions as set forth herein or considered in the construction and interpretation of this Amendment. 17. racsimile. A teleeopy, facsimile or electronically or thermographically-reproduced copy of this Amendment as fully executed and acknowledged shall be as valid and enforceable as the original hereof. Page 3 of 5 13. Guarantors' Consent and Estoppel. The terms of this Amendment are hereby expressly acknowledged and consented to by the undersigned guarantors of the Note, and the undersigned guarantors hereby waive any defense based upon the modification of the Note as provided herei~i, and tl~e joinder herein shall be interpreted and act as an estoppel against the same to challenge the validity or enforceability of the Guaranty Agreement on any legal or equitable basis because of the terms and provisions of this Amendment. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound in accordance with the provisions of the Uniform Written Acknowledgments Act (33 P.S. §l, et sec .) have hereunto set their respective hands aid seals on the date above first written. A'T'TEST: Secretary Llxt~ `~.~.:¢~.. Secretary ATTEST: ,Y.~ -,_. Assistant Secretary CMW/db BORROWER: KEYSTONE BIOFUELS, INC. By _....~ (SEAL) Race I .Miner, Founder/CEO By ~'~~z__----- (SEAL) Ben Wootton, Gentr+ol~i~er P~,~. ,,,~N .- BANK: FIRST NATIONAL BANK OF PENNSYLVANIA By ~ ~E...•-- (SEAL) Char es M. Wasson, Senior Vice President Page 4 of 5 ACKNOWLEDGMENT AND CONSENT OF GUARANTORS The undersigned, jointly and severally intending to be legally bound hereby, in accordance with the Uniform Written Acknowledgments Act (33 P S. § 1, ~ sig.), hereby acknowledge and consent to the foregoing Agreement this ~~ay of 2008. fitness !'rl ~~...----- Witness ~~ ~~- Race K. Miner Ben Wootton Page 5 of 5 SECOND AMENDMENT TO NOTE (Account ~i43891960) This Amendment to Note (hereinafter "Amendment") made this Jam' day of G,ur' ~ 2008, by and between: KEYSTONE BIOFUELS, INC., a Pennsylvania Corporation, 485 St. John's Church Road, Suite 110, Shiremanstown, Cumberland County and Commonwealth of Pennsylvania (hereinafter referred to for convenience of reference as "Borrower") AND FIRST NATIONAL BANK OF PENNSYLVANIA, a national banking association, with an office located in the City of Hermitage, County of Mercer and Commonwoalth of Pennsylvania (hereinafter referrod to as "Bank'; WITNESSETH, THAT WHEREAS, Bank is the holder of a debt evidenced by that certain Promissory Note dated October 24, 2006, whereby Borrower promised to pay to tho order of Bank the sum of Three Hundred Thirty Thousand Dollars and No Cents ($330,000.00) together with interest thereon (hereinafter inferred to as the "Note"}; and WHEREAS, the parties hereto desire to amend the Note to add an interest only period; NOW, THEREFORE, in consideration of the foregoing provisions, the mutual provisions herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do agree and hereby agree as follows: I. Principal Amount Owed. The parties hereto do hereby agree that as of the date of this Agreement, the outstanding balance due under the Note is Three Hundred Seventeen Thousand Ninety Four Dollars and Twenty Three Cents ($317,094.23) together with interest thereon. 2. Interest Rate. The per annum rate of interest payable pursuant to the terms of the Note is and shall be Seven and Six Hundredths percent (7.06°/®) fixed until October 24, 2016, thereaRer the interest rate will be reset to the then-existing "Prime Rate", as published from time to time in Tlie Wal! Street Journal, or any successor publication, plus one half percent (.50%), variable, per annum (the "Applicable Rate"). The Applicable Rate shall be calculated on a 365-360 day basis, as provided for in the Note. 3. Monthly Payments and Application of Same; Change of Applicable Paynurnt. Borrower promises to pay to the Order of Bank interest in arrears monthly, as billed in accordance with the Applicable Rate as stated above, beginning May 24, 2008 and the twenty fourth day of each Page 1 of 5 successive month thereafter through September 24, 2008; thereafter monthly principal and interest in the amount of Three Thousand One Hundred Sixteen Dollars and Fifty Five Cents ($3,116.55), as billed in accordance with the Applicable Rate as stated above, beginning October 24, 2008 and on the twenty fourth day of each successive month thereafter until such time as an increase or decrease in the Applicable Rate at which limo the payment shall ba recalculated to the amount nec~ary to fully amortize the outstanding principal balance and accrued interest, if any, over the remaining term of the loan.. A late charge of eight percent (8%) of the payment shall be assessed for each payment not received within 10 days after each month the payment is due. Monthly Applicable Payments shall be applied first to late charges as provided in the Note, if any, then to accrued interest and last to principal, and shall be paid to Bank at the place as provided in the Note, or at a different place, if required by Bank. 4. Term and Repayment. Notwithstanding the terms of the Note or other instruments and documents evidencing the obligation thereof, the entire principal balance and accrued interest, if any, shall be fully due and payable on October 24, 2021. 5. Reaffirmation and Waiver of Right of Presentment and Notice of Dishonor. Borrower hereby unconditionally reaffirms and acknowledges the obligations under the Note. Harrower waives the rights of presentment and notice of dishonor under the terms of this Amendment and reaffirms waiver of the same under the Note. 6. Incorporation by Reference; Default on Amendment. All of the terms, conditions, covenants, stipulations, prohibitions, events of default, remedies and other provisions, as contained in the Note, are hereby aclrnowledged by Borrower as existing and shall remain in full force and effect, except as the same may be inconsistent with the terms hereof, and the same are hereby expressly and totally incorporated herein as if set forth in full and shall survive the execution of this Amendment. Failure of the Borrower to make payments under the terms of this Amendment shall constitute an Event of Default for the purposes of the Note, and Bank shall have all remedies as set forth in the Note and this Amendment. 7. Incorporation by Reference of Warrant to Confess Judgment. Borrower hereby acknowledges that the Note contains a warrant or wan~ants of attorney to confess judgment, and the provisions of the same are incorporated herein and shall remain in full farce and effect and shall survive the execution of this Amendment. 8. Severabiiity. )f any provision of this Amendment is held to be illegal or unenforceable by any Court or other body of competent jurisdiction, then this Amendment shall be construed and interpreted as if such invalid or unenforceable provision were not included herein and the other provisions of this Amendment shall be enforceable to the fullest extent permitted by law. 9. No Waiver. The failure of Bank to declare an event of default, to demand payment in full as provided herein or to otherwise exercise any other available remedies or rights upon the failure of Borrower to comply with the terms herein shall not constitute a waiver of Bank's rights to Page 2 of 5 exercise the same upon any subsequent failures of Borrower to strictly comply with the terms of the Note or this Amendment. 10, Governing Law; Waiver of Jury Trial. This Amendment shall be construed and governed in alt respects by the statutes and case authority of the Commonwealth of Pennsylvania. Should a dispute arise regarding this Amendment, the parties agree that jurisdiction and venue shall lie in the Court of Common Pleas of Cumberland County, Pennsylvania, or the United States District Court for the Middle District of Pennsylvania, the principles of conflicts of laws notwithstanding. BORROWER AND BANK HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING HEREUNDER OR OTHERWISE IN CONNECTION HEREWITH. 11. Modifications and Assignment. This Amendment shall not be modified or amended except in writing and signed by the parties hereto. The rights, obligations and performances of Borrower under this Amendment shall not be assigned to nor assumed by any other party without the prior written consent of Bank, references to assigns elsewhere herein notwithstanding. 12. Draftsmanship. This Amendment has been drafted by Bank far the convenience of the parties hereto, and such fact shall be irrelevant in the construction and interpretation of the same; rather, this Amendmen# shall be construed and interpreted liberally for the purposes set forth herein. 13. Successors Bound; Interpretation of Terms. This Amendment shall inure to and bind the parties hereto and their respective heirs, personal representatives, successors and assigns, as the case may be. Words of gender as used herein shall be interpreted to include every other gender, and the singular shall include the plural, and the plural the singular when the sense so requires in order to effectuate the obligations of Borrower as set forth in this Amendment, the Note and the other instruments and documents evidencing the same. 14. Remedies Cumulative; Joint and Several LiabiUty. The rights and remedies contained hereunder, together with the rights and remedies as contained in the Note and other documents relating to this transaction, shall be independent and cumulative to any other rights, remedies or actions at law or in equity which Bank may have or subsequently acquire against Borrower. The Undersigned, if more than one, shall be jointly and severally liable for all obligations under the Note and this Amendment. 15. Counterparts. This Amendment may be executed in more than one counterpart as the parties may deem desirable; however, all such counterparts shall constitute but one and the same original. 16. Headnotea. The headnotes contained at the beginning of the paragraphs herein are inserted for the convenience of reference only and the same shall not be conshued or interpreted to limit or restrict the provisions as set forth herein or considered in the construction and interpretation of this Amendment, Page 3 of 5 16. Headnotes. The headnotes contained at the beginning of the paragraphs herein are inserted for the convenience of reference only and the same shall not be construed or interpreted to limit or restrict the provisions as set forth herein or considered in the construction and interpretation of this Amendment. 17. Facsimile. A telecopy, facsimile or electronically or thenmographically-reproduced copy of this Amendment as fully executed and acknowledged shall be as valid and enforceable as the originat hereof. 18. Guarantors' Consent and Estoppel. The tenors of this Amendment are hereby expressly acknowledged and consented to by the undersigned guarantors of the Note, and the undersigned guarantors hereby waive any defense based upon the modification of the Note as provided herein, and the joinder herein shall be interpreted and act as an estoppel against the same to challenge the validity or enforceability of the duaranty Agreement on any legal or equitable basis because of the terms a~ provisions of this Amendment. IN WITNESS WAEREOF, the parties hereto, intending to be legally bound in accordance with the provisions of the Uniform Written Acknowledgments Act (33 P.S. §1, et s„ eq.) have hereunto set their respective hands and seals on the date above first written. ATTEST: BORROWER: KEYSTONE BIOFUELS, INC. ATTEST: BANK: FIRST NATIONAL BANK OF PENNSYLVANIA By ~ v _ ~---- (SEAL) Assistant Sec ary Charles M. Wasson, Senior Vice President CMW/ml Page 4 of 5 By ""~ (SEAL) Ben T. Wootton, President ACKNOWLEDGMENT AND CONSENT OF GUARANTORS The undersigned, jointly and severally intending to be legally bound hereby, in accordance with the Uniform Written Acknowledgments Act (33 P.S. §l, e~ ~.), hereby acknowledge and con t to the foregoing Agreement this ,•t~ay of~i ii , 2008. ~ ( ~ Rac K. Miner Ben T. Wootton Page 5 of 5 EXHIBIT "D" To Complaint in Confession of Judgment X670,000.00 October 24, 2008 Harrisburg, Pennsylvania TERM NOTE C FOR VALUE RECEIVED, and intending to be legally bound, KEYSTONE. ®IOFUELS, INC., a Pennsylvania corporation, with offices at 485 SE. John's Church Road, Suite 110, Shiremanstown,. Pennsylvania 17011 (hereinafter called "Maker"), does hereby promise to pay, without defalcation, to the order of LEGACY BANK, A DIVISION OF FIRST NATIONAL BANK OF PENNSYLVANIA, (hereinafter called the "Payee', at 2800 Commerce Drive, P.O. Box 60947, Harrisburg. Pennsylvania 17106-8094T, or at such other place as the holder hereof may, from time to timer direct Maker in writing, the principal sum of Slx Hundred. Seventy Thousand Dollars ($670,000.00), lawful money of the United States of America, or such lesser amount as may have been advanced by Payee to or far the benefit of Maker under the terms of the Loan Agreement of even date between Maker and Payee (the. "Loan Agreem~tt"), together with interest on the outstanding. principal amount of this Note at the fixed rate of 8.95° per annum, at the times and in the manner as follows: Maker shalt. make monthly interest only payments on the outstanding principal balance for twelve (12} months, commencing November 24, 2008. Thereafter; commencing November 24, 2007, and continuing monthly thereafter on the same day of each month, Maker shall monthly pay to Payee fixed payments of principal ~` and interest in the amountof ~ 1 t ~ q 8 g', 4 b each. The final installment; unless sooner paid, shall be due and payable on or before October 24, 2013. Interest shall be calculated on the basis of the actual number of days in the current calendar year divided: by 380. Interest shalt be payable as provided herein.. All then accrued and unpaid interest shall also be payable where the entire principa# balance of this Note becomes due and. payable (whether by stated maturity, demand or acceleration) or, if earlier; when such principal: balancer is actuaky paid to Payee.. Interest shag accrue on the unpaid balance hereof at the rate provided for in this Note unftl the entire unpaid balance has been paid in full, notwithstanding the entry of any judgment agaihst Maker. Maker shall have the option of prepaying principal, in whole or in part; at any time(s), without penalty or premium. Any prepayments} shall be accompanied by payment of aN interest accrued hereunder to the date of prepayment. Each partial. prepayment shall: be applied- against the. installments of principal last (by date} due and payable; and no prepayment shah: postpone or interrupt payment of future installments of principal and interest, which shall continue to be due and payable until payment. hereof in full. Prepaid prinapat may not thereafter be reborrowed. If any payment hereunder is not paid when duer and continues unpaid for a period of ten(10) days thereafter, Maker agrees to pay to Payee as a late charge an amount computed at a rate of eight percent. (8.0°1b) of such past due amount. The late charge shall be in additlon to any interest due. Notwithstanding the foregoing, in no event shall any late charge be less than ten dollars ($10). The proceeds of the loan evidenced by this Nate are being disbursed by the Payee in accordance with the terms, conditions and provisions of the Loan Agreement, which Loan Agreement ismade a-part of this Note as if set forth herein in full. All of the agreements, conditions, covenants, provisions and stipulations contained in the Loan Agreement which are to be kept and performed by Maker, are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein, and. Maker covenants and agrees to keep and perform them, or cause them to be kept and performed, strictly in accordance with theic terms. This Note is a Note referred tv in the Loan Agreement: This Note, the Loan Agreement, and the related collateral documents, are referred to herein collectively as the "loan Documents", and the provisions thereof are incorporated herein by reference. Subject to any applicable notice and grace period(s), if the Maker shall fail to observe or perform any of the terms, agreements, covenants and conditions of the Maker contained herein or in any other Loan Document, the Payee, in its discretion, but without any duty to do so, and without waiving any default, may perform any of such terms, agreements, covenants and conditions, in whole or in part, and any money advanced or expended by the Payee in or toward the fulfillment of such terms, agreements, covenants and conditions shall b® due on demand and shall become a part of and be added to the indebtedness due under this Note, with interest to be paid thereon at the then current rate provided herein from the date of the respective advance or expenditure, and secured by the Security Agreement and the related collateral documents. Each of the following shall be an Event of Default hereunder. 1. If any monthly payment of principal and/or interest is not paid on the date when due; or 2. If Maker defaults in the payment or performance of this Note or any other Loan Docu- ment after the expiretion of any applicable nottce and cure period(s) or faits to perform or comply with any agreement with Bank after any applicable notice and cure period(s) ~ faib to perfomn or pay when due any material obligation owed to any third party after any applicable notice and cure period(s) absent a bona fide dispute concerning the same; or 3. If Maker is unable to pay its debts as they mature; becomes insolvent; voluntarily suspends transaction of its business or operations; make an assignment for the benefit of creditors; files a voluntary petition to reorganize or to effect a plan or other arrangement wi#h creditors; or has an involuntary petiton filed against it pursuant to the Bankruptcy Code or any amendments thereto; or apples for or consents to the appointment of a receiver or trustee of all or part of its property, institu#es liquidat'wn or dissolution proceedings; or 4. If there is entered against Maker a judgment, levy or lien of a material nature or if a writ or warrant of attachment, execution, garnishment, distraint, possession, or any similar process of a material nature shall be issued by any court against all or a part of the property of Maker, and such judgment, levy, lien, writ, warrant or other process remains unstayed, unbonded or unreleased for a period of thirty (30) days following entry or issuance; or 5. If any dissolution, merger, consolklation or reorganization proceedings is instituted by or against Maker; or 6. If there is a taking of possession of a substantial part of the property of Maker at the instances} of any governmental authority; or 7. If Maker fails to pay any income, excise, or other taxes of any nature whatsoever when due and payable or fails to remit when due to the appropriate govemmental agency or autho- rized depository any amount collected or withheld from any employee of Maker for payroll taxes, Social Security payments or similar payroll deductions, unless the same is beirxf contested by Maker in good faith, having reserved sufficient funds to pay such tax(es) and any interest and penalties should the contest be unsuccessful; or -2- 8. if the Maker fails to provide Payee with financial information as and when required under the Loan Documents. If an Event of Default shall occur hereunder, or an event of default as described in any other Loan Document(s), shall occur and be continuing beyond any applicable grace period, Payee, at its option and without further notice to Maker, may (a) raise the refs of interest accruing on the unpaid balance of the principal sum of this Note by four percentage {496} points above the rate of interest otherwise applicable, independent of whether Payee elects to accelerate the unpaid principal balance as a result of such default; and (b) declare immediately due and payable the entire unpaid balance of the principal sum of this Note with interest accrued thereon at the rate speafled to the date of default and thereafter at the rate provided herein from time to time, and all other sums due by Maker under the Loan Documents, anything in any of the Loan Documents to the contrary notwithstanding; and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to Payee in the Loan Documents. In such case, Payee may also recover ail costs of suit and other expenses in connection therewith, togeithsr with a reasonable attorney's commission for collection, together with interest on any judgment obtained by Payee at the rate provided herein from time to time, including interest at that rate from and after the date of any Sheriffs sale until actual payment is made by the Sheriff to Payee of the full amount. In the event of any default hereunder, the Payee shall have an immediate right of set-off aga~st aN liabilities to Maker including the right of set-off against any and all deposit accounts, which right of set-off shall be in additlon to and not in derogation of any right of set-off the Payee may otherwise have by reason of law or agreement. The remedies of Payee as provided in the Loan Documents and the warrants contained therein shall be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of Payee, and may be exercised as o#ten as occasion therefor shah occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof or of any other right or remedy. Except for any required notice(s) under the Loan Documenb, Maker hereby waives and releases all errors, defects and imperfections in any proceedings instituted by Payee under the terms of the Loan Documents, as well as all benef+ta that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execuution, or providing for any stay of execution, exemption from civil process, or extension of time for paytrrent. Maker agrees that any real estate that may be levied upon pursuant to a judgment obiained by virtue hereof, or any writ of execution issued thereon, may be so levied solely, in whole or in part, in any order desired by Payee. Maker hereby waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice of protest of this Note, and aN other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note, and agrees that its IiabiNty shah not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee. Maker consents to any and atl extensions of time, renewals, waivers or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to the release of the collateral or any part thereof, with or without substitution. -3- Payee shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Payee, and then only to the extent specificaly set forth in said writing. A waiver of one event shaft not be construed as conrinuing or as a bar to or waiver of any right or remedy to a subsequent event. IF AN EVENT OF DEFAULT SHALL OCCUR HEREUNDER, THE MAKER DOES HEREBY IRREVOCABLY AUTHORIZE AND EMPOWER ANY ATTORNEY OF ANY COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE TO APPEAR FOR THE MAKER AND ON ITS BEHALF AND TO CONFESS JUDGMENT AGAINST THE MAKER IN FAVOR OF THE PAYEE, WITH OR WITHOUT DECLARATION FILED, FOR THE UNPAID PRINCIPAL BALANCE HEREOF, TOGETHER WITH ALL AMOUNTS FOR WHICH THE MAKER MAY BE LIABLE TO THE PAYEE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, UNPAID INTEREST, COSTS AND OTHER EXPENSES OF SUIT AND REASONABLE ATTORNEY'S FEES, ALL AS AFORESAID. IF A COPY HEREOF, VERIFIED BY AFFIDAVIT, SHALL HAVE BEEN FILED IN SAID PROCEEDINGS, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, BUT SHALL CONTINUE, AND MAY BE EXERCISED AS AFORESAID, FROM TIME TO TIME AND AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL THE AMOUNTS DUE HEREUNDER. Notwithstanding anything to the contrary herein contained, the total viability of Maker for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by app cable law to be contracted for, charged or received, and if any paymer~s by Maker to Payee include interest in excess of such a maximum amount, Payee shalt apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shalt be refunded to Maker. Any such application or refund shat) not cure or waive any Event of Default. In determining whether or not any interest payable under this Note or the Loan Documents exceeds the highest rate permitted bylaw, any non-principal payment (except piayments specifically stated in this Note to be "interest', including without limitation prepayment premiums and late charges, shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest. If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable, it shall be ineffective only to the extent of such prohibition or unenforceability, and such prohibition or unenforceabitity shall not invalidate the balance of such provisbn to the extent it is not prohibited or unenforceable, nor invalMate the other provisions hereof, ail of which shat) be liberally construed in favor of Payee in order to effect the provisions of the Note. THE MAKER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ISSUES OF FACT IN ANY ACTION RELATING TO ANY RIGHTS OR OBLIGATIONS UNDER THIS NOTE OR OTHER DOCUMENTS RELATING TO THIS TRANSACTION. THE MAKER HEREBY AGREES THAT ANY ACTION OR PROCEEDING AGAINST {T TO ENFORCE THIS NOTE MAY BE COMMENCED IN STATE OR FEDERAL COURT IN ANY COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA IN WHICH THE PAYEE HAS AN OFFICE, AND THE MAKER WAIVES PERSONAL SERVICE OF PROCESS ANDAGREE THATA SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED OR CERTIFIED MAIL. -4- ~ ~ The Maker intends this to be a sealed instrument and to be legally bound hereby. This instrument has been executed in, and shall be governed by and construed according to the laws of, the Commonwealth of Pennsylvania. The term "Note" as used herein, shall mean the same as amended, modified or altered, from lima to time. Whenever used, the singular shall include the plural, the plural the singular and the use of any gender shall be applicable to all genders, and the words "Payee" and. "Maker" shall be deemed to include the respective heirs, personal representatives, successors and permitted assigns of Payee and Maker. This obligation shall be Legally binding upon the Maker and the successors and assigns of the Maker and the benefits hereof shall inure to the Payee and the successors and assigns of the Payee. IN WITNESS WHEREt~F, the Maker has duly executed this Note under seal the day and year first above written. ATT T: KEYS Blf3FUELS, INC. Allison A. Mine, Secretary R ce K. Mner, CEC) -5- AMENDMENT TO.NOTE (Account X91965}' <, This Amendment to Note (hereinafter "Amendment") made this ~ day of 7AN 2008, by and between: KEYSTONE BIOFUELS, INC., a Pennsylvania Corporation, 485 St. John's Church Road, Suite 110, Shiremanstown, Cumberland County and Commonwealth of Pennsylvania (hereinafter referred to for convenience of reference as "Borrower") AND I''IRST NATIONAL BANK OF PENNSYLVANIA, a national banking association, with an office located in the City of Hermitage, County of Mercer and Commonwealth of Pennsylvania {hereinafter referred to as "Bank"); WITNESSETH, THAT WHEREAS, Bank is the holder of a debt evidenced by that certain Promissory Note dated October 24, 2006, whereby Borrower promised to pay to the order of Bank the sum of Six Hundred Seventy Thousand Dollars and No Cents ($670,000.00) from the original note together with interest thereon (hereinafter referred to as the "Note"); and WHEREAS, the parties hereto desire to amend the Note to add an interest only period; NOW, THEREFORE, in consideration of the foregoing provisions, the mutual provisions herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do agree and hereby agree as follows: 1. Principal Amount Owed. The parties hereto do hereby agree that as of the date of this Agreement, the outstanding balance due under the Note is Six Hundred Sixty One Thousand Nine Hundred Two Dollars and Fifteen Cents ($661,902.15) together with interest thereon. 2. Interest Rate. The per annum rate of interest payable pursuant to the terms of the Note is and shall be Six and Ninety Five Hundredths percent (6.95%) fixed per annum (the "Applicable Rate"). The Applicable Rate shall be calculated on a 365-360 day basis, as provided for in the Note. 3. Monthly Payments and Application of Same; Change of Applicable Payment. Borrower promises to pay to the Order of Bank interest in arrears monthly, as billed in accordance with the Applicable Rate as stated above, beginning December 24, 2007 and the twenty fourth day of each successive month thereafter through February 24, 2008; thereafter monthly principal and interest in the amount of Eleven Thousand Nine Hundred Eighty Five Dollars and Ninety Six Cents ($11,985.96), as billed in accordance with the Applicable Rate as stated above, beginning March 24, 2008 and on the twenty fourth day of each successive month thereafter . A late Page 1 of 5 _~ charge of eight percent (8%) of the payment shall be assessed for each payment not received within 10 days after each month the payment is due. Monthly Applicable Payments shall be applied first to late charges as provided in the Note, if any, then to accrued interest and last to principal, and shall be paid to Bank at the place as provided in the Note, or at a different place, if required by Bank. 4. Term and Repayment. Notwithstanding the terms of the Note or other instruments and documents evidencing the obligation thereof, the entire principal balance and accrued interest, if any, shall be fully due and payable on October 24, 2013. 5. Reaffirmation and Waiver of Right of Presentment and Notice of Dishonor. Borrower hereby unconditionally reaffirms and acknowledges the obligations under the Note. Borrower waives the rights of presentment and notice of dishonor under the terms of this Amendment and reaffirms waiver of the same under the Note. 6. Incorporation by Reference; Default on Amendment. All of the terms, conditions, covenants, stipulations, prohibitions, events of default, remedies and other provisions, as contained in the Note, are hereby acknowledged by Borrower as existing and shall remain in full force and effect, except as the same may be inconsistent with the terms hereof, and the same are hereby expressly and totally incorporated herein as if set forth in full and shall survive the execution of this Amendment. Failure of the Borrower to make payments under the terms of this Amendment shall constitute an Event of Default for the purposes of the Note, and Bank shall have all remedies as set forth in the Note and this Amendment. 7. Incorporation by Reference of Warrant to Confess Judgment. Borrower hereby acknowledges that the Note contains a warrant or warrants of attorney to confess judgment, and the provisions of the same are incorporated herein and shall remain in full force and effect and shall survive the execution of this Amendment. 8. Severability. If any provision of this Amendment is held to be illegal or unenforceable by any Court or other body of competent jurisdiction, then this Amendment shall be construed and interpreted as if such invalid or unenforceable provision were not included herein and the other provisions of this Amendment shall be enforceable to the fullest extent permitted bylaw. 9. No Waiver. The failure of Bank to declare an event of default, to demand payment in full as provided herein or to otherwise exercise any other available remedies or rights upon the failure of Borrower to comply with the. terms herein shall not constitute a waiver of Bank's rights to exercise the same upon any subsequent failures of Borrower to strictly comply with the terms of the Note or this Amendment. 10. Governing Law; Waiver of Jury Trial. This Amendment shall be construed and governed in all respects by the statutes and case authority of the Commonwealth of Pennsylvania. Should a dispute arise regarding this Amendment, the parties agree that jurisdiction and venue shall lie in the Court of Common Pleas of Cumberland County, Pennsylvania, or the United States District Page 2 of S _~ Court for the Eastern District of Pennsylvania, the principles of conflicts of laws notwithstanding. BORROWER AND BANK HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING HEREUNDER OR OTHERWISE IN CONNECTION HEREWITH. 11. Modifications and Assignment. This Amendment shall not be modified or amended except in writing and signed by the parties hereto. The rights, obligations and performances of IIorrower under this Amendment shall not be assigned to nor assumed by any other party without the prior written consent of Bank, references to assigns elsewhere herein notwithstanding. 12. Draftsmanship. This Amendment has been draRed by Bank for the convenience of the parties hereto, and such fact shall be irrelevant in the construction and interpretation of the same; rather, this Amendment shall be construed and interpreted ,liberally for the purposes set forth herein. I3. Successors Bound; Interpretation of Terms. This Amendment shall inure to and bind the parties hereto and their respective heirs, personal representatives, successors and assigns, as the case may be. Words of gender as used herein shall be interpreted to include every other. gender, and the singular shall include the plural, and the plural the singular when the sense so requires in order to effectuate the obligations of Borrower as set forth in this Amendment, the Note and the other instruments and documents evidencing the same. 14. Remedies Cumulative; Joint and Several Liability. The rights and remedies contained hereunder, together with the rights and remedies as contained in the Note and other documents relating to this transaction, shall be independent and cumulative to any other rights, remedies or actions at law or in equity which Bank may have or subsequently acquire against Borrower. The Undersigned, if more than one, shall be jointly and severally liable for a!1 obligations under the Note and this Amendment. 15. Counterparts. This Amendment may be executed in more than one counterpart as the parties may deem desirable; however, all such counterparts shall constitute but one and the salve original. 16. Headnotes. The headnotes contained at the beginning of the paragraphs herein are inserted for the convenience of reference only and the same shall not be construed or interpreted to limit or restrict the provisions as set forth herein or considered in the construction and interpretation of this Amendment. 17. Facsimile. A telecopy, facsimile or electronically or thermographically-reproduced copy of this Amendment as fully executed and acknowledged shall be as valid and enforceable as the original hereof. Page 3 of 5 > > 18. Guarantors' Consent and Estoppel. The terms of this Amendment are hereby expressly acknowledged and consented to by the undersigned guarantors of the Note, and the undersigned guarantors hereby waive any defense based upon the modification of the Note as provided herein, and the joinder herein shall be interpreted and act as an estoppel against the same to challenge the validity or enforceability of the Guaranty Agreement on any legal or equitable basis because of the terms and provisions of this Amendment. IN WITNESS WHEREOF, the parties hereto, intending to be legally bound in accordance with the provisions of the Uniform Written Acknowledgments Act (33 P.S. § 1, et s_g.) have hereunto set their respective hands and seals on the date above first written. ATTEST: BORROWER: KEYSTONE BIOFUELS, INC. GCCc~.. ``~~~.:~ By -,-.,.- ~~.~.... --(SEAL) Secretary Race I{. Miner, Founder/CEO GG~v:.. `/y~~,µ,, By (SEAL) Secretary Ben Wootton, CentroHer Q~,,~,~„T- ATTEST: BANK: FIRST NATIONAL BANK OF PENNSYLVANIA ;% .~ By ~vf ~---'-' (SEAL) Assistant Secretary Charles M. Wasson, Senior Vice President CMW/db Page 4 of 5 1 ACKNOWLEDGMENT AND CONSENT OF GUARANTORS The undersigned, jointly and severally intending to be legally bound hereby, in accordance with the Uniform Written Acknowledgments A t (33 P.S. § 1, et sgg.), hereby acknowledge and consent to the forcgoing Agreement this ~~ay of , 2008. ~,~ Ll~ !~'~....-- ness G/~`~ i ness ~"f~ ~" 1..4-~--~ Race K. Miner Ben Wootton Page 5 of 5 _~ SECOND AMENDMENT TO NOTE (Account # 43891965) This Amendment to Note (hereinafter "Amendment") made this ~'~day of ~ ~' 2008, by and between: KEYSTONE BIOFUELS, INC., a Pennsylvania Corporation, 485 St. John's Church Road, Suite 110, Shiremanstown, Cumberland County and Commonwealth of Pennsylvania (hereinafter referred to for convenience of reference as "Borrower"} AND FIRST NATIONAL BANK OF PENNSYLVANIA, a national banking association, with an office located in the City of Hermitage, County of Mercer and Commonwealth of Pennsylvania (hereinafter referred to as "Bank"); WITNESSETH, THAT WHEREAS, Bank is the holder of a debt evidenced by that certain Promissory Note dated October 24, 2006, whereby Borrower promised to pay to the order of Bank the sum of Six Hundred Seventy Thousand Dollars and No Cents ($670,000.bO) together with interest thereon (hereinafter referred to as the "Note"); and WHEREAS, the parties heroto desiro to amend the Nato to add an interest only period; NOW, THEREFORE, in consideration of the foregoing provisions, the mutual provisions herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do agree and hereby agree as follows: 1. Principal Amount Owed. The parties hereto do hereby agree that as of the date of this Agreement, the outstanding balance due under the Note is Six Hundred Sixty One Thousand Nine Hundred One Dollars and Forty Three Cents ($661,901.43} together with interest thereon. 2. Interest Rate. The per annum rate of interest payable pursuant to the terms of the Nate is and shall be Six and Ninety Five Hundredths percent {6.95%) fixed per annum (the "Applicable Rate"). The Applicable Rate shall be calculated on a 365-360 day basis, as provided for in the Note. 3. Monthly Payments and Application of Same; Change of Applicable Payment. Borrower promises to pay to the Order of Bank interest in arrears monthly, as billed in accordance with the Applicable Rate as stated above, beginning May 24, 2008 and the twenty fourth day of each successive month thereafter through September 24, 2008; thereafter monthly principal and interest in the amount of Twelve Thousand Nino Hundred Forty Ona Dollars and Forty Eight Cents ($12,941.48), as billed in accordance with the Applicable Rate as stated abovq beginning Page 1 of S ~ ~ October 24, 2008 and on the twenty fourth day of each successive month themfter .A late charge of eight percent (8%} of the payment shall bo assessed for each payment not. received within 10 days after each. month the payment is due Monthly Applicable Payments shall be applied fist to late charges as provided in the Note, if any, then to accrued interest and last to principal, and shall be paid to Bank at the place as provided in the Note, or at a different place, if required by Bank. 4. Term and Repayment. Notwithstanding the terms of the Note or other instruments and documents evidencing. the obligation thereof, the entiro principal balance and accrued interest, if any, shall be hilly due and payable. on actober 24,.20] 3. 5. Reafnrrriatioo and Waiver o[ Right of Presentment and Notke of Dishonor. Borrower hereby unconditionally reaffirms and acknowled~ the obligations under the Note. Borrower waives the rights. of presentmorrt and notice of dishonor under the terms of this Amendment and reafRrma waiver of the same under the Note. 6. Incorporation by Reference; Dethnlt on Amendment. All of the terms, conditions, cova~ants, stipiulaaons,, prohibitions, events of daf~rlt remedies and other. provisions, as contained in thee. Nate, are hereby acknowledged by Borrower as existing and shall remain in full force and efihct, exce~tt as the earns may be inconsistent with the terms h~eoi and the same are hereby expressly and totally incor~r~ed heroin as if set forth. in full and shalt: survive the execution of this Amendment. Failure of the Harrower to make payments uryder the terms of this Araandm~t shall constitute an Bverrt of Default for the purposes of the Note, and Bank shall have alT r~ernedies as set forth in the Note and this Araendm~tt. 7. Incarporat~oin by Reference of Warrant to Conhas Judgment. Borrower hereby acknowledges that the Note contains a wansnt or warrants of attorney to confess juarrt, and the provisions of the same era incord herein and shall remain in full force and eflrect and shall survive the execution of this Am~dment. 8. SeverabiNty. If any provision of this Amendment is held to be illegal or unenforceable by any Court or other body of competent jurisdiction, then this. Ammrdment shall' be construed: and inter' as if snch invalid or unenforceable provision were not. inchuled herein and the other provisions of this Amendment shall be enforceablato the fullest extent permitted bylaw. 9. No Waiver. The failure of Bank to declare an event of default, to demand payment in flril ae provided herein or to otherwise exercise any other available remedies or rights upon the failure of Borrower to comply with the terms herein shall net constitute. a waiver of Bank's rights to exercise the same upon any subsequent failures of Borrower to strictly comply with the- terms. of the Note or this Amendment. 10. Governing Law; Waiver of Jnry Trial. This Amendment shall be construed and governed. in all respects by the statutes and. case. authority of the Commonwealth of Pennsylvania. Should a dispute arise regarding this Amendment, the parties agree. that jurisdiction and venue shall lie in Page 2 of 5 4 the Court of Common Pleas of Cumberland County, Pennsylvania, or the United States District Court for the Middle District of Pennsylvania, the principles of conflicts of laws notwithstanding. BORROWER AND BANK HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING HEREUNDER OR OTHERWISE IN CONNECTION HEREWITH. 11. Modifications and Assignment. This Amendment shall not be modified or amended except in writing and signed by the parties hereto. The rights, obligations and performances of Borrower under this Amendment shall not be assigned to nor assumed by any other party without the prior written consent of Bank, references to assigns elsawhero herein notwithstanding. 1 Z. Draftsmanship. This Amendment has been drafted by Bank for the convenience of the parties hereto, and such fact shall be irrelevant in the construction and interpretation of the same; rather, this Amendment shall be construed and interpreted liberally for the purposes set forth herein. 13. Successors Bound; Interpretation of Terms. This Amendment shall inure to and bind the parties hereto and their respective heirs, personal representatives, successors and assigns, as the case may be. Words of gender as used herein shall be interproted to include every other gender, and the singular shall include the plural, and the phiral the singular when tho sense so requires in order to effectuate the obligations of Borrower as set forth in this Amendment, the Note. and the other instruments and documents evidencing the same. 14. Remedies Cumulative; Joint and Several Liability. The rights and remedies contained hereunder, together with the rights and remedies as contained in tho Note and other documents relating to this hansaction, shall be independent and cumulative to amr other rights, remedies or actions at law or in equity which Bank may have or subsequently acquire against Borrower. The Undersigned, if morn than one, shall be jointly and severally liable for all obligations under the Note and this Amendment. 1 S. Counterparts. This Amendment may be executed in more than one counterpart as the parties may deem desirable; however, all such counterparts shall constitute but ono and the same original. l6. Headnotes. The headnotes contained at the beginning of the paragraphs herein era inserted for the convenience of reference only and tho same shall not be construed or interpreted to limit or restrict the provisions as set forth herein or considered in the construction and interpretation of this Amendment. 17. Facsimile. A telecopy, facsimile or electronically or thermographically-reproduced copy of this Amendment as fully executed and acknowledged shall be as valid and enforceable as the original hereof. Page 3 of S ' ) ) 18. Guarantors' Consent and Estoppel. The terms of this Amendment are hereby expressly acknowledged and consented to by the undersigned guarantors of the Note, and the undersigned guarantors hereby waive any defense based upon the modification of tho Note as provided herein, and the joinder herein shall be interpreted and act as an estoppel against the same to challenge tho validity or enforceability of the Guaranty Agreement on any legal or equitable basis because of the terms and provisions of this Amendment. IN WITNESS WH1I:REOF, the parties hereto, intending to be legally bound in accordance with the provisions of the Uniform Written Acknowledgments Act (33 P.S. § 1, et se .) have hereunto set their respective hands and seals on the date above first written. ATTEST: Assistant Secre ary CMW/ac Hy ~^~----~ r (SEAL) Ben T. Wootton, President HANK: FIRST NATIONAL BANK OF PENNSYLVANIA B .,~~ W SEAL Y ( ) Charles M. Wasson, Senior Vice Fresident Page 4 of 5 ATTEST: BORROWER: KEYSTONE BIOFUELS, INC. -.• 1 ACKNOWLEDGMENT AND CONSENT OF GUARANTORS The undorsigned, jointly and severally intending to be legally bound hereby, in accordance with the Uniform Written Acknowledgments Act (33 P.S. §1, ~ ~.), hereby acknowledge and cons to the foregoing Agreement this 2s day of 6,~ a ~ 2008. c //~~ y 1 0.^~ Witnes Rac Miner Witness Ben Wootton Page 5 of 5 ~/ EXHIBIT "E" To Complaint in Confession of Judgment .~; 1 LOAN AGREEMENT This Loan Agreement ("Agreement")made this 2`{ day of October, 2006, by and between KEYSTONE BIOFUELS, INC., a Pennsylvania corporation ("Borrower°), and LEGACY BANK, A DIVISION OF FIRST NATIONAL BANK OF PENNSYLVANIA ("Bank"). Borrower heroby applies to Bank for a $5,000,000 secured term loan ("Loan A"), a $330,000 secured term loan (Loan 87 and a $870,000 secured temp loan ("Loan C", and together with Loan A and Loan B, individually a "Loan' and collectively, the "Loans"), and Bank agrees to make such Loan to Borrower on the terms of this Agreement, to be evidenced, among other things, by one or more executed promissory notes (individually and collectively the "Note"}, and with the following basic terms: I. Loan A• Amount: $5,000,000 Interest Rate(s): Fixed at 7.06% per annum for ten (10) years; thereafter, variable and indexed to the Wall Street Joum~ prime rate plus '~°~, adjusted quarterly. Term: Fifteen (15) years (six month draw period). Repayment Schedule: Twelve (12) monthly interest only payments. Thereafter, One Hundred Sixty Eight (188) monthly principal and interest payments, adjusted at Bank's option to reflect any change(s) in the applicable interest rata. Amount: $330,000 Interest Rate(s): Fixed at 7.06% per annum for ten (10) years; thereafter, variable and indexed to the WaM Street Journal prime rate plus '/:°~. Term: Fifteen (15) years. Repayment Schedule: One Hundred Eighty (180) monthly prindpal and interest payments, adjusted at Bank's option to reflect any changes} in the applicable interest rate. I. Loan C• Amount: $670,000 Interest Rate: Fixed at 8.95% per annum.' Term: Seven (7) years (Six month draw period.) Repayment Schedule: Twelve (12) monthly interost only payments. Thereafter, seventy two (72) monthly principal and interest payments. .~ - - ~, The Borrower and Guarantors, as hereinafter defined, acknowledge reading all of the terms, provisions, agreements, covenants and warranties of this Agreement, the Notes and the Security Documents in connection with the Loans, and, in consideration of the Bank agreeing to make the j Loan, and intending to be legally bound hereby, warrant, represent, covenant and agree, jointly and ( severally, that: 1. BUSINESS. The Borrower is in the business of producing and marketing biodiesel fuel ("Business"). The Borrower is a Pennsylvania corporation. 2. USE OF PROCEEDS. The Borrower will diligently conduct the Business substantially as now being conducted. The purpose of Loan A is to provide Tong-term financing for Borrower at a commercial property located at 485 St. John's Church Road, Shiremanstown, Pennsylvania 17011. Funds will be used for machinery and equipment ($4,370,000), to refinance debt ($560,000) and an escrow account for cost overruns {$70,000). Loan B shall be used only to refinance debt for original plant equipment. Loan C shall be used only to provide working capital. Loan Proceeds of Loan A shall be placed into a Bank escrow account (the "Escrow'? with the initial draw to pay and outstanding debt or obligations, per Borrower's schedule. Each additional withdrewal(s) from the Escrow will be supported by a written document stating the amount and purpose thereof. 3. COLLATERAL. As security for the Loans, the Borrower and the Guarantors will deliver or cause to be deNvered to the Bank the following collateral and/or duly executed instruments of security or guaranty ("Security Documents"). The Loans shall require the unconditional personal guaranty of Race K. Miner and Ben T. Wootton, jointly and severaNy (the "Guarantors'. The Loans shall be collateralized by (i) first, second and priority security interests in and lien on all of the Borrower's assets, including accounts, contract rights, documenb, instruments, inventory, machinery and equipment, chattel paper, fixtures and general intangibles, now existing or hereafter arising, and all cash and non-cash proceeds thereof, (if) an assignment of Iffs insurance in the minimum amount of $8,000,000 on the fife of Race K. Miner, and (iii) an assignment of life insurance in the minimum amount of $6,000,000 on the life of Ben T. Wootton, (collectively, the "Collateral"). A landlord's consent and waiver will bg required for each leased location(s). A USDA loan guananty must be provided in the amount of 80°i6 of Loan A, on terms acceptable to Bank. Confkmation of the approval(s) of the USDA guaranty must be in hand prkx to the first advance of proceeds of Loan A To the extend of any conflict(s}, the terms and conditions of of for the USDA guaranty shall supersede and control over the terms and conditions of this Agreement with respect to Loan A. A DCED loan guaranty must be provided for Loans B and C in an amount(s) acceptable to Bank. Confirmation of the approval(s) of the DCED guaranty must be in hand prior to the first advance(s) of proceeds of Loans B and C. To the extent of any conflict(s), the terms and conditions of or for the DCED loan guaranty shall supersede and control over the terms and conditions of this Agreement with respect to Loans 8 and C. 4. REPORTS TO BANK. The Borrower and the Guarantors will deliver to the Bank the following reports: a. The Borrower shall furnish Bank within 90 days after the end of each fiscal year with (i) annual CPA-reviewed financial statements prepared in accordance with generally accepted accounting principles and practices consistently applied and containing at a minimum, a balance sheet and a profit and loss statement reflecting the financial condition of Borrower as of each fiscal year end and (i) annual budgets and business plans. Also, the Borrower shall fumish Bank with federal tax returns when filed. Also, Borrower shall fumish Bank with quarterly CPA-compiled -z- • 1 ^ - . i financial statements and quarterly in-house prepared financial statements and accounts receivable ~ and accounts payable listings and agings certified by management within 1 ~ days from the end of each fiscal quarter. b. The Guarantors shall furnish the Bank with annual personal financial statements within 90 days of year end and reviewed feder~ income tax returns within ~ days of filing. c. Such other reports as may be requested by the Bank from time to time, inform and substance satisfactory to the Bank. 5. AFFIRMATIVE COVENANTS. The Borrower will: a. Insurance. Maintain insurance coverages for the Business and the Collateral which are in such amounis and wish such carriers as are acceptable to the Bank, and deliver to the Bank acceptable proof of such insurance prior to disbursement of loan funds. Borrower will provide to Bank satisfactory hazard insurance coverage on the Collateral in an amount(s) at leant equal to the outstanding balance of the Loan or the replacement value of the Collateral (whichever is greater), including fire, windstorm, lightning, hail, explosion, riot, civil commotion, aircraft, vehicle, marine, smoke, builder's risk during construction and property damage, naming the Bank as loss payee and additional insured. A fidelity bond(s) Is to be provided for the positions of officials who have access to the funds of the Borrower equal to the maximum funds on hand at any time. Worker's compensation insurance must be carried in accordance with state law. b. Taxes. Duly and timely pay and discharge aN taxes or other claims which might become a lien upon any of its property except to the extent that such items are being in good faith appropriately contested with adequate reserves therefor having been reserved on Borrower's books in accordance with C3AAP. c. P o i .Maintain, preserve, and keep its propert~s in good repair, working order and condition, ~ reasonable wear and tear excepted, and make all reasonable repairs, replacements, additions, betterments and improvements thereto. d. Coroorate E is~c tence. Maintain its corporate existence and aA licenses, permits and approvals necessary in the conduct of the Business other than those the faikue to maintain of which would rot be reasonably likely to have a material adverse effect on Borrower's business, assets or condition, financial or otherwise (a "Material Adverse Effect"'), and comply with all statutes, rules and regulations, the non-compliance of which would have a Material Adverse Effect. e. Issuance Taxes. Pay all stamp or issuance taxes, if any, payable by reason of the execution, delivery or issuance of this Agreement, the Notes or Security Documents under any app cable ordinance or statute now existing or hereafter enacted, and the Borrower will at all times indemnify and hold harmless the Bank against any liability in respell thereof. f. Audits by Bank. Permit the Bank and its duly authored agents to make, or cause to be made, reasonable inspections and audits of any books, records and papers of the Borrower to make extracts therefrom at aN such reasonable times following no less than two (2) business days' prior notice (except prior notice need not be given if an Event of Default has occurred i and is continuing) and as often as the Bank may reasonably require. g. Manas~err~nt. Maintain the current management of the Borrower or other management reasonably satisfactory to the Bank, and furnish to the Bank within five (5) days of any -3- _~' election or appointment of officers or directors written notice of any change of such officers and directors. h. N. otlce. Notify Bank promptly of any default or any event or occurrence that but for the passage of time or giving of notice on both would constitute a default. Bankinc Relationship. Establish and maintain its primary deposit relationship with Bank. j. Financial Covenants. Maintain the following financial ratios and levels, to be tested annually: Tangible worth must exceed $700,000 at all times. ii. Minimum Oebt Service Coverage Ratio of 1.20X at all times. The Debt Service Coverage Ratio (l.e., the ratio of net income, prior to gaiMoss on sale of assets, plus depreciation plus interest expense minus unfunded capital expenditures/Annual Debt Service based upon the Borrower's annual financial statemenis) for Borrower must equal at least 1.20x by year-end 2007, and for each successive year-end thereafter until the Loan is paid in full. Unfunded capital expenditures are defined as capital expenditures that are funded with cash. k. Further Assurancers. At any time upon request of Bank, exewte and deliver to Bank, in corm to be satisfactory to Bank, such additbnal documentation in respect to the indebtedness and liability of Borrower to Bank contemplated under the terms of this Agreement as Bank shall deem reasonably necessary to comply with the provisions or requirements of the Uniform Commercial Code as the same may be in effect in the Commonwealth of Pennsylvania. I. USDA Guaranty. Comply with all terms and conditions required to provide and maintain the USDA Guaranty, including but not limited to the equity requirement (10'16 equity). m, DCED Guaranty. Comply with aN terms and conditions required to provide and maintain the DCED Guaranty. n. <Oeinion Letter. Provide a favorable opinion of Borrower's counsel with respect to the matters addnsssed in paragraph 7. 8. NEGATIVE COVENANTS. The Borrower will not: a. Indebtedness. Create, incur, assume or permit to exist any borrowing(s) or lend~g(s) from any other firm(s), corporation(s) or other person(s) in excess of $50,000 in the aggregate without the Bank's prior written approval. b. Combinations. Enter into any merger, consolidation, partnership or joint venture with or acquire any or any part of the business or assets of any person, firm or corporation or sell, transfer, lease or otherwise encumber or dispose of all or any part of its fixed assets or properties without the Bank's concurrence. Borrower wiH not invest in additional fixed asset purchases in an annual aggregate of more than $50,000 without the Bank's concurrence. The disposition of fixed assets serving as collateral for Loan A must also have the concurrence of USDA Rural Devek~pme~nt. -4- c. Loans. Lend or advance money, credit or property to any firm(s), corporation(s) or person(s) or co-sign, assume, guarantee or otherwise become liable for the obligations, liabilities or indebtedness of any firm, corporation or other person, on or after the date hereof without the Bank's prior written approval. Outside loans/advancea to stockholders, owners, officers, or affiliates require the prior written consent of the Bank. Loans from stockholders, owners, officers or affiliates must be subordinated. to the guaranteed loan or converted to stock. No payments are to be made on these debts unless Loan A is current and in good standing. Any creditor(s) must postpone principal payments on debts, if any, and agree that interest payments wilt also be postponed upon the occurrence and during the continuance of an Event(s) of Default. d. Create lProhibitt Encumbrances. Without Bank's prior written approval, which is not to be unreasonably withheld, and except for purchase money liens securing permitted indebtedness, create, incur, assume or to exist, any mortgage, pledge, assignment, conditional sale or other title retention agreement, lien, charge or encumbrance of or upon, or security interest in, any of its properties or assets, now owned or hereafter acquired, securing any indebtedness or other obligatkm(s) o~ enter into any agreement(s) prohibiting the creation or assumption of any mortgage, pledge assignment, conditional sale or other title retention agreement, {fen, charge or encumbrance of or upon, or security interest in, any of its properties or assets, now awned or hereafter acquired, securing any indebtedness or other obligation(s). Borrower will not sell, transfer or assign to any firm, corporation or other person its accounts, notes or trade acceptance receivable. e. Investments. Make, permit or suffer to exist, any investment(s) in or otherwise establish or create or permit the establishment or creation of any new company or affiliate without the Bank's prfor written approval. f. Impairment of Collateral. Permit anything to be done that may impair the value of the collateral afforded or Intended to be afforded by this Agreement or the Security Documents. g. Withdrawals or Q,~y,~ends. Dividend payments wiU be limited to an amount that, when taken, will not adversely affect the repayment ability of the Borrower. No dividend payments will be made unless (1) an after-tax profit was made in the preceding fiscal year, (2} the Borrower is and will remain in compliance with covenants of this Agreement and the USDA Conditbnal Commitment, (3) afi Borrower debts are paid to a current status, and (4) prior written concurrence of the Bank is obtained. This is not intended to apply to dividend payments to cover personal tax IiabNity resulting from profitability of the business. h. Officer's Salaries and Bonuses. Compensation of officers and owners wiN be limited to an amount that. when taken, will not adversely affect the repayment ability of the Borrower. This amount may not be increased year to year un~as (1) an after-tax profit was made in the preceding fiscal year, (2) the Borrower is and will remain in compliance with covenants of the this Agreement and the USDA Conditional Commitment, (3) ail Borrower debts are paid to a current status, and (4) prior written concurrence of the Bank is obtained. i. Leases. Make or enter into any new or additional lease(s) of real or personal property without the Bank's prior written approval except in an amount(s) included in permitted indebtedness. j. Chances in Business. Manar~ement or Ownersh~. Make or permit to be made any change(s) in the nature, character, conduct or structure of the Borrower`s business as conducted on the data hereof or in the management or ownership thereof. -5- J 1 7. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and warrants, on a continuing basis, to the Bank that: a. Organization. The Borrower is a corporation duly organized, vaNdly existing and in good standing under the laws of the Commonwealth of Pennsylvania and is qualified to do business and in good standing under the laws of each jurisdiction where qualification is necessary based on the nature of its businesses} and the location(s) of its assets or properties. b. Enforceability of Documents. This Agreement, the Note and the Security Documents have been duly authorized, executed and delivered and constitute the valid and legally binding obligations of the Borrower, enforceable in accordance with their terms. c. Legality of Documents. The execution and delivery of this Agreement, the Note and all Security Documents and performance thereof will not violate any provision of law or of the charter or by-laws of Borrower, or any agreement, indenture or instrument to which the Borrower is a party or its properties or assets may be bound or affected or of any other agreement to which the Borrower is a party. d. Pending or Threatened Litigation. There are no outstanding judgments, actions or proceedings pending before any court or governmental authority, bureau or agency with respect to or threatened against or affecting the Borrower. 8. No Defaults. The Borrower is not in default under, or in violation of, nor will the execution and delivery of this Agreement, the Nota or the Security Documents constitute a default unde- or violation of any term of any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment to which it is a party or by which it is bound, or by which any of the properties or assets owned by or used in the conduct of its buain~s is affected. The operations of the Borrower comply in all material respect with alt applicable laws, ordinances and regulations. f. No Onerous Agreements. Neither the Borrower nor the Guarantor is a party to or bound by, nor are any of the properties or assets owned by it or used in the conduct of its business affected by, any agreement, ordinance, resolution, decree, bond, note, indenture, order or judgment, or subject to any charter or other corporate resMction, which materially and adversely affects its business, assets or condition, flnanciat or otherwise. g. Financial $~atemer>ts. All financial information heretofore furnished to the Bank are true, correct and complete and present fairly the flnancial condition of the Borrower and the Surety as at the dates thereof and for the periods covered thereby, including contingent liabiiitfes of every kind, which financial condition has not materially adversely changed since the date of the most recently dated balance sheet of the Borrower and the Guarantors heretofore furnished to the Bank. h. Power and Authority. The Borrower has the power to execute and deliver this Agreement, the Notes and all Security Documents and have taken all necessary action to authorize the execution, delivery and performance of the same. i. Pro ie . The Borrower has good and marketable title to ail of its assets subject to no liens, encumbrances and objections, except as have been disclosed to and approved by the Bank. -6- i j. Taxes. The Borrower has filed all necessary tax returns to date and paid all taxes heretofore due and payable. k. Emptovee Benefit Plans. (i) Each employee benefit plan of Borrower, as defined in the Employee Retirement Income Security Act of 1974, as amended, ("ERISA'~ is in compliance with all applyable law and regulation, (ii) no "Reportable Eventp as defined in ERISA has occurred with regard to any such plan, and (i~) Borrower has not incurred any material accumulated funding deficiency or incurred any liability to the Pension Guaranty Board, other than for premiums not yet due and payable, with regard to any such plan. i. Environmental Matters. Borrower does not maintain, store or dispose any hazardous materials, as defined under applicable law, upon any of real property owned or controlled by Borrower, or transport any hazardous materials, except in accordance with applicable law and regulation. 8. EVENTS OF DEFAULT. The occurrence of any one or more of the following events or conditions shall constitute an Event of Default hereunder. a. Failure to make any payment of prtncipaland/or interest in respect of the Loan on the date the same becomes due and payable; or b. Failure by the Borrowe- or the Guarantor to perfonn any other term, condition or covenant of this Agreement, the Note, any Security Document or any other agreement, instrument or document delivered pursuant hereto or in connection herewith or therewith; or c. (i) Failure to perform any material term, condiflon or covenant of any note, loan agreement, guaranty, mortgage or other instrument or agreement in connection with the borrowing of money or the obtaining of advances or credit to which the Borrower is a party or by which it is bound, or by which any of its properties or assets may be affected and such failure(s) continues beyond any applicable nonce and cure period(s) (a "Debt instrument', so that, as a result of any such failure to perform the indebtedness included therein or secured or covered thereby shah have been declared due and payable prior to the date on wh~h such indebtedness would otherwise become due and payable; or (ii} any event or condition referred to in any Debt Instrument shah occur or fail to occur, so that, as a result thereof, the indebtedness included therein or secured or covered thereby shall have been declared due and payable prior to the data on which such indebtedness would otherwise become due and payable; or (ip} any indebtedness included in any Debt Instrument or secured or covered thereby fn an amount is not paid when due; or d. Any representation or warranty made in writing to the Bank in this Agreement, the Note or Security Documents or in connection with the making of the Loan or any certificate, statement or report made in compliance with this Agreement, shall have been false in any material respect when made; or e. The Borrower, the Guarantors or any endorser or guarantor hereof shall make an assignment for the benefit of creditors, file a petition under the Federal Bankruptcy Code or any similar law, state or federal, be adjudicated insolvent or bankrupt, petition or apply to any tribunal for the appointment of a receiver, or trustee or a custodian for it or a substant~l part of its assets, or shall commence any proceeding under any bankruptcy, reorganizaflon, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or if there shall have been filed any such petition or appNcatbn, or any such proceeding shall have been commenced against it, which remains undismissed for a period of sixty (60) days or more; or the -7- Borrower or endorser or guarantor by any act or omission shall indicate its consent to approval of or acquiescence in any such petition, application or proceeding or the appointment of a receiver or trustee or a custodian for it or any substantial part of any of its properties, or shall suffer any such receivership, trusteeship, or custodianship to continue undischarged for a period of sixty (60) days or more; or f. Any judgment of a material nature against the Borrower or the Guarantors, or any attachment, levy or execution against any of its properties for any amount shall remain unpaid, unstayed on appeal, undischarged, unbonded, uninsured or undismissed for a period of thirty (30) days or more; or g. The Borrower or the Guarantors shall be unable, or admit its inability, to meet its obligations as they come due or failure of Borrower generally to pay its or his debts as they become due. h. Occurrence in Bank's sole and independent discretion, reasonably exercised, and continuance uncured of a Material Adverse Effect. 9. REMEDIES. In the event of the occurrence of any Event of Default, the entire unpaid balance of the principal of and interest on the Loan shall immediately became due and payable at the option of Bank without further notice, presentment, protest or demand to the Borrower or the Guarantors and the Bank may, but shall not be required to (i) proceed to apply to the payment of the Loan the balance to the credit of any account or accounts maintained with the Bank by the Borrower or the Guarantors and ail property of Borrower or the Guarantors now or at any time in Bank's pos- session in any capacity whatsoever (set-off) and (ii) seN all or any part of the coNaterel security in accordance with the Pennsylvania Uniform Commercial Cade and the Security Documents. Should an event or condition occur which, but for the giving of notice or passage of time or both, would constitute an Event of Default under this Agreement, the Note or the Security documents, the Bank shall thereupon be immediately relieved of any obligation to make loans to or otherwise extend credit to the Borrower. The Bank may exercise any other right or remedy hereby granted or allowed to it by law including but not limited to the rights and remedies of a Secured Party under the Uniform Commercial Code of Pennsylvania and each and every right and remedy hereby granted to the Bank or allowed to it by law shall be cumulative and not exclusive the one of the other and may be exerdsed by the Benk from time to time and as often as may be necessary. The Bank shah have at any time, in its discretion, the right to enforce collection and payment of any of the collateral security by appropriate action or proceedings, and the net amounts received therefrom, after deduction of all costs and expenses incurred in connection therewith, shay be applied on account of the Loan and any other indebtedness or liabilities of the Borrower aforesaid, all without notice to the Borrower. The Bank shall not be required to marshal) any security or guarantees or to resort to the same in any particular order. 10. GENERAL. a. Generally Accepted Accounting Principles, All accounting terms used herein shall, except as specifically provided herein, be determined in accordance with generaNy acceptable accounting principles consistently applied. b. Survival of Warranties. All agreements, representations and warranties made herein shall survive the delivery of this Agreement. -8- 1 c. Modification of Documents. No modification or waiver of any provision of this Agreement, the Note, the Security Documents or other instruments or consent to any departure by the Borrower from any of the terms or conditions thereof, shall in any event be effective unless it shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Borrower or the Guarantor in any case shall, of itself, entitle the Borrower to any other or further notice or demand in similar or other circumstances. d. Rights Cumulative. Each and every right granted to the Bank hereunder or under any other document delivered hereunder or in connection herewith, or aik~nred it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of the Bank to exercise, and no delay in exercising, any right shah operate as a waiver thereof, nor shag any single or partial exercise of any right preclude any other or future exercise thereof or the exercise of any other right. a. Construction and Severability. This Agreement, the Note and the Security Documents and the rights and obligations of the parties shall be construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania. The provisions of this Agreement are severable and if any clause or provision shall beheld invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity of unenforceabiliiy shah affect only such clause or provisbn, or part thereof, in such Jurisdiction and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision in this Agreement in any jurisdiction. f. Notes. Notices by one party to the other shall be in writing and shall be deemed to have been validly given at the time when posted in the U.S. malls, postage prepaid, or hand delivered to the following address or to any alternate address designated in writing by the recipient: Bank: LEC3ACY BANK, A DIVISION OF FIRST NATIONAL BANK OF PENNSYLVANIA 2600 Commerce Drive P.O. Box 60947 Harrisburg. Pennsylvania 17106-60947 Attn: Jeffrey W. Myers Senior Vice President Borrower: KEYSTONE BIOFUELS, INC. 485 St. John's Church Road, Suite 110, Shiremanstown, Pennsylvania 17011 Attn: Race K. Miner President g. Exoenses of Bank. The Borrower shall pay to USDA a $80,000 guaranty fee and the annual guaranty fee(s) and ail fees and expenses reasonaby incurred by th® Bank in connection with the preparation, execution, delivery and performance of this Agreement, the Note, the Security Documents and all other instruments executed in connection herewith or in connection with the collection of the indebtedness hereunder, or any part thereof, or the perfection, protection and -9- ~', 1 r maintenance of the Bank's interest in any collateral. These fees and expenses shall include, without l -irnitation, reasonable fees and disbursements of legal counsel for the Bank. h. Binding Effect. This Agreement and any other documents and instruments delivered or required to be delivered pursuant hereto shall inure to the benefit of and shall be binding upon the parties hereto and their heirs, executors, administrators, personal representatives, successors and assigns of the parties hereto. Borrower may not assign its rights or obligations hereunder without the prior written consent of Bank. i. Cross Default. An Event of Default hereunder shah, at the Bank's option, automaticalry trigger a default of any other present or future obligation of Borrower or any endorser, surety or guarantor of the Note. j. Cross Collateral. The collateral for the Loan shall secure all present and future obligations, direct or contingent, of Borrower to Bank. k. In .Borrower agrees to defend, indemnity and hold the Bank harmless against any claim, action, proceeding, loss or IiabNity of any type which may arise or which the Bank may incur as a result of this Agreement or the credit accommodation contemplated hereby, including without limitation, any liability under appflcabia environmental law or regulation, unless caused by Bank's willful misconduct or negligence. This indemnity shall suniwe the termination of this Agreement and repayment of any indebtedness of Borrower to Bank. I. Written Commitment. The terms and conditbns of the commitment letter dated (by Banks August 9, 2008 era incorporated herein. CapitaNzed terms used herein without definition that are defined therein shall have the same meanings, in the event of any confNct, the provisions of this Agreement shall control. m. Waiver of Jury Trial. THE BORROWER AND THE GUARANTORS HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY ISSUES OF FACT IN ANY ACTION RELATING TO ANY RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR OTHER DOCUMENTS RELATING TO THIS TRANSACTION. -10- -1 I N WITNESS W HEREOF, the parties have caused this Agreement to be duly executed on the date first set forth above. A ST: , , Allison A. Mner, Secretary KEYSTONE OFUELS, INC. By: - R K. Mner, CEO "Borrower" WITNESS: (SEAL) K. AAiner (SEAL) Ben T. Wootton AGuarantors" LEGACY BANK, A DIVISION OF FIRST NATIONAL BANK OF PENNSYLVANIA By: Je of Vice President ABankA -11- .i VERIFICATION First National Bank of Penns lvania, including S ecial Assets Officer and duly authorized representative of~egacy Bank, J. Martin Dell, p of First National Bank of Pennsylvania, deposes and says subject to the penalties of a Division .S.A. ' 4904 relating to unsworn falsification to authorities that the facts set forth in the 18Pa.C in Coin Taint in Confession of Judgment for Money are true and correct to his forego g P information and belief. - J artin De 1 Special Assets Officer •~1 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA FIRST NATIONAL BANK OF PENNSYLVANIA, successor by merger to The Legacy Bank, Plaintiff, vs. BEN T. WOOTTON, Defendant. CIVIL DIVISION NO.. NOTICE OF ORDER DECREE OR JUDGMENT TO: ( ) Plaintiff (XX) Defendant - Ben T. Wootton 2290 Lambs Gap Road Enola, PA 17025 You are hereby notified that an Order, Decree or Judgment was entered in the above- captioned proceeding on l ~ ~a~ ~ ( ) A copy of the Order or Decree is enclosed OR (XX) The judgment is as follows: The aggregate sum of $4,450,679.27 with interest on the respective principal sums of the $5,000,000 Note, the $330,000.00 Note and the $670,000.00 Note at the default contract rates from December 17, 2012 as provided for under the Notes, plus costs of suit and reasonable and actual attorneys' fees not to exceed fifteen percent (15%) of the liabilities then outstanding under the Notes. Deputy ____.-~