HomeMy WebLinkAbout12-7686,. •
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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: /a - 7L8~
Plaintiff,
vs.
KEYSTONE BIOFUELS, INC.,
Defendant.
I HEREBY CERTIFY THAT THE ADDRESS OF THE
PLAINTIFF IS:
One FNB Boulevard
Hermitage, PA 16148
AND THE DEFENDANT IS:
2850 Appleton Street, Ste E
Camp Hill, PA 17011
A Y FOR PLAINT
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
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1N THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA
FIRST NATIONAL BANK OF CIVIL DIVISION
PENNSYLVANIA, successor by merger to
The Legacy Bank, NO.:
Plaintiff,
vs.
KEYSTONE BIOFUELS, INC.,
Defendant.
CONFESSION OF JUDGMENT
Pursuant to the warrants of attorney contained in the $5,000,000 Note, $330,000 Note
and $670,000 Note, true and correct copies of which are attached to the Complaint filed in this
action, I appear for the Defendant, Keystone Biofuels, Inc., and confess judgment in favor of
Plaintiff and against Defendant, Keystone Biofuels, Inc., as follows:
Count I•
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
with interest on the principal sum ($3,908,071.67) at the default rate from December 17, 2012 (a
per diem of $1,200.64), as may change from time to time in accordance with the terms of the
$5,000,000 Note, plus costs and expenses of suit, and reasonable attorneys' fees as provided for
under the $5,000,000 Note.
Count II:
Principal $ 247,841.37
Interest to 12/17/12 $ 6,428.88
Late Charges 11/19/12 $ 498.64
TOTAL $ 254,768.89
with interest on the principal sum ($247,841.37) at the default rate from December 17, 2012 (a
per diem of $76.14), as may change from time to time in accordance with the terms of the
$330,000 Note, plus costs and expenses of suit, and reasonable attorneys' fees as provided for
under the $330,000 Note.
Count III:
Principal $ 171,934.58
Interest to 12/17/12 $ 4,634.23
Late Charges 11/19/12 $ 2,070.62
TOTAL $ 178,639.43
with interest on the principal sum ($171,934.58) at the default rate from December 17, 2012 (a
per diem of $52.29), as may change from time to time in accordance with the terms of the
$670,000 Note, plus costs and expenses of suit, and reasonable attorneys' fees as provided for
under the $6700,000 Note.
AGGREGATE AMOUNT DUE AND OWING: $4,450,679.27
GRENEN & BIRS'IC, P.C.
BY:
Jo .Joyce,
rneys for l
ro Hac Vice
r ~
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~~
IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA
FIRST NATIONAL BANK OF CIVIL DIVISION
PENNSYLVANIA, successor by merger to
The Legacy Bank, NO.: _ ~~
c-~ ~ ~ ~~o G~~' ~lth
Plaintiff,
vs.
KEYSTONE BIOFUELS, INC.,
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., and files this Complaint in Confession of Judgment for
Money as follows:
1. Plaintiff, First National Bank of Pennsylvania, successor by merger to The
Legacy Bank, including Legacy Bank, a Division of First National Bank of Pennsylvania
(hereinafter "Plaintiff'), has its principal place of business located at One FNB Boulevard,
Hermitage, PA 16148.
2. Defendant, Keystone Biofuels, Inc. (hereinafter "Defendant" or "Borrower"), is a
Pennsylvania corporation with its principal place of business located at 2850 Appleton Street, Ste
E, Camp Hill, PA 17011.
Count I: $S. 000.000.00 Note
3. Plaintiff hereby incorporates all prior paragraphs by reference as if fully set forth
herein.
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4. On or about October 24, 2006, Defendant executed Term Note A in favor of
Legacy Bank, a Division of First National Bank of Pennsylvania, which has since merged into
First National Bank of Pennsylvania, in the original principal amount of $5,000,000.00, as
amended by that certain Amendment to Note dated January 31, 2008 and Second Amendment to
Note dated August 25, 2008 and executed by Defendant and Plaintiff (as amended, modified,
supplemented, substituted, renewed and restated from time to time, hereinafter collectively, the
"$5,000,000 Note"). The $5,000,000 Note authorizes the confession of judgment against the
Defendant. True and correct copies of said $5,000,000 Note, including the confession of
judgment provision, and the amendments thereto, which copies are true and correct
reproductions of the original $5,000,000 Note and the amendments thereto, are attached hereto
and marked as Exhibit "A".
5. In connection with the $5,000,000 Note, Defendant executed and delivered to
Plaintiff a Loan Agreement dated October 24, 2006, which also covers the other two (2) notes
described more fully herein (hereinafter "Loan Agreement"). A true and correct copy of the
original Loan Agreement is attached hereto and marked as Exhibit "B".
6. Other than the aforementioned acquisition by merger of The Legacy Bank by
Plaintiff, the $5,000,000 Note has not been released, transferred or assigned.
7. Plaintiff is not entering judgment by confession against a natural person in
connection with a consumer credit transaction.
8. Plaintiff has not entered judgment on the $5,000,000 Note in any jurisdiction.
9. The $5,000,000 Note authorizes the entry of judgment upon the occurrence of an
Event of Default as that term is defined in the $5,000,000 Note.
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10. Events of Default under the $5,000,000 Note have occurred and exist under the
terms of the $5,000,000 Note as a result of, inter alia, failure to make payment of the amounts
owed when due and Defendant's default under the terms of the Loan Agreement as a result of
Defendant's violation of the covenant prohibiting Defendant from disposing of fixed assets
serving as collateral for the loan, which Loan Agreement default also constitutes an Event of
Default under the $5,000,000 Note.
11. As a result of said defaults, by correspondence of November 5, 2012 and
November 6, 2012, Defendant was advised of the certain defaults under $5,000,000 Note and
provided a ten (10) day cure period. Defendant failed to cure the defaults. As a result of the
continuing defaults and Defendant's failure to cure, Plaintiff sent a second notice of default dated
on or about November 19, 2012 to Defendant demanding payment of all amounts owed to
Plaintiff under the $5,000,000 Note. Defendant has failed to pay Plaintiff.
12. As of December 17, 2012, the amount due and owing from Defendant to Plaintiff
under the $5,000,000 Note is as follows:
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
plus costs and expenses of suit and reasonable and actual attorneys' fees, as provided for under
the $5,000,000 Note.
WHEREFORE, Plaintiff, as authorized by the warrant of attorney contained in the
$5,000,000 Note, demands judgment against the Defendant, Keystone Biofuels, Inc., in the sum
of $4,017,270.95, with interest on the principal sum ($3,908,071.67) at the default rate from
December 17, 2012 (a per diem of $1,200.64), as may change from time to time in accordance
with the terms of the $5,000,000 Note, plus costs and expenses of suit, and reasonable attorneys'
3
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fees as provided for under the $5,000,000 Note, and brings said instrument to Court to recover
said sum.
Count II: $330, 000.00 Note
13. Plaintiff hereby incorporates all prior paragraphs by reference as if fully set forth
herein.
14. On or about October 24, 2006, Defendant executed Term Note B in favor of
Legacy Bank, a Division of First National Bank of Pennsylvania, which has since merged into
First National Bank of Pennsylvania, in the original principal amount of $330,000.00, as
amended by that certain Amendment to Note dated January 31, 2008 and Second Amendment to
Note dated August 25, 2008 and executed by Defendant and Plaintiff (as amended, modified,
supplemented, substituted, renewed and restated from time to time, hereinafter collectively, the
"$330,000 Note"). The $330,000 Note authorizes the confession of judgment against the
Defendant. True and correct copies of said $330,000 Note, including the confession of judgment
provision, and the amendments thereto, which copies are true and correct reproductions of the
original $330,000 Note and the amendments, are attached hereto and marked as Exhibit "C".
15. In connection with the $330,000 Note, Defendant executed and delivered to
Plaintiff a Loan Agreement dated October 24, 2006, which also covers the other two (2) notes
described more fully herein (hereinafter "Loan Agreement"). A true and correct copy of the
original Loan Agreement is attached hereto and marked as Exhibit "B".
16. Other than the aforementioned acquisition by merger of The Legacy Bank by
Plaintiff, the $33Q,000 Note has not been released, transferred or assigned.
17. Plaintiff is not entering judgment by confession against a natural person in
connection with a consumer credit transaction.
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18. Plaintiff has not entered judgment on the $330,000 Note in any jurisdiction.
19. The $330,000 Note authorizes the entry of judgment upon the occurrence of an
Event of Default as that term is defined in the $330,000 Note.
20. Events of Default under the $330,000 Note have occurred and exist under the
terms of the $330,000 Note as a result of, inter alia, the failure to make payment of amounts
owed when due and Defendant's default under the terms of the Loan Agreement as a result of
Defendant's violation of the covenant prohibiting Defendant from disposing of fixed assets
serving as collateral for the loan, which Loan Agreement default also constitutes an Event of
Default under the $330,000 Note.
21. As a result of said defaults, and as permitted under the $330,000 Note, by
correspondence of November 5, 2012 and November 6, 2012, Defendant was advised of certain
defaults under $330,000 Note and provided a ten (10) day cure period. Defendant failed to cure
the defaults. As a result of the continuing defaults and Defendant's failure to cure, Plaintiff sent
a second notice of default on or about November 19, 2012 to Defendant demanding payment of
all amounts owed to Plaintiff under the $330,000 Note. Defendant has failed to pay Plaintiff.
22. As of December 17, 2012, the amount due and owing from Defendant to Plaintiff
under the $330,000 Note is as follows:
Principal $ 247,841.37
Interest to 12/17/12 $ 6,428.88
Late Charges 11/19/12 $ 498.64
TOTAL $ 254,768.89
plus costs and expenses of suit and reasonable and actual attorneys' fees as provided for under
the $330,000 Note.
WHEREFORE, Plaintiff, as authorized by the warrant of attorney contained in the
$330,000 Note, demands judgment against the Defendant, Keystone Biofuels, Inc., in the sum of
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$254,841.37, with interest on the principal sum ($247,841.37) at the default rate from December
17, 2012 (a per diem of $76.14), as may change from time to time in accordance with the terms
of the $330,000 Note, plus costs and expenses of suit, and reasonable attorneys' fees as provided
for under the $330,000 Note, and brings said instrument to Court to recover said sum.
Count III.• $670.000.00 Note
23. Plaintiff hereby incorporates all prior paragraphs by reference as if fully set forth
herein.
24. On or about October 24, 2006, Defendant executed Term Note C in favor of
Legacy Bank, a Division of First National Bank of Pennsylvania, which has since merged into
First National Bank of Pennsylvania, in the original principal amount of $670,000, as amended
by that certain Amendment to Note dated January 31, 2008 and Second Amendment to Note
dated August 25, 2008 and executed by Defendant and Plaintiff (as amended, modified,
supplemented, substituted, renewed and restated from time to time, hereinafter collectively, the
"$670,000 Note"). The $670,000 Note authorizes the confession of judgment against the
Defendant. True and correct copies of said $670,000 Note, including the confession of judgment
provision, and the amendments thereto, which copies are true and correct reproductions of the
original $670,000 Note and the amendments, are attached hereto and marked as Exhibit "D".
25. In connection with the $670,000 Note, Defendant executed and delivered to
Plaintiff a Loan Agreement dated October 24, 2006, which also covers the other two (2) notes
described more fully herein (hereinafter "Loan Agreement"). A true and correct copy of the
original Loan Agreement is attached hereto and marked as Exhibit "B".
26. Other than the aforementioned acquisition by merger of The Legacy Bank by
Plaintiff, the $670,000 Note has not been released, transferred or assigned.
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27. Plaintiff is not entering judgment by confession against a natural person in
connection with a consumer credit transaction.
28. Plaintiff has not entered judgment on the $670,000 Note in any jurisdiction.
29. The $670,000 Note authorizes the entry of judgment upon the occurrence of an
Event of Default as that term is defined in the $670,000 Note.
30. Events of Default under the $670,000 Note have occurred and exist under the
terms of the $670,000 Note as a result of, inter alia, the failure to make payment of the amounts
owed when due and Defendant's default under the terms of the Loan Agreement as a result of
Defendant's violation of the covenant prohibiting Defendant from disposing of fixed assets
serving as collateral for the loan, which Loan Agreement default also constitutes an Event of
Default under the $670,000 Note.
31. As a result of said defaults, and as permitted under the $670,000 Note, by
correspondence of November 5, 2012 and November 6, 2012, Defendant was advised of certain
defaults under $670,000 Note and provided a ten (10) day cure period. Defendant failed to cure
the defaults. As a result of the continuing defaults and Defendant's failure to cure, Plaintiff sent
a second notice of default on or about November 19, 2012 to Defendant demanding payment of
all amounts owed to Plaintiff under the $670,000 Note. Defendant has failed to pay Plaintiff.
32. As of December 17, 2012, the amount due and owing from Defendant to Plaintiff
under the $670,000 Note is as follows:
Principal $ 171,934.58
Interest to 12/17/12 $ 4,634.23
Late Charges 11/19/12 $ 2,070.62
TOTAL $ 178,639.43
plus costs and expenses of suit and reasonable and actual attorneys' fees as provided for under
the $670,000 Note.
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WHEREFORE, Plaintiff, as authorized by the warrant of attorney contained in the
$670,000 Note, demands judgment against the Defendant, Keystone Biofuels, Inc., in the sum of
$178,639.43, with interest on the principal sum ($171,934.58) at the default rate from December
17, 2012 (a per diem of $52.29), as may change from time to time in accordance with the terms
of the $670,000 Note, plus costs and expenses of suit, and reasonable attorneys' fees as provided
for under the $670,000 Note, and brings said instrument to Court to recover said sum.
Respectfully submitted,
GRENEN & BIRSIC, P.C.
av ~~~
Jo oyce, Esqu' /
P . I. . #68242
t rneys for Plain
ne Gateway Center, 9th 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
8
EXHIBIT "A"
To Complaint in Confession of Judgment
s ~
$5,000,000.00
October Z4, 2008
Harrisburg, Pennsylvania
TERM NOTE A
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 170~11(hereinafter called "Maker"), does: hereby promise to pay, without defalcation,
to the order of LEC3ACY BANK, A DIVISION OF FIRST NATIaNAL BANK Off' PENNSYLVANIA,
(hereinafter called the "Payee"), at 2600 Commerce Drive, P.O. Box, 6094?; Harrisburg,
Pennsylvania 17106>60947, or at such other place as the. holder hereof may,. from time to time,
direct Maker in writing, the principal sum of eve Million Dollars 05,000,000.00), 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 7.06°x6 per annum until October 24, 2016, and thereafter at a fluctuating rate per
annum equal to the Prime Rate, as in effect from time to time; plus'/:°~-, at the times and in the
manner as follows:
Maker shall make monthly interes# only payments on the outstandtng 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 tnterest shad be payablein consecutive monthly installments
(initially $ 58 t,1~ ~da}, which installments shat) be increased or decreased to
reflect any changes} in the effective interest rate and shall be first applied #o interest
on the outstanding principal balance hereof and the balance. to the payment of the
outstanding principal balance hereof un#il principal arttt rrt+erest are fully paid;
provided, .however,. that the entire outstanding principal balance hereof, together with
all 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 Base-Rate ort corporate loans at large U.S.
Money Center Commercial. Banks as published: in the Money Rates column of .tire Wall.: Street
Journal, Eastern Edition,: or its successor publication as the "Prime Rate". If the Prime Rate is
designated as more than one rats or published as a rangeof rates, Prime Ratei far purposes of-this
Note shall mean the highest of the rates published. If the Wall. Street Journal or its successor
publication ceases to publish a rate or rates of nterost as the "Prime Rate', far purposes of this Note
the>term "Prime Rate" shall mean the rate which Payee establishes as-its Prime Rye whether or not
published.. The "Prime Rate" shall be determined on the date of this Note anal 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 will be determined on the next Business Day.. "Business Day"`shat)-mean
any day vthecthan a Saturday, Sunday ors legal holiday on which commercial banks are authorized
or required. to be closed for business in Harrisburg, Pennsylvania.
Interest shah be calculated on the basis. of the actual number of days in the current calendar
year divided by 360. 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 fo 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.
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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 shall 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 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 (8.096) 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 doNars ($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. 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 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 faN to observe or
perform any of the terms, agreements, covenans and conditons of the Maker contained herein or in
any other Loan Document, the Payee,. in its discretkxt, but without any duty to do so, and without
waiv~g any default, may perform any of such terms, agreen~mts, 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 ahaN be due on demand aMd shaA become a
part of and bs added to the indebtedness due under this Note, with interest to bey 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.
or
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;
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 agnaement with Bank after any applicable notice and cure period(s) or 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 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;
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ar 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 (3Q) days following entry or issuance; or
5. If any dissolution, merger, consolidation 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 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,
Social 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 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) raisethe rata of interest accruing on the unpaid
balance of the principal sum of this Note by four percent~e {496} points above the rate of interest
otherwise appiicab~, independent of whether Payee elects to accelerate the unpaid principal
balance as a result of such default; and {b) declare immediately due and payable #heentlre-unpaid
balance of fhe principal sum of this Note with interest accrued thereon at the ram specif'red to the
date of default and thereafter at the rate provided herein from time to time, and aN 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 cH' in part at any time
by one or more of the remedies provided to Payee in fhe Loan Documents. In such case, Payee
may .also recover ail costs of suit and other expenses in connection therewith, together with a
reasonable attorney's commission for collection, togethetwith interest on any juafgmer~ obtained by
Payee at the rate provided herein from time to time, including interest at that rate firom 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 liabilities 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, 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.
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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 ail benefits that might accrue to Maiker by virtue of any
present or futuro laws exempting any property, real or personal, or any part of the proceeds arising
from any sab 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 Mme for payrlnent. Maker agrees
that any real estate that may be levied upon pursuant to a judgment obtained 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 heroby 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, performance, 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 atl extensions of time, renewals, waivers or modifications tihat may be granted
by Payee with respect to the payment or other provisions of this Note, and tq 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 remedies hereunder unless such waiver is in writing and signed by Payne, and then only to
the extent speaficaUy set forth in said writing. A waiver of one even# 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 BAIANCE HEREOF,
TOGETHER WITH ALL AMOUNTS FOR'IMiICH THE MAKER MAY BE LIABLE TO THE PAYEE
HEREUNDER, INCLUDINE3, BUT NOT UNITED TO, UNPAID INTEREST, COSTS AND UTHER
EXPEN5E3 OF SUIT AND. REASQNAii3t.E ATTORNEY'S FEES; ALL A8 AF€N~ESA-tfl lF A CCyPY
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 any payments 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
shall be refunded to Maker. Any such application or refund shall not cure or wvaive 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 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 appbcable law, to be an expense, fee,
premium or penalty rather than interest.
-4-
r s
_~
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 unenforeeabiNty shall not invalidate the balance of such prevision to the extent it
is not prohibited or unenforceable, nor invalidate the other provrsions 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.TOANY RIGHTS OR OBLIGATIONS UNDER THIS NOTE OR
OTHER DOCU(rAENTS RELATING TO THIS- TRANSACTION.
THE MAKER HEREBY AGREES THAT ANY ACTION OR PROCEEDING AGAINST IT TO
ENFORCE THl9 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
SUMMC3NS AND COMPLAINT COMMENCING AN ACTION OR PROCEEptNQ IN ANY-SUCH
COURT SHALi_ BE PROPERLY SERVED AND-SHALL CONFER PERSONAL JURISDICTION IF
SERVED BY REGI3TLRED 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 shalt be governed by and construed acbording to the laws of,
the Commonwealth of Pennsylvania..
The tem~r'"Note" as used herein, shall mean the same as amended, modified or altered, from
time to time.
Whenever used, the singular shalt 'includathe 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 AAaker.
This obligation sheik 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.
ATTEST: KEYSTON OFUELS, INC:
vrE.... By: ~ ~.~.,--.
~~ 4
Allison A. Miner, Secretary Ra K: Mner, CEO!
-5-
v~ ,~
-~
AMENDME,N-T~gTO N.QT
(Accounts`--._....91955
.c
This Amendment to Note (hereinafter "Amendment"} made this 3/ day of "~AN~ , 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
Octaber 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 cansideration, 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 will be reset to the "Prime Rate", as published from time to time in Tlie
T3~a11 Street Journal, 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 Nate.
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 of
each successive month thereafter through February 24, 2008; thereafter monthly principal and
Page 1 of S
a ~
interest in the amount of Fifty Eight Thousand 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 Waivee• 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 foil 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.
Page 2 of 5
• r
10. 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 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
BY JURY IN ANY ACTION ARISING HEREUNDER OR OTHERWISE IN
CONNECTION HEREWITH.
11. Modifications and Assignment. This Amendment shall not be modif ed 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 far 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 docwnents 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 in 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 conshued or interpreted to limit
or restrict tl~e provisions as set forth herein or considered in the construction and interpretation of
this Amendment.
Page 3 of 5
a +
17. h'acsimile. 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
aclaiowledged 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. §l, et
sec .) have hereunto set their respective hands and seals on the date above first written.
ATTEST: BORROWER:
KEYSTONE BIOFUELS, INC.
~P y~i+.~, By )~-~---- y`''~,,,.,--. (SEAL)
Secretary Race K. Miner, Founder/CEO
i~'/~,~-~ By ~~"` (SEAL)
Secretary Ben Wootton, t?ontro}ler ,~ ,,,r,,,,,-
ATTEST: BANK:
FIRST NATIONAL BANK OF
PENNSYLVANIA
-~f ~
~`' By ~~ (SEAL)
Assistant Secretary Charles M. Wasson, Senior Vice President
CMW/db
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, f~t (33 P S. §l, et secy.), hereby acknowledge and
consent to the foregoing Agreement this day of , 2008.
i ness
fitness
Race K. Miner
~f
Ben Wootton
Page 5 of 5
~ a
SECOND AMENDMENT TO NOTE
(Account # 43891955)
This Amendment to Note (hereinafter "Amendment") made this,~'~day of ~ ~+t r , 2008,
by and between:
KEYSTONE BIOFUELS, INC., a Pennsylvania Corporation, 485 St. John's Church Road,
Suite 1 i 0, 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 Three Dollars and Nine Cents ($4,971,263.09) together with
interest thereon.
2. Intere9t 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 Walt 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 Bank interact 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 Foriy Eight Thousand Eight Hundred Fifty Nine Dolldrs and Eighty
Nine Cents (548,859.89), as billed in accordance with the Applicable Rata as stated above,
beginning October 24, 2008 and on the twenty fourth day of each successive month thereafter
until such .tiut~e 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 intere~, 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 Nate, 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 terns of this Amendment and
reaffirms waiver of the same under the Nota.
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 Nota, are hereby acknowledged by Borrower as existing and shall remain in full
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 sat 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 Nota 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 affect and
shall survive the execution of this Amendment.
8. Severability. If any provision of this Amendment is held io be illegal or unenforceable by
any Court or other body of competent jurisdiction, than this Amendment shall be construed and
interpreted as if such invalid or unenforceable provision wero not included herein and the other
provisions of this Amendment shall be enforceable to the fullest extant permitted bylaw.
Page 2 of 5
• +
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 Comanon Pleas of Cumberland County, Fennsylvania, or the United States District
Court for the Middle DisMct of Pennsylvania, the principles of conflicts of laws notwithstanding.
BORROWER AND BANK HEREBY NAIVE THE RIGHT TO TRIM, BY JURY IN
ANY ACTION ARISING HEREUNDER OR OTHERWISE IN CONNECTION
HEREWITH.
11. Madlfications 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 Bound; Interpretation of Terms. This Amendment shall inure to and hind the
parties hereto and their respective heirs, personal representatives, successors and assigns, as the
case maybe. Words of gender as used heroin 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 severalty 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, alI such counterparts shall constitute but one and the same
original.
Page 3 of 5
•
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. 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.
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
seq.) have hereunto set their respective hands and seals on the date above first written.
BORROWER:
KEYSTONE BIOFUELS, INC.
ATTEST:
Assistant Secre ary
CMW/ml
f
By ~`+ ~ -~ (SEAL)
Race Miner, CEO
By ~ (SEAL}
Ben T. Wootton, President
BANK:
FIRST NATIONAL BANK OF
PENNSYLVANIA
By' ~ (SEAL)
Charles M. Wasson, Senior Vice President
Page 4 of S
ATTEST:
~s s
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, et ~.), hereby acknowledge and
co t to the foregoing Agreement this Z Y"day of w , 2008.
Witness R K. Miner
Witness Ben T. Wootton
Page 5 of 5
EXHIBIT "B"
To Complaint in Confession of Judgment
i '
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 FIRBT NATIONAL BANK OF PENN8YLVANIA ("Bank").
Borrower hereby applies to Bank for a $5,000,000 secured term loan ("Loan A"), a $330,000
secured term loan (Loan B") and a $670,000 secured term 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 Wali Street Joumal prime rate plus
°~6, adjusted quarterly.
Term: Fifteen (15) years (six month draw period).
Repayment Schedule: Twelve (12) monthly interest only payments. Thereafter, One
Hundred Sixty Eight (168) monthly principal and interest
payments, adjusted at Bank's option to reflect any change(s) in
the applicable interest rate.
I. Loan B.
Amount: $330, 000
Interest Rate(s): Fixed at 7.06% per annum for ten (10) years; thereafter,
variable and indexed to the Wail Street Journal prime rate plus
/off
Term: Fifteen (15) years.
Repayment Schedule: One Hundred Eighty (180} monthly prinapal and interest
payments, adjusted at Bank's option to reflect any change(s) in
the applicable interest rate.
I. Loan C.
Amount: $870,000
Interest Rate: Fixed at 6.95°~ per annum:
Term: Seven (7} years (Six month draw period.}
Repayment Schedule: Twelve (12) monthly interest only payments. Thereafter,
seventy two {72) monthly principal and interest payments.
II
_'
'
The Borrower and Guarantors, as hereinafter defined, acknowledge reading ail 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
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 substantiaAy
as now being conducted. The purpose of Loan A is to provide Tong-term financing for Borrower a~ a
commercial property located at 485 St. John's Church Road, Shiremanstown, Pennsylvania 17011.
Funds will b® used for machinery and equipment ($4,370,000), to refinance debt ($580,000) and an
escrow account for cost overruns ($70,000). Loan B shat) be used only to refinance debt for original
plant equipment. Loan C shat) 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 withdrawals}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 delivered 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 severalty (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, documents, tnshuments, inventory, machinery
and equipment, chattel paper, fixtures and general intangibles, now existir~ or hereafter arising, and
all cash and non-cash proceeds thereof, (ii} an assignment of life insurance in tha minimum amount of
$8,000,000 on the life of Race K. Miner, and (iii) an assignment of life insuralnce in the minimum
amount of $8,000,000 on the life of Ben T. Wootton, (collectively, the "Collateral"). A landlord's
consent and waiver will be' required for each leased location(s). A USDA loan guaranty must be
provided in the amount of 8096 of Loan A, on terms acceptable to Bank. Confirmation of the
approval(s) of the USDA guaranty must be in hand prior to the first advance of proceeds of loan A
To the extend of any conflict(s), the terms and condifions of or for the USDA guaranty shall supersede
and control over the terms and conditions of this Agreement with respect to Laan 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 B 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 (ii) annual budgets and business plans. Also, the Borrower shall fum~h Bank with
federal tax returns when filed. Also, Borrower shall famish Bank with quarterly CPA-compiled
-2-
~ ~
financial statements and quarterly in-house prepared financial statements and accounts receivable
and accounts payable listings and agings certified by management within 15 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 federal income tax returns whin 90 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 amounts and with 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 least 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 officiai~ 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. Duty and timely pay and discharge all 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 GAAP.
c. Properties. Maintain, preserve, and keep its properties in good repair, working
order and condi#ion, reasonable wear and tear excepted, and make ail reasonable repairs,
replacements, additions, betterments and improvements thereto,
d. Coroorate Existence. Maintain its corporate existence and all Licenses, permits
and approvals necessary in the conduct of the Business other than those the failure to maintain of
which would not 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
applicable 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 respect thereof.
f. Audits by Bank. Permit the Bank and its duly authorized 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 all such reasonable times following no less than two (2}
business days' prior notice (except prior notice need no# be given if an Event of Default has occurred
and is continuing) and as often as the Bank may reasonably require.
g. Management. 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-
~ i
election or appointment of officers or directors written notice of any change of such officers and
directors.
h. No ce. 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.
with Bank.
Banking Relation~hj~. Establish and maintain its primary deposit relationship
j. Financial Covenants. Maintain the following financial ratios and levels, to be
tested annually:
Tangible worth must exceed $700,000 at ail times.
ii. Minimum Debt Service Coverage Ratio of 1.20X at all times. The Debt
Service Coverage Ratio (i.e., the ratio of net income, prior to gaiMoss
on sale of assets, plus depreciation plus interest expense minus
unfunded capital expendituresJAnnual Debt Service based upon the
Borrower's annual financial statements) 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 Assurances. At any time upon request of Bank, execute and deliver to
Bank, in form to be satisfactory to Bank, such additional documentation in respea 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°r6 equity).
m. DCED Guaranty. Comply with all terms and conditions required to provide and
maintain the DCED Guaranty.
n. Opinion Letter. Provide a favorable opinion of Borrower's counsel with respect
to the matters addressed in paragraph 7.
6. NEGATIVE COVENANTS. The Borrower will not:
a. Indebtedness. Create, incur, assume or permit to exist any borrowing(s) or
landing(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
withou# the Bank's concurrence. Borrower will 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 Development.
-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 othewise 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/advances to stockholders, owners, officers; or affiliates require
the prior written consent of the Bank. Loans from stockholders, owners, officers or affiBat®s 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 will also be postponed upon the
occurrence and during the continuance of an Event(s) of Default.
d. Create (Prohibit) Encumbrances. Without Bank's prior written approval, which
is not to b® unreasonably withheld, and except for purchase money lient; securing permitted
indebtedness, create, incur, assume or to exist, any mortgage, pledge, assignment, conditional sale
or other title retention agreement, Tien, charge or encumbrance of or upon, or security in#erest in, any
of its properties or assets, now owned ar hereafter acquired, securing any indebtedness or other
obligation(s) or enter into any agreement(s) prohibiting the creation or assumption of any mortgage,
pl~lge 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 obligation(s). Borrower will not seN, transfer or assign to any firm,
corporation or other person its accounts, notes or trade acceptance receivable.
e. Investments. Maker permit or suffer to exist, any investment(s) in or otherwise
estabilsh or create or permit the establishment or creation of any new company or affiliate without the
Bank's prior written approval.
f. Impairment of Co!!a{eral. 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 Divi~end~. Dividend payments will be limited to an amount that,
when taken, will not adversely affect the r®payment abilityr 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 Conditional Commitment,
(3) all 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 IiabHity resulting
from profitability of the business.
h. Officer's Salaries and Bonuses. Compensation of officers and owners will be
limited to an amount that, when taken, wilt not adversely affect the repayment ability of the Borrower.
This amount may not be increased year to year unless ('t) 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 additions! 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. Managemen# or Ownership. 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 date hereof ar in the management or ownership thereof.
-5-
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, validly 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 business(es) and the location(s) of its assets or properties.
b. Enforceability of Document. 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-faws 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.
e. No Defaults. The Borrower is not in default under, or in violation oft nor will the
execution and delivery of this Agreement, the Note or the Security Documents constitute a default
under 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 business is affected. The operations of the Borrower
comply in ail material respects with all applicable laws, ordinances and regulations.
f. ~ Operous Agreements. Neither the Borrower nor the Guarantor is a party to
or bound by, nor are any of the properties or asse#s 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 restriction, which materially and adversely affects its
business, assets or condition, financial or otherwise.
g. Financial S~teme~ts. All financial information heretofore furnished to the Bank
are true, correct and complete and present fairly the financial condition of the Borrower and the Surety
as at the dates thereof and for the periods covered thereby, including contingent iiabi~#fes 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 ail Security Documents and have taken all necessary action to authorize
the execution, delivery and performance of the same.
i. ro ies. The Borrower has good and marketable title to a{I of its assets
subject to no liens, encumbrances and objections, except as have been disclosed to and approved by
the Bank.
-6-
~ ~
j. Taxes. The Borrower has filed all necessary tax returns to date and paid all
taxes heretofore due and payable.
k. Emnlovee Benefit Plana. (i) Each employee benefit plan of Borrower, as
defined in the Employee Retirement Income Security Act of 1974, as amended, ("FRIBA") is in
compliance with all applicable law and regulation, (ii) no "Reportable Event" as defined in ERlSA has
occurred with regard to any such plan, and (fii) 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.
f. 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 principal and/or interest in respect of the Loan
on the date the same becomes due and payable; or
b. Failure by the Borrower or the Guarantor to perfoml 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 herewkh or therewith; or
c. (i) Failure to pertorm any material term, condition 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 maybe affected and such failure(s) continues
beyond any applicable notice and cure period(s) (a "Debt InstrumenE'~, so that, as a result of any such
failure to pertorm the indebtedness included therein or secured or covered thereby shad have been
declared due atxl payable prior to the date on which such indebtedness would otherwise become due
and payable; or (it) any event or condition referred to in any Debt Instrument shalt occur or fail to
occur, so that, as a result thereof, the indeb#edness included therein or secured or covered thereby
shall have been declared due and payable prior to the date on which such indebtedness would
othennrise become due and payable; or (iii} any indebtedness included in any Debt instrument or
secured or covered thereby in 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 substantial part. of its assets, or shall
commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in affect; or if there
shall have been filed any such petition or applicaCwn, 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-
s ~
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 (t30) 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 become 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 all property of Borrower or the Guarantors now or at any time in Bank's pos-
session in any capacity whatsoever (set-off) and (ii) seA all or any part of the collateral security in
accordance with the Pennsylvania Uniform Commercial Code 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 inciuding 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
exercised by the Bank from time to time and as often as maybe necessary. The Bank shall 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, shall 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. G ERAL.
a. Generally Accepted Accountins~ Princicie$. All accounting terms used herein
shall, except as specifically provided herein, be determined in accordance with generally acceptable
accounting principles consistently applied.
b. Survival of Warranties. Ail agreements, representations and warranties made
herein shall survive the delivery of this Agreement.
-8-
~ i
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 shalt, 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 allowed it by law or
equity, shall be cumulative and may be exercised from time to time. No faNure on the part of the Bank
to exercise, and no delay in exercising, any right shah operate as a waiver thereof, nor shall any single
or partial exercise of any right preclude any other or future exercise thereof or the exercise of any
other right.
e. 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 be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity of unenforceabiNty shall affect only such clause or provision, 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. No_ tires. 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. mails, postage prepaid, or
hand delivered to the following address or to any alternate address designated in writing by the
recipient:
Bank: LEGACY BANK, A DIVISION OF FIRST
NATIONAL BANK OF PENNSYLVANIA
2600 Commerce Drive
P.O. Box 80947
Harrisburg, Pennsylvania 17106-60847
Attn: Jeffrey W. Myera
Senior Vice President
Borrower: KEYSTONE BIOFUELS, INC.
485 St. John's Church Road,
Suite 110,
Shiremanstown, Pennsylvania 17011
Attn: Race K. Miner
President
g. Exuenses of Bank. The Borrower shall pay to USDA a $80,000 guaranty fee
and the annual guaranty fee(s) and all fees and expenses reasonably incurred by the Bank in
connection with the preparation, execution, delivery and performance of this Agreem~t, 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-
maintenance of the Bank's interest in any collateral. These fees and expenses shall include, without
limitation, 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 shall, at the Bank's option,
automatically trigger a default of any other present or future obligation of Borrower or any endorser,
surety or guarantor of the Note.
j. Crass Collateral. The collateral for the Loan shall secure all present and future
obligations, direct or contingent; of Borrower to Bank.
k. nd mni .Borrower agrees to defend, indemnify and hold the Bank harmless
against any claim, action, proceeding, loss or liability 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 applicable environmental law or regulation, unless caused by
Bank's willful misconduct or negligence. This indemnity shall survive the termination of this
Agreement and repayment of any indebtedness of Borrower to Bank.
1. Written Commitment. The terms and conditions of the commitment letter dated
(by Bank) August 9, 2006 are incorporated herein. Capitalized terms used herein without definition
that are defined therein shalt have the same meanings. in the event of any conflict, the provisions of
this Agreement shall control.
m. Waiver of Jurv 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-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the
date first set forth above.
AT ST: . , KEYSTONE OFUELS, INC.
~. By:
Allison A. N~ner, Secretary R K. Nfiner, CEO
"Borrower"
WITNESS:
~~1
~i
(SEAL)
K. Miner
__ (SEAL)
Ben T. Wootton
AGuarantors°
LEGACY BANK, A DIVISION OF FIRST NATIONAL
BANK OF PENNSYLVANIA
By:
Je y or Vice President
ABanke
-11-
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 LEGACY BANK, A DIVI81ON OF FIR8T NATIONAL BANK OF 'PENNSYLVANIA,
(hereinafter called the "Payee"), at 2600 Commerce Drive, P.O. Box 60947, Harrisburg,
Pennsylvania 171-60947, 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 (~i330,000.00},
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 Laan Agreement of even date
between Maker and Payee (the "Loan Agreement"), together with interest an the outstanding
principal amount of this Note at the fxed rate of 7.06°~ per annum until October 24, 2016, 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 shaft be payable in consecutive monthly installments
(initially $2,996.34), which installments shall be increased or decreased to reflect any
change(s) in the effective interest rate and shall be first applied to interest an 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, together with
all 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 Base Rate on corporate loans at large U.S.
Money Center Cammerdal 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 more than one rate or published as a range of rates, Prime Rate for purposes of this
Note shaft mean the highest of the rates published. If the Wall Street Journal or its successor
publication ceases to publish a rate or rates of interest as the "Prime Rate", for purposes ~ this Note
the term "Prime Rate" shall mean the rate which Payee establishes as its Prime Rate 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 calendar
year divided by 360. Interest shall be payable as provided herein. All then accrued and unpaid
interest ahalt also be payable when the entire principal balance of this Note becomes due and
payable (whether by stated maturity, demand ar 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 all interest accrued
hereunder to the date of prepayment. Each partial prepayment shall be applied against the
ins#allments of principal last {by date) due and payable; and no prepayment shall postpone or
a -
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 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 (8.096) of such past due amount. The late charge shall be in addition to any interest
due. Notwithstanding the foregoing, in no event shall any tats charge be less than ten daHars ($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. Ali 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, strictly 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, covenants and conditions of the Maker contained I~rein 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 be 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.
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 expiration of any applicable notice and cure period(s) Q fails to perform or comply
with any agreement with Bank after any applicable notice and cure period(s) or 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 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;
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
-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, consolidation 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 faits to pay any income, excise, or o#her taxes of any nature whatsoever
when due and payable or faits 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 ~e same is being contes#ed 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 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 rate 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 #hereon at the rate specified 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 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 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
against all liabilities 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 taw 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 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 a!I 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 extension of time for payment. Maker agrees
that any real estate that may be levied upon pursuant to a judgment obtained 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 all 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 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 nsspect to the payment or other provisions of this Note, and to the release of the
coilatera{ 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 remedies hereunder unless such waiver is in writing and signed by Payee, and then only to
the extent specifically 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 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 NEGESSARY 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 any payments 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
shall 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 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 AGREESTHAT ANYACTION OR PROCEEDING AGAINST IT TO
ENFORCE THiS NOTE. MAY BE COMMENCED IN STATE OR FEDERAL COURT IN ANY
COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA IN WH{CH 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 ln, and shall be governed by and construed according to the laws of,
the Commonwealth of Pennsylvania.
The term "Note" as used herein, shah 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 getxter 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 bi-xting 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 sealthe day and
year first above written.
A ST: KEYSTO 10FUELS, INC.
(~(- By: d~'~------~
Allison A. MMner, 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 LEDACY BANK, A DIVISION OF FIRST NATIONAL BANK OF
PENNSYLVANIA (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 replaced, whether one or
more, the "Obligation'. 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 will 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 Oblgor 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 dank 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 Obligor's 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 any properly 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 freely, 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 2 y day of t')G ~ v 1'y , 2006.
~ r
THE OBLIGOR HAS READ THIS EXPLANATION AND WAIVER PRIOR TO SIGNING THE OBLIGA-
TION AND FULLY UNDERSTANDS ITS CONTENTS.
ATTEST:
KEYSTONE BIOFUELS, INC.
' -
~i..i.,~t,.C.,..~._.. By:
Allison A. Miner, Secretary R e IE. Hiner, CEO
COMMONWEALTH OF PENNSYL1fANiA
SS
COUNTY OF ~~mlxr -+~.nt~. .
On the ~ day of ~~~ r 2006, before me, a notary public far said
Commonwealth and County, the. undersigned officer, ~rsonally appeared RACE K. MINER, who'
acknowledged himself to be CEO of IfEYSTONEBiOFUELS, fNC., and that he,_as such o~cer, being
authorized to do so, executed the foregoing Explanation and Waiver of Rights Resting Corfession of
Judgment, for the purposes therein contained by signing the Hamer of the corporatron by himself as such
officer. And said RACE K. MINER, did further certify and acknowledge that he received a tnie, correct
and complete copy of the f+cregoing Explanation and. ViFaiv~sr of Rights Regarding Confession of
Judgment.
IN WITNESS WHEREOF, I have hereunto stet my hand and official seal.
No ' ry Public
~~Ft:V~l~llt,
L ~A1.
.FILL A. S'fAUBH~ P
IVIy ~~ xaro: April 19,
-2-
- -..
~ -
AA4ENDME~TE
(Account #43891
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 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 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
I~Yall Street Journal, plus one half percent (.50%}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 hventy 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 2a, 2021.
5. Reaffirmation and Waiver of Right of Presentment aad 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 ~~ith 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
Page 2 of 5
i
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
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
Bozxower 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 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 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 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. 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
~ J
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 ar enforceability of the Gua!•anty Agreement on any legal or equitable basis because of
the terns 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
sec .) have hereunto set their respective hands and seals on the date above first written.
ATTEST: BORROWER:
KEYSTONE BIOFUELS, INC.
C!X.~a.- `~f.~,.:... By ~ ~--- -(SEAL)
Secretary Race I .Miner, Founder/CEO
~~~ `~,~:.c~. By ~~~"'- (SEAL)
Secretary Ben Wootton, Geer P~„~ .,,~N :-
ATTEST: BANK:
FIRST NATIONAL BANK OF
PENNSYLVANIA
-~ BY ~~ (SEAL
Assistant Secretary Char es M. Wasson, Senior Vice President
CMW/db
Page 4 of 5
i
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, ~ sgq.), hereby acknowledge and
consent to the foregoing Agreement this ?,,~~ay of~~~ 2008.
G~r--
~tness
Witness
V ~- ~~
Race K. Miner
Ben Wootton
Page 5 of 5
a +
SECOND AMENDMENT TO NOTE
(Account #43891960)
This Amendment to Note (hereinafter "Amendment") made this ~ day of G.i~~ , 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) together with interest thereon
(hereinafter refecnd to as the "Note"); and
WHEREAS, the parties hereto desire to amend the Nate 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 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 teams of the Note is and
shalt be Seven and Six Hundredths percent (7.06%) fixed unfit 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%), 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 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
Page 1 of S
~ a
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 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 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 Notlce 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 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 force and effect and
shall survive the execution of this Amendment.
8. Severability. If 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.
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
a ~
exercise the same upon any subsequent failures of Borrower to strictly comply with the terms of
the Note or this Amendment.
10. Governing La~v; 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 shalt 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 for the convenience of the
parties hereto, and such fact shall be irrelevant in the construction and interpretation of the same;
rather, this Amendment shalt be construed and interpreted liberally for the purposes set forth
herein.
13. Successors Bonnd; 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 se# 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 in 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 limit
or restrict the provisions as set forth herein or considered in the construction and interpretation of
this Amendment,
Page 3 of 5
~ r
16. Headnotes. The headnotes contained at the beginning of the paragraphs herein are inserted
for the convenience of reference only and the same shalt 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.
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
validi#y or enforceability of the C3uaranty 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
~.) have hereunto set their respective hands and seals on the date above first written.
ATTEST:
BORROWER:
KEYSTONE BIOFUELS, INC.
L)
ATTEST: BANK:
FIRST NATIONAL BANK OF
PENNSYLVANIA
By ~ v - ~`----- (SEAL)
Assistant Secre ary Charles M. Wasson, Senior Vicc President
CMW/ml
Page 4 of 5
By (SEAL)
Ben T. Wootton, President
r r
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, ~ ems.), hereby acknowledge and
con nt to the foregoing Agreement this ~f day of~i~..•~ , 2008.
~ ~ __--
Rac K. Miner
Ben T. Wootton
Page S of 5
EXHIBIT "D"
To Complaint in Confession of Judgment
i ~
$670,000.00 October 24, 2008
Harrisburg,. Pennsylvania
TERM. NOTE C
FOR VALUE RECEIVED, and intending to be legally bound, KEYSTONE BIOFUELS, IND., a
Pennsylvania corporation, with offices at 485 St. John's Church Road, Suit®110, Shiremanstown,.
Pennsylvania 17011 (hereinafter calved "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 time,
direct Maker in writing, the principal sum of Slx Hundred Seventy Thousand Dollars ($870,000:00),.
lawful money of the United Staters of America, ar such lesser amount as may have been advanced
by Payee to ar 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 6.95Rt per armum, at the times and in the manner
as follows:
Maker shall. make monthly inter®st only payments on the outstanding principal
balance for twelve (12y .months; commencing November 24, 2006: Thereafter,
commencing November 24, 2007, and continuing monthly thereafter an the same
day of each month, Maker shall monthly pay to Payee fixed payments of principal
and interest in the amount of $ 1 t ~ Q 7~ ~ . 4 b each, The final installment, unless
sooner paid, shall be due and payable on or before October 24, 201:3.
Interest shall be calculated on the basis of the actual number of days. in the current calendar
year divided. by 380. Interest shall be payable as provided herein. All then accrued and unpaid
interest shalt also bs payabt,et where the. entire prihcipal balance of this. Note becomes due and.
payable (whether by stated ma~rity, demand or acceleration) or, if earlier, when such principal
balance is actuallyt 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 judgrne~ 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 alt interest accrued
hereunder to the date of prepayment. Each partial prepayment shalt. be applied against thee:
installments of principal last (by date) due and payable;.. and na prepayment shall postpone. or
interrupt payment of future ihstallmen#s of principal and interest, which shah continue to be due and
payable until payment hereof in full. Prepaid principal may not thereafter be reborrowed.
If shy payment hereunder is not paid when due, and continues unpaid far a period aften(10)
days thereafter, Makeragrees to pay to Payee as a late charge an amount carnputed at a rate of
eight percent (i3.0%~ of such past due:amount. The lava charge shall be in addition to any interest
due. Notwithstanding the foregoing, in na event shall any late charge be less than#en dalfars ($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 Agreemerrt, 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 their terms.. This
Note is a Note referred to in the: Loan Agreement:
~ ~
This Note, the Loan Agreement, and tha 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 be due on demand and shalt 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 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) ~ 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 irtisolvent; voluntarily
suspends transaction of its business yr 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;
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, warrantor other process remains unstayed, unbonded or unreleased
for a period of thirty (3t}) days following entry or issuance; or
5. if any dissolution, merger, consolidation 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 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 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
-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 rate of interest accruing on the unpaid
balance of the principal sum of this Note by four percentage (496) paints above the rate of interest
otherwise applicable, independent of whether Payee elects to accelerate the unpaid principal
balance as a resuk 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 specified 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
noiwithstanding; 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 irrtereat on any ju~ment obtained by
Payee at the rate provided herein from time to time, including interest at that rate from and after the
date of any Sherift"s 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 liabilities 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, successively or together at
the sole discretion of Payee, and may be exercised as often as occasion therefor shad 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 lay 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 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, performance, default or enforcement of the payment of
this Nate, and agrees that its liability 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 ail 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-
~ i
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 onty to
the extent specifically 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 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 liability of Maker for
payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest
permitted by appdcable law to be contracted for, charged or received, and if any payrrrents 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
shall 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 bylaw, any non-principal payment (except payments specifically
stated in this Note to be "interest"), including without limitation prepayment premiums and late
charges, shad 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 uner~fiorceability, and
such prohibition or unenforceability shall not invalidate the balance of such provision to the extent it
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 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 IT 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 AND AGREE THAT A
SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH
COURT SHALL BE PROPERLY SERVEDAND SHALL CONFER PERSONAL JURISDICTION IF
SERVED 8Y 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
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" 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 WHEREOF, the Maker has duly executed this Note under seal the day and
year first above written.
ATT T: KEYS BI~FUELS, INC.
Allison A, Miner, Secretary R ce K. Mner, CEO
-5-
s ~
AMENDMENT TO NOTE
(Account~~91965)'
This Amendment to Note (hereinafter "Amendment") made this ~~day of TAN~~, 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 ($670,000.00) 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 (b.95%) fixed per annum (the "Applicable
Rate"). The Applicable Rate shall be calculated on a 365-3b0 day basis, as provided for in the
Note.
3. Monthiy 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 Doilazs 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
_ w
~ r
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. Severabiiity. 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 nat constitute a waiver of Bank's xights 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 al! 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 5
...
•
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 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 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 ai 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. 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
tlus Amendment as fully executed and acknowledged shall be as valid and enforceable as the
original hereof.
Page 3 of 5
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18. Guarantors' Consent and Estoppel. The terms of this Amendment are hereby expressly
acknowledged and consented to by the undersigned guarantors of the Nate, 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
sec .) have hereunto set their respective hands and seals on the date above first written.
ATTEST: BORROWER:
KEYSTONE BIOFUELS, INC.
l~as.. `~~:.,, By ~.,.` ~ -..,:.,,, (SEAL)
Secretary Race K. Miner, Founder/CEO
~~~ ~f~ BY -a (SEAL)
Secretary Ben Wootton, Centroiier ~,~, ~.,,,..
ATTEST: ggNg;
FIRST NATIONAL BANK OF
PENNSYLVANIA
~°~ f,
M~~„_..
By '~-~-" (SEAL)
Assistant Secretary Charles M. Wasson, Senior Vice President
CMW/db
Page 4 of S
# ~
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. §l, et sue.), hereby acknowledge and
consent to the foregoing Agreement this 3~~ay of _, 2008.
'y~~
/~'~--
ness
G/
t ness
Race K. Miner
._.__
Ben Wootton
Page 5 of 5
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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 refen~l 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} 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 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 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 far in the
Note.
3. Monthly Fayments 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 Nina Hundred Forty One Dollars and Forty Eight
Cents ($12,941.48), as billed in accordance with the Applicable Rate as stated above, beginning
Page 1 of S
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October 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 tho payment is due. Monthly Applicable Payments shall be
applied first to lato 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 duo and payable on October 24, 2013.
S. Reaffirmation and Waiver of Right of Presentment and Notice of Dishonor. Borrower
hereby unconditionally reaffirms and acknowledgos 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. 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 tho torms 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 Dofault for tho 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 Noto 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
Page 2 of 5
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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 TN CONNECTION
HEREWITH.
11. Modifkationa 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 dratted 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 acquiro 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. 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 thermographicall~reproduced copy of
this Amendment as fully executed and acknowledged shall be as valid and enforceable as the
original hereof.
Page 3 of S
f
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 ec}uitable 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
seg.) have hereunto set their respective hands and seals on the date above first written.
BORROWER:
(SEAL)
BY _ (SEAL)
Ben T. Wootton, Presfdent
ATTEST: BANK:
FIR5T NATIONAL BANK OF
PENNSYLVANIA
B .~~ ~
Y (SEAL}
Assistant Sec ary Charles M. Wasson, Senior Vice President
CMW/ac
Page 4 of 5
ATTEST:
KEYSTONE BIOFUELS, INC.
r ~
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, ~ sue.), hereby acknowledge and
cons to the foregoing Agreement this
c
a...~
WiMess
~-_
Witness
2S'day of~ 6.i `~ , 2008.
Race Miner
Ben Wootton
Page 5 of 5
VERIFICATION
First National Bank of
Pennsylvania, including
J. Martin Dell, Special Assets Officer and duly authorized representative of,~.,egacy Bank,
a Division of First National Bank of Pennsylvania deposes and says subject to the penalties of 18
Pa. C.S.A. ' 4904 relating to unsworn falsification to authorities that the facts set forth in the
foregoing Complaint in Confession of Judgment for Money are true and conect to his
information and belief.
J. ~ in Del l
pecial Assets Officer
^_
..<
IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA
FIRST NATIONAL BANK OF CNIL DIVISION
PENNSYLVANIA, successor by merger to
The Legacy Bank, NO.:
Plaintiff,
vs.
KEYSTONE BIOFUELS, INC.,
Defendant.
NOTICE OF ORDER. DECREE OR JUDGMENT
TO: Keystone Biofuels, Inc.
2850 Appleton Street, Ste E
Camp Hill, PA 17011
Attn: Ben T. Wootton, President/CEO
( ) Plaintiff
(X) Defendant
You are hereby notified that an Order, Decree or Judgment was entered in the above-
captioned proceeding on t ),~4~_~~ , 2012.
OR
( ) A copy of the Order or Decree is enclosed,
(X) The judgment is as follows:
$4,017,270.95, with interest on the principal sum ($3,908,071.67) at the default rate from
December 17, 2012 (a per diem of $1,200.64), as may change from time to time in
accordance with the terms of the $5,000,000 Note, plus costs and expenses of suit, and
reasonable attorneys' fees as provided for under the $5,000,000 Note, and brings said ''"""
instrument to Court to recover said sum.
$254,768.89, with interest on the principal sum ($247,841.37) at the default rate from
December 17, 2012 (a per diem of $76.14), as may change from time to time in
accordance with the terms of the $330,000 Note, plus costs and expenses of suit, and
~_
~ L(
reasonable attorneys' fees as provided for under the $330,000 Note, and brings said
instrument to Court to recover said sum.
$178,639.43, with interest on the principal sum ($171,934.58) at the default rate from
December 17, 2012 (a per diem of $52.29), as may change from time to time in
accordance with the terms of the $670,000 Note, plus costs and expenses of suit, and
reasonable attorneys' fees as provided for under the $670,000 Note, and brings said
instrument to Court to recover said sum.
Aggregate amount of judgment as of December 17, 2012: $4,450,679.27
cx~ f
Deputy