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HomeMy WebLinkAbout13-7678 Supreme Cour rof Pennsylvania Court otCoinmo leas For Prothonotary Use Only: C yil Coel�r Sheet Ott- Docket No: S� CUMB ND County I The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service ofpleadings or other papers as required by law or rules of court. Commencement of Action: S Xi Complaint n Writ of Summons n Petition Transfer from Another Jurisdiction Declaration of Taking E C Lead Plaintiff's Name: Lead Defendant's Name: T Precision Filtration Products, Inc. Keystone Biofuels, Inc., et al I Are money damages requested? Dollar Amount Requested: nwithin arbitration limits Yes 8 No O (x (check one) outside arbitration limits N Is this a Class Action Suit? n Yes El No Is this an MDJ Appeal? Yes El No A Name of Plaintiff /Appellant's Attorney: William J. Levant, Esquire Check here if you have no attorney (are a Self - Represented [Pro Sel Litigant) Nature of the Case Place an "X" to the left of the ONE case category that most accurately describes your PRIMARY CASE. If you are making more than one type of claim, check the one that you consider most important. TORT (do not include Mass Tort) CONTRACT (do not include Judgments) CIVIL APPEALS n Intentional ® Buyer Plaintiff Administrative Agencies Malicious Prosecution Debt Collection: Credit Card n Board of Assessment Motor Vehicle n Debt Collection: Other Board of Elections n Nuisance Dept. of Transportation n Premises Liability U Statutory Appeal: Other S n Product Liability (does not include E mass tort) 0 Employment Dispute: Slander/Libel/ Defamation Discrimination C iL Other: ©Employment Dispute: Other Zoning Board T Other: I 0 Other: O MASS TORT El Asbestos N n Tobacco ❑ Toxic Tort - DES Toxic Tort -Implant REAL PROPERTY MISCELLANEOUS ICS Toxic Waste Other: n Ejectment n Common Law /Statutory Arbitration B n Eminent Domain /Condemnation n Declaratory Judgment ® Ground Rent Mandamus Landlord/Tenant Dispute Non - Domestic Relations IJ Mortgage Foreclosure: Residential Restraining Order PROFESSIONAL LIABLITY [3 Mortgage Foreclosure: Commercial Quo Warranto Ci Dental 0 Partition E) Replevin n Legal E Quiet Title n Other: I❑ Medical ❑ Other: IJ Other Professional: Updated 1/1/2011 KAPLIN STEWART MELOFF REITER & STEIN, P.C. C -, By : William J. Levant, Esquire Q _j I.D. No. 54286 Attorney for Plaintiff 910 Harvest Drive Post Office Box 3037 Blue Bell, PA 19422 (610)260 -6000 - -� Telecopier (610)684 - 2020% �= wlevantCa_)kanlaw.corn PRECISION FILTRATION PRODUCTS, Inc. COURT of COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PA vs. KEYSTONE BIOFUELS, Inc. and KBI INDUSTRIES, Inc. and 2850 APPLETON ASSOCIATES, L.P. Defendants No. ll1 NOTICE TO DEFEND You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the court without further notice for any money claimed in the complaint or for any other claim or relief requested by the plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO or TELEPHONE the OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU with INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 S. Bedford Street Carlisle, PA 17013 (717)249 -3166 Q- a KAPLIN STEWART MELOFF REITER & STEIN, P.C. By : William J. Levant, Esquire I.D. No. 54286 Attorney for Plaintiff 910 Harvest Drive Post Office Box 3037 Blue Bell, PA 19422 (610)260 -6000 Telecopier (610)684 -2020 wlevanta- kaplaw. com PRECISION FILTRATION PRODUCTS, Inc. COURT of COMMON PLEAS 3770 Layfield Road Pennsburg, PA 18073 Plaintiff CUMBERLAND COUNTY, PA vs. KEYSTONE BIOFUELS, Inc. c/o Wilcoxon Consulting, LLC 16 North Washington Street, Suite 102 Easton, MD 21601 t and KBI INDUSTRIES, Inc. c/o Wilcoxon Consulting, LLC 16 North Washington Street, Suite 102 Easton, MD 21601 and 2850 APPLETON ASSOCIATES, L.P. Attn : Steven D. Brand 633 West Germantown Pike, Suite 104 Plymouth Meeting, PA 19462 Defendants No. COMPLAINT in REPLEVIN Plaintiff, above named, by its attorneys, KAPLIN STEWART MELOFF REITER & STEIN, P.C., avers the following claims against the Defendants 1. Precision Filtration Products (the "Plaintiff "), is a Pennsylvania business corporation, with an office located at the above- stated address. 2. Defendants Keystone Biofuels, Inc. ( "Keystone ") and KBI Industries, Inc. ( "KBI ") are Pennsylvania business corporations, with a last -known address as shown above. 3. 2850 Appleton Associates, L.O. ( "2850 Appleton ") is a Pennsylvania limited partnership, with a place of business in care of its principal as stated above. 4. 2850 Appleton is the owner of the location where Keystone and KBI (the "Obligors ") conduct (or last conducted) their business. 5. 2850 Appleton is not liable to'the Plaintiff under the terms of the equipment leases hereinafter described; it has been named as a Defendant herein solely because the Obligorsmay have abandoned their former business premises, leaving the leased equipment behind - and thus in the possession of - 2850 Appleton. 6. On or about August 3, 2011, Keystone and the Plaintiff entered into a Lease Agreement (the "Keystone Lease "), by which Keystone agreed to lease certain equipment (the "Keystone Leased Equipment ") from the Plaintiff, on a month -to -month basis, on certain terms and conditions more particularly set forth therein. 7. A true and correct copy of the Keystone Lease is attached as Exhibit "A ". 8. On or about November 25, 2011, KBI and the Plaintiff entered into a Lease Agreement (the "KBI Lease "), by which KBI agreed to lease certain equipment (the "KBI Leased Equipment ") from the Movant, on a month -to -month basis, on certain terms and conditions more particularly set forth therein. 9. A true and correct copy of the KBI Lease is attached as Exhibit "B". 10. The Keystone Lease and the KBI Lease (the "Leases ") are each in default because the respective lessees have failed to make payments as and when due thereunder. 11. Notice of default was sent to each of the Obligors on October 30, 2013. 12. A copy of the Notice of Default is attached as Exhibit "C". 13. The Obligors have not cured their defaults, and more than five days have passed since the notices of default were mailed. 14. As a consequence of the foregoing defaults and as more specifically set forth in the Leases, Plaintiff is lawfully entitled to the immediate possession of the Keystone Leased Equipment and the KBI Leased Equipment (collectively, the "Leased Equipment "). 15. Plaintiff has made demand upon Defendants for possession of the Leased Equipment, Defendants have failed or refused to turn over the Leased Equipment to the Plaintiff. 16. Plaintiff believes that the present fair market value of the Leased Equipment does not exceed $100,000.00. 17. All conditions precedent hereto have been satisfied or waived. WHEREFORE, Plaintiff respectfully prays that this Honorable Court grant judgment in the nature of possession of the Leased Equipment, together with such other relief as may be appropriate under the circumst S. KAPLIN TEW OFF REITER & STEIN, P.C. B Wiliam J. Le Esquire torneys for tiff Date : December 20, 2013 EXHIBIT "A" Aug 1511 03:49p Keystone BioFuels Inc, 717361.6035 p,3 P recision i1trationDrode C is F P.O. Box 218 Pennsburg, PA 18073-0218 Phone: 215-679-6645 Fax. 215-679-6648 www.precisionfiltration.com LEASE AGREEMENT This Lease Agreement made this 3rd day of August 2011 by and between Precision Filtration Products, with an office at 3770 Layfield Rd., Box 218, Pennsburg, PA, 18073 (hereinafter rererred to as "Lesser`') and, Keystone BioFuels, Inc, (hereinafter referred to as 'Lessee'). Witnesseth that, Lesser does hereby lease to Lessee, and Lessee does hereby lease from Lesser, certain equipment more particularly described as follows: #Model Now CPHF03-1606-606-1475CS-7-P8 Equipment to be located and operated at: Camp Hill, PA 1. Lesser hereby leases to Lessee and Lessee hereby leases from Lesser the Equipment hercinabove described, This Lease shall commence on the 8th day of August, 2011 and shall continue for a minimum period of one rr.onth, and shall terminate on the 8th day of September, 2011, unless otherwise extended or renewed in accordance With the terms hereof. Rental payments shall begin on the commencement date. All sums shall be payable as rent at the office o' the Lesser, or as otherwise directed by Lesser in writing. Z Lessee shall pay to Lesser, as rent, the sum of $2,400,00 per month or part thereof, for the Equipment being ]eased. A month is defined as 4 Weeks. RgnLshall be payable month in advance, if the unit does not arrive at a PFP location before the end of the second month rental for an additional month may be charged. Simultaneously with the execution of the Lease Agreernent. Lessee shall be responsible for and shall pay all sales or use taxes, tariff, duty or any other taxes arising here frorr, in addition to the rental payments hereinabove set forth. 3. A cleaning deposit in the amount of $1,600.00 will be required in advance. Xi or a portion of the cleaning deposit will be refunded upon inspection of rental equipment Please note if rental equipment is returned damaged or requires extensive cleaning, additional charges will apply. 4. Lesser makes no warranties, expressed or implied, with respect to the Equipment. This disclaimer and warranty agreement is expressly in lieu of any and all representations and warranties expressed or implied, including ary implied warranty of merchantability or fitness for a particular purpose, whether arising from statute, common low, custom or otherwise. Lesser shall not be liable for any consequential and incidental damages resulting from the use of the Equipment, or caused by any defect, failure or malfunction whether a claim for such damage is based upon war rantt, contract, and negligence or otherwise- Lessee acknovAedges that the leased equipment is sele. solely by Lessee as suitable for its purpose, and that Lesser has made no representation or warranty with respect to the suitability or durabi _ty of the ecuipmen Lessee acknowledges tha neither the supplier, nor any salesman, employee, representative , or agent of the supplier is an agent or representative of the Lesser and that no one is authorized to make any representation or warranty with respect to this Lease or the Equipment leased here above. No defect or unfitness of the Equipment shall relieve Lessee of the obligation to pay rent or of any other obligation under this Lease. 5. Lessee accepts the leased Equipment in 'as is" condition and further aSrees to maintain said Equipment in good condition and to make all necessary repairs thereto, and, at the expiration of the Lease, to redeliver the Equipment to Lesser in as good condition and state of repair, The unit is to ,be QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING ........ . ...... ' Aug 15,11 03:49p Keystone BioFuels Inc. 717,761,6035 p,4 recision r: atrafion Droducts P.0, Box 218 Pennsburg, PA 18073-0218 Phone: 215-679-6645 Fax: 215-679-6648 www.precisionfiltration-com - returned without particle arid vacuum chamber elements.and drained of all oil, if the unit is not drained and free of elements a cleaning fee may be charged. 6. Lessee further agrees to be responsible for all tEan§ rtation costs of the equipme fro P-2 - Rt Ln Eesser's,faciiiIii!y to Lessee's location and its return to Lesser's facility. The preferred method of shipment is freight collect. 7. Lessee further specifically warrants and represents that the leased Equipment shall not be exposed to such conditions that will or may cause damage or deterioration of the Equipment, other than normal wear and tear from. its intended use. & It is understood and agreed between the parties that the Equipment being leased will or may be exposed to chemical substances which may include toxic or hazardous substances and some of which substances may be subject to local, state or federal regulations. Lessee specifically warrants and represents that the Equipment will be completely flushed, cleaned and purged of any and all process residue so that the Equipment will be environmentally clean prior to its redelivery to Lessee's plant, and Lessee shall certify said Equipment 's being cleaned and purged by its own certification If acceptable to Lesser, or the ..certification of such environmental testing company as Lesser may reasonably require. Prior to certification. Lessee shall conduct a witnessed 'wipe test" which test and results shall be approved by Lesser's personnel at Lessee's expense, 9. Lessee further agrees to keep the Equipment being leased insured against loss or damage on an 'all risk' basis for an amount of property damage not less than (monetary amount; than expanded in words) and to name Lesser as loss payee on said policy and to deliver said ce rtificate policy or thereof to Lesser not less than two (2) days prior to Lessee's acceptance of the Equipment. Said coverage shall include misuse by Lessee as a covered risk. Lessee shall further provide public liability insurance for any damage, loss, injury, or death arising from Lessee's possession and use of the Equipment, which said insurance shall name Lesser as additional insured in an amountof not less than Two Million Dollars ($2,000,000.00). Lessee shall provide said policy prior to Lessee's acceptance of the Equipment. Lessee shall not assign, mortgage, or hypothecate this Lease, or sub- lease the Equipment to any part thereof_ 10. This Lease shall be subject to and interpreted under the laws of the State of Pennsylvania, and Lesser and Lessee expressly agree that courts of the State of Pennsylvania shall have exclusive jut.sdiction over any dispute arising hereunder. 11, This Lease is specifically subject to the terms and conditions set forth on the Rider attached hereto and made part hereof, which terms and conditions consist of ten (10) items an three (3) pages and which Lessee acknowledges having read and approviec, QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING ............ . .. . . . . ........ . . ....... WUALI I T AIM. UAS. AND LIOUID 1=111 TRATION PRnnI U-TS Aug 1511 03:49p Keystone Biopuels Inc. 717.761.6035 p.6 , recision F . iltration D roduc - ts P.O. Box 218 Pennsburg, PA 18073 -0218 Phone. 215 - 579 -6545 Fax: 215- 579 -6648 www.precisionfiltration.com RIDER — TERMS AND CONDITIONS 1. Lessee shall use Equipment, lawfully and solely in the conduct of its business, and in a careful and proper manner and in compliance with the requirements.of all written warranties or guarantees relating to the Equipment so as to make same enforceable according to their or its terms, and shall not part possession of or enter into any sub lease with respect to Equipment or any part thereof or assign this lease or its interest hereunder without the prior written consent of Lesser. Lessee at its own cost and expense shall keep Equipment in good repair, condition, and working order and shall furnish any and all parts and labor required for that purpose. Lessee shall not make any material alternations or attach accessories to Equipment without the prior written consent of Lesser. All Equipment, accessories, and parts, and replacements therefore, which are added to or become attached to Equipment shall immediately become the property of Lesser and shall be deemed incorporated in Equipment and subject to the terms of this lease as if originally leases: hereunder. The Equipment shall be deemed personal property and shall .not be affixed to realty. 2. Time is of the essence of this agreement and In the event that any payment required to be made hereunder is not received by Lesser within 5 days from its due date, Lessee agrees to pay, immediately, in addition to and with said payment, to the extent allowed by law, a delinquency charge equal to 3% of the amount of said payment in arrears and 1 % per month from date due, or such lesser amount as is the maximum permitted by lava, such delinquency charge to be in addition to attomey's fees and other fees incurred in connection with the collection of said payment and such delinquency charge. 3. Lessee hereby assumes and shall bear the entire risk of loss of any damage from every cause whatsoever, except any loss or damage resulting from an'act or omission by Lesser. No loss of or damage to Equipment or any part thereof shall impair any obligation of Lessee under this lease. In the event of damage of any kind whatever to any item of Equipment (unless the same is damaged beyond repair), Lessee, at the option of Lesser, shalt at Lessee's expense place the same in good repair, condition and working order, or replace the same with ,like Equipment of the same make and of the same or a later model, and in good repair, condition and working order. 4. Lessee, at its expense, shall keep Equipment insured against all risks of loss or damage from every cause whatsoever, and shall carry public liability insurance, both personal injury and property damage. covering Equipment in amounts heretofore set forth in the Lease Agreement. All said insurance shall be in form and amount and with companies satisfactory to Lesser. In case of the failure of Lessee to procure or maintain said insurance or to comply with any other provision of this Lease, Lesser shall have the right, but shall not be obligated, to affect such insurance or compliance on behalf of Lessee, at Lessee's expense. Lessee shall comply with all laws and regulations relating to, and shall promptly pay when due, all license fees, registration fees, assessments, charges and taxes, municipal, state and federal, which may now, or hereafter be imposed upon the ownership, possession, leasing, renting operation, control, use, maintenance, delivery and/or return of Equipment, excluding however, any taxes payable In respect to Lesser's income, and shall save Lesser harmless against actual or asserted violations, and pay all costs and expenses of every character in connection therewith or arising there from. Lessee appoints Lesser, Lessee's'attorney in fact to endorse any loss payment or returned premium ;heck and to make any claim under such insurance. Said policies shall be endorsed with loss payable to Lesser, and shall contain provisions (a) that such insurance may not be canceled except upon ten (10) days notice thereof to Lesser and (b) that the interest of Lesser shall not be invalidated by any act of Lessee. The policies of insurance or certificates thereof shall be QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING I ,Aug 15,11 03:49p Keystone BioFuels Inc. 717361.6035 p1 recision iitration Droducts I . F P.O. Box 218 Pennsburg, PA 18078 -0218 Phone: 215 -670 -6645 Fax: 215 -679 -6648 www.precisionfiltration.com delivered to Lesser. In the event of loss. destruction or theft of or damage to any of the Equipment, Lessee will immediately notify Lesser in wrlting. The loss, destruction, theft of or damage to the Equipment shall not relieve the Lessee from its obligation to pay the full rental payable hereunder. Any sums collected from insurance The the total loss of any of the Equipment shall be credited to the final installments of rent payable hereunder. If any of the Equipment is partially damaged; Lessee shall repair such damage at its own cost and expense and any sums collected from insurance on account of such damage shall be applied to the cost thereof, but on default of the Lessee in repairing such damage within thirty (30) days of the occurrence thereof, the sums collected therefore shall be applied to the last rnatur'mg installments of rent payable hereunder or to the repair of the Equipment at Lessees option. If Lessee shall default In obtaining any insurance so to be provided Lesser may place such insurance. Any premiums paid therefore by Lesser shall be additional rent payable on demand with interest at the highest legal rate from the date of payment. Notwithstanding the provisions of this paragraph, Lessee will save Lesser harmless against any such claim or liability (including attomey's fees and costs and expenses for the defense thereof) arising out of the ownership, use or operation of the Equipment during the period of this Lease and until the Equipment is returned to and accepted by the Lesser. 5. Title to Equipment shall at all times remain with Lesser, and Lessee at its own cost and expense shall protect and defend the title of Lessor for defects in title of Lesser due to Lessee. Lessee shall at all times keep Equipment free and clear trom all levies, attachments, liens, encumbrances and charges or otherjudicial process of every kind whatsoever, shall give Lesser immediate written notice thereof, and shall indemnify and save Lesser harmless from any loss or damage caused thereby. Lessee will cooperate with Lesser and take whatever action may be deemed necessary by Lesser at Lessees expense to enable Lesser to rite, register, or record, and re -file, re- register or re- record, this Lease, which also constitutes a Security Agreement granting a security interest in favor of Lesser in the Equipment and a financing Statement to perfect security interest in the Equipment and the Lesser, in such offices as Lesser may determine and whatever required or permitted by law, for the proper protection of Lessee's title to or the proper, protection and perfection of Lesser's security interest in the Equipment. Lessee warrants and represents to Lesser its place of business is located at the address set forth above as part of Lessee's address and that the Equipment shall not be moved from such location without prior written consent of Lesser. Lessee shall notify Lesser promptly of any change in the location of any of Lessee's pieces of business and of the establishment of any new place of business. The Equipment will remain free from any other interest, lien, or encumbrance whatever expecting for the security interest created by the tease. The Equipment will be kept separate and capable of identification to the fullest extent possible. If any of the Following events occur with respect to Lessee; Death (of an individual); dissolution (of a partnership or corporation), death or suspension of the usual business activities of any number of such partnership; complete or partial liquidation or suspension of Lessee's usual business; filing of a voluntary or involuntary petition under any of the provisions of the Bankruptcy Act or amendments thereto; application for or the appointment of a receiver of the persons or property; assignment for the benefit of any creditors; entry of judgement or issuance of an order or warrant of attachment or execution; filing or issuance of a notice of lien, warrant for distraint or notice of levy for taxes; making or sending notice of an intended bulk sale or the commencement of any proceedings to enforce a judgement; then and in any such event, the entire glance of the unpaid installments of rent become immediately due and payable and Lessee's right to continue in possession of the Equipment shall thereupon cease all without notice or demand. in any of such events, in addition to any other right or remedy permitted by law, it shall be lawful for Lesser and Lessee hereby authorizes and empowers lesser with the aid or assistance of any persons QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING ,I Aug 1$11 03:50p Keystone.BioFuels Inc. 717.751.6035 p.8 recision iitration roducts P.U. Box 218 Pennsburcg, PA 18073 -0218 Phone: 215 - 679 -6645 Fax: 215- 679 -6648 www.orecisionfiltration.com to.enter upon the premises or such other places as the Equipment niay be found arid take possession of and carry away the Equipment without process of law. Upon such repossession of the Equipment, the Lesser shall have the right to sell the Equipment at public or private sale with the right of Lesser to purchase any or all of the Equipment at such sale to pay all charges and expenses incurred by Lesser in connection with or incidental to the repossession (including a reasonable attorney's fee), storage, preparation for sale and sale, and to credit the remainder of the sale price to the unpaid balance of the rent hereunder the Lessee to remain liable for any deficiency. No remedy is exclusive of another or waived by non-use- 6. If Lessee shall default in the payment of any rent or in the performance -of any other covenant or obligation therein and such default shall continue for five days after written notice thereof is sent to Lessee, or if the nature of the business conducted, location, ownership or financial condition of Lessee shall change in any manner whatsoever, then to the extent permitted by applicable law, Lesser shall have the right to declare the entire amount of unpaid total rent for the glance of the term of this lease due and payable, whereupon the same shall become immediately due and payable. The extent permitted by applicable law, Lesser shall have the right with or without demand or legal process, to enter into premises where Equipment may be found and take possession of and remove the same, whereupon all rights of Lessee in Equipment shall tenninate absolutely. 7. If any provisions of this lease are in conflict with any statute or rule of law of any state or territory wherein it may be sought lobe enforced, then such provision shall be deemed null and void to the extent that they may conflict therewith, but without invalidating the remaining provisions hereof. This lease shall be binding upon the Lesser and Lessee and their respective legal representatives, successors and assigns. This lease contains the entire agreement between the parties, and may not be charged, modified, terminated or discharged except in writing. No defector unfitness of the Equipment shall relieve Lessee of the obligation to pay rent or of any other obligation. 8. Lessee shall be required to execute such additional documents, financing statements as may reasonably be requested by the Lesser to record its interest in the Equipment, to establish continued financial responsibility, or to correct a document which does not accurately set forth the agreement between the parties. 9. All notices hereunder shall be in writing and mailed by registered mail to the ,parties hereto at the address indicated above for each. 10. This lease constitutes the entire agreement of the parties with respect to the subject matter thereof, may not be changed or modified except in writing and shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto. Lesser: Precision Filtration Products Lessee: KeystoheBioFuels, Inc. QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING EXHIBIT "B" recision it ra ion Droducts P.O. Sox 218 Pennsburg, PA 18073 -0218 Phone: 215- 679 -6645 Fax: 215-679-6648 www.precisionfiltration.com LEASE AGREEMENT This Lease Agreement made this 25th day of November, 2011 by and between Precision Filtration Products, with an office at 3770 Layfield Rd., Box 218, Pennsburg, PA 18073 (hereinafter referred to as "Lessor ") and, KBI Industries (hereinafter referred to as Lessee "): witnesseth that, Lessor does hereby lease to Lessee, and Lessee does hereby lease from Lessor, certain equipment more particularly described as follows; #Model No- DPHF03 -1606- 846- 1475GS -7 -PS (Qty. 2) Equipment to be located and operated at: KBf Industries, Camp mill PA 1. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the Equipment hereinabove described. This Lease shall commence on the 5th day of December, 2011 and shall continue for a minimum period of one Month, and shall terminate on the 5th day of January, 2011 unless otherwise extended or renewed in accordance with the terms hereof. Rental payments shall begin on the commencement date. Ail sums shall be payable as rent at the office of the Lessor, or as otherwise directed by Lessor in writing. 2. Lessee shall pay to lessor, as rent, the sum of $2,440.00 each ($4,800.00 total) per month or part thereof, for the Equipment being leased. A month is defined as 4 weeks. Rent. shall be payable_per month in advance. It the unit does not arrive at a PFP location before the end of the second month rental for an additional month may be charged. Simultaneously with the execution of the Lease Agreement, Lessee shall be responsible for and shall pay all sales or use taxes tariff, duty or any other taxes arising here from, in addition to the rental payments hereinabove set forth. 3, A cleaning deposit in the amount of $1,000.00 each ($2,400.00 total) will be required in advance. All or a portion of the cleaning deposit will be refunded upon inspection of rental equipment. Please note it rental equipment is returned damaged or requires extensive cleaning, additional charges will apply. 4. Lessor makes no warranties, expressed or implied, with respect to the Equipment. This disclaimer and warranty agreement is expressly in lieu of any and all representations and warranties expressed or implied including any implied warranty of merchantability or fitness for a particular purpose, whether arising from statute, common taw, custom or otherwise. Lessor shall not be liable for any consequential and incidental damages resulting from the use of the Equipment, or caused by any defect, failure or malfunction whether a claim for such damage is based upon warranty, contract, and negligence or otherwise. Lessee acknowledges that the leased equipment is selected solely by Lessee as suitable for its purpose, and that Lessor has made no representation or warranty with respect to the suitability or durability of the equipment. Lessee acknowledges that neither the supplier, nor any salesman, employee, representative or agent of the supplier is an agent or representative of the Lessor and that no one is authorized to make any representation or warranty with respect to this Lease or the Equipment leased here above. No defect or unfitness of the Equipment shall relieve Lessee of the obligation to pay rent or of any other obligation under this Lease. 5, Lessee accepts the leased Equipment in "as is" condition and further agrees to maintain said Equipment in good condition and to make all necessary repairs thereto, and, at the expiration of the Lease, to redeliver the Equipment to Lessor in as good condition and state of repair. The unit is to be QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING .... . ..... P recision i1tration Droducts F P.O. Box 218 Pennsburg, PA 18073-0218 Phone: 215-679-6645 Fax: 215-679-6648 www.precisionfi,ltration.com re—turneo without garticle and_ vacuum chamber elemgnts and drained of all oil. Jf the unit is not drained and free of elements a cleaning fee may be charged. 6. Lessee further agMs to be responalkle for all transportation casts of the egulymeet from Lessor's facility to Lessee's location and its return to Lessor's facility The preferred method of shipment is freight collect. 7. Lessee further specifically warrants and represents that the leased Equipment shall not be exposed to such conditions that will or may cause damage or deterioration of the Equipment, other than normal wear and tear from its intended use. 8. It is understood and agreed between the parties that the Equipment being leased will or may be exposed to chemical substances which may include toxic or hazardous substances and some of which substances may be subject to local, state or federal regulations. Lessee specifically warrants and represents that the Equipment will be completely flushed, cleaned and purged of any and all process residue so that the Equipment will be environmentally clean prior to its redelivery to Lessor's plant, and Lessee shall certify said Equipment is being cleaned and purged by its own certification if acceptable to Lessor, or the certification of such environmental testing company as Lessor may reasonably require. Prior to certification, Lessee shall conduct a witnessed 'Wipe test" which test and results shall be approved by Lessor's personnel at Lessee's expense. Lessee further agrees to keep the Equipment being leased insured against loss or damage on an "alf risk" basis for an amount of property damage not less than (monetary amount; than expanded in words) and to name Lessor as loss payee on said policy and to deliver said policy or certificate thereof to Lessor not less than two (2) days prior to Lessee's acceptance of the Equipment. Said coverage shall include misuse by Lessee as a covered risk, Lessee shall further provide public liability insurance for any damage, foss, injury, or death arising from Lessee's possession and use of the Equipment, which said insurance shall name Lessor as additional insured in an amount of not less than Two Million Dollars ($2,000,000.00). Lessee shall provide said policy prior to Lessee's acceptance of the Equipment. Lessee shall not assign, mortgage, or hypothecate this Lease, or sub- lease the Equipment to any part thereof. 10. This Lease shall be subject to and interpreted under the laws of the State of Pennsylvania, and Lessor and Lessee expressly agree that courts of the State of Pennsylvania shall have exclusive jurisdiction over any dispute arising hereunder. 11. This Lease is specifically subject to the terms and conditions set forth on the Rider attached hereto and made part hereof, which terms and conditions consist of ten (10) items on three (3) pages and which Lessee acknowledges having read and approved_ QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING recision Titration Droducts P.O. Box 218 Pennsburg, PA 18073 -0218 Phone: 215 -679 -6645 Fax. 215 -679 -6648 www.i)rocisionfiItration.com THE UNDERSIGNED AGREES TO ALL OF THE TERMS AND CONDITIONS ABOVE AND ON THE FOLLOWING PAGES, WHICH ARE MADE A PART OF THIS LEASE. THIS IS A NON - CANCELABLE LEASE FOR THE FULL TERM SHOWN ABOVE. Lessor: Precision Filtration Products Lessee: KBl Industries By., k N , Lcr 7141 QUALITY AIR, GAS, AND LiOU1D FILTRATION PRODUCTS CUSTW0 D _ESK3N AND MANUFACTUMNG P recision Fi Itration Droducts P,O, Box 218 Pennsblurt , PA 18073 -4218 Phone: 2.15 -679 -6645 Fax: 215-679-6648 www.preci8ionfiltration.com RIDER - TERMS AND CONDITIONS 1. Lessee shall use Equipment, lawfully and solely in the conduct of its business, and in a careful and proper manner, and in compliance with the requirements of all written warranties or guarantees relating to the Equipment so as to make same enforceable according to their or its terms, and shall not part possession of or enter into any sub -lease with respect to Equipment or any part thereof or assign this lease or its interest hereunder without the prior written consent of Lessor. Lessee at its own cost and expense shall keep Equipment in good repair, condition, and working order and shall furnish any and all parts and labor required for that purpose. Lessee shall not make any material alternations or attach accessories to Equipment without the prior written consent of Lessor. All Equipment, accessories, and parts, and replacements therefore, which are added to or become attached to Equipment shall immediately become the property of Lessor and shall be deemed incorporated in Equipment and subject to the terms of this lease as if originally leased hereunder. The Equipment shall be deemed personal property and shall not be affixed to realty. 2. Time is of the essence of this agreement and in the event that any payment required to be made hereunder is not received by Lessor within 5 days from its due date, Lessee agrees to pay, immediately, in addition to and with said payment, to the extent allowed by law, a delinquency charge equal to 5% of the amount of said payment in arrears and 1% per month from date due, or such lessor amount as is the maximum permitted by law, such delinquency charge to be in addition to attorney's tees and other fees incurred in connection with the collection of said payment and such delinquency charge. 3. Lessee hereby assumes and shall bear the entire risk of loss of any damage from every cause whatsoever, except any loss or damage resulting from an act or omission by Lessor. No loss of or damage to Equipment or any part thereof shall impair any obligation of Lessee under this lease. In the event of damage of any kind whatever to any item of Equipment (unless the same is damaged beyond repair), Lessee, at the option of Lessor, shall at Lessee's expense place the same in good repair, condition and working order, or replace the same with like Equipment of the same make and of the same or a later model, and in good repair, condition and working order. 4, Lessee, at its expense, shall keep Equipment insured against all risks of loss or damage from every cause whatsoever, and shall carry public liability insurance, both personal injury and property damage, covering Equipment in amounts heretofore set forth in the Lease Agreement. All said insurance shall be in form and amount and with companies satisfactory to Lessor. In case of the failure of Lessee to procure or maintain said insurance or to comply with any other provision of this Lease, Lessor shall have the right, but shall not be obligated, to affect such insurance or compliance on behalf of Lessee, at Lessee's expense. Lessee shall comply with all laws and regulations relating to, and shall promptly pay when due, all license fees, registration fees, assessments, charges and taxes, municipal, state and federal, which may now, or hereafter be imposed upon the ownership, possession, leasing, renting, operation, control, use, maintenance delivery and/or return of Equipment, excluding, however, any taxes payable in respect to Lessor's income, and shall save Lessor harmless against actual or asserted violations, and pay all costs and expenses of every character in connection therewith or arising there from. Lessee appoints Lessor, Lessee's attorney in fact to endorse any loss payment or returned premium check and to make any claim under such insurance. Said policies shall be endorsed with loss payable to Lessor, and shall contain provisions (a) that such insurance may not be canceled except upon ten (10) days notice thereof to Lessor and (b) that the interest of Lessor shall not be invalidated by any act of Lessee. The policies of insurance or certificates thereof shall be QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING recision Litration roduct P.O. Box 218 Pennsburg, PA 18473 -0218 Phone: 215-679-6645 Fax: 215-679-6648 www.precisionfiltration.com delivered to Lessor, In the event of loss, destruction or theft of or damage to any of the Equipment, Lessee will immediately notify Lessor in writing. The loss, destruction, theft of or damage to the Equipment shall not relieve the Lessee from its obligation to pay the full rental payable hereunder. Any sums collected from insurance for the total loss of any of the Equipment shall be credited to the final installments of rent payable hereunder. If any of the Equipment is partially damaged, Lessee shall repair such damage at its own cost and expense and any sums collected from insurance on account of such damage shall be applied to the cost thereof, but on default of the Lessee in repairing such damage within thirty (30) days of the occurrence thereof the sums collected therefore shall be applied to the last maturing installments of rent payable hereunder or to the repair of the Equipment at Lessor's option. If Lessee shall default in obtaining any insurance so to be provided, Lessor may place such insurance. Any premiums paid therefore by Lessor shall be additional rent payable on demand with interest at the highest legal rate from the date of payment. Notwithstanding the provisions of this paragraph, Lessee Will save Lessor harmless against any such claim or liability (including attorney's fees and costs and expenses for the defense thereof) arising out of the ownership, use or operation of the Equipment during the period of this Lease and until the Equipment is returned to and accepted by the Lessor. 5. Title to Equipment shall at all times remain with Lessor, and Lessee at its own cost and expense shall protect and defend the title of Lessor for defects in title of Lessor due to Lessee. Lessee shall at all times keep Equipment free and clear from all levies, attachments, liens, encumbrances and charges or ether judicial process of every kind whatsoever, shall give Lessor immediate written notice thereof, and shall indemnity and save Lessor harmless from any loss or damage caused thereby. Lessee will cooperate with Lessor and take whatever action may be deemed necessary by Lessor at Lessor's expense to enable Lessor to file, register, or record, and re -file, re- register or re- record, this Lease, which also constitutes a Security Agreement granting a security interest in favor of Lessor in the Equipment and a Financing Statement to perfect security interest in the Equipment and the Lessor, in such offices as Lessor may determine and whatever required or permitted by law, for the proper protection of Lessor's title to or the proper protection and perfection of Lessor's security interest in the Equipment. Lessee warrants and represents to Lessor its place of business is located at the address set forth above as part of Lessee's address and that the Equipment shall not be moved from such location without prior written consent of Lessor. Lessee shall notify Lessor promptly of any change in the location of any of Lessee's places of business and of the establishment of any new place of business. The Equipment will remain free from any other interest, lien, or encumbrance whatever expecting for the security interest created by the Lease. The Equipment will be kept separate and capable of identification to the fullest extent possible. if any of the following events occur with respect to Lessee, Death (of an individual); dissolution (of a partnership or corporation), death or suspension of the usual business activities of any number of such partnership, complete or partial liquidation or suspension of Lessee's usual business; filing of a voluntary or involuntary petition under any of the provisions of the Bankruptcy Act or amendments thereto; application for or the appointment of a receiver of the persons or property; assignment for the benefit of any creditors; entry of judgement or issuance of an order or warrant of attachment or execution; filing or issuance of a notice of lien, warrant for distraint or notice of levy for taxes; making or sending notice of an intended bulk sale or the commencement of any proceedings to enforce a judgement; then and in any such event, the entire balance of the unpaid installments of rent become immediately due and payable and Lessee's right to continue in possession of the Equipment shall thereupon cease all without notice or demand. In any of such events, in addition to any other right or remedy permitted by law, it shall be lawful for Lessor and Lessee hereby authorizes and empowers lessor with the aid or assistance of any persons QUALITY AIR, GAB, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING C) recision - i1tration Droducts P.O. Box 218 Pennsburg, PA 18073 -0218 Phone; 215- 679 -6645 Fax: 215- 679 -6648 www.precisionfiltrati6n.com to enter upon the premises or such other places as the Equipment may be found and take possession of and carry away the Equipment without process of law. Upon such repossession of the Equipment, the Lessor shall have the right to sell the Equipment at public or private sale with the right of Lessor to purchase any or all of the Equipment at such sale to pay all charges and expenses incurred by Lessor in connection with or incidental to the repossession (including a reasonable attorney's fee), storage, preparation for sale and sale, and to credit the remainder of the sale price to the unpaid balance of the rent hereunder the Lessee to remain liable for any deficiency. No remedy Is exclusive of another or waived by non -use. 6. if Lessee shall default in the payment of any rent or in the performance of any other ,covenant or obligation therein and such default shall continue for five days after written notice thereof is sent to Lessee, or if the nature of the business conducted, location, ownership or financial condition of Lessee shall change in any manner whatsoever, then to the extent permitted by applicable taw, Lessor shall have the right to declare the entire amount of unpaid total rent for the balance of the terra of this lease due and payable, whereupon the same shall become immediately due and payable. The extent permitted by applicable law, Lessor shall have the right with or without demand or legal process, to enter into premises where Equipment may be found and take possession of and remove the same, whereupon all rights of Lessee in Equipment shall terminate absolutely. 7. If any provisions of this lease are in conflict with any statute or rule of law of any state or territory wherein it may be sought to be enforced, then such provision shall be deemed null and void to the extent that they may conflict therewith, but without invalidating the remaining provisions hereof. This lease shall be binding upon the Lessor and Lessee and their respective legal representatives, successors and assigns. This lease contains the entire agreement between the parties, and may not be charged, modified, terminated or discharged except in writing. No defect or unfitness of the Equipment shall relieve Lessee of the obligation to pay rent or of any other obligation. 8. Lessee shall be required to execute such additional documents, financing statements as may reasonably be requested by the lessor to record its interest in the Equipment, to establish continued financial responsibility, or to correct a document which does not accurately set forth the agreement between the parties. 9. All notices hereunder shall be in writing and mailed by registered mail to the parties hereto at the address indicated above for each. 10. This lease constitutes the entire agreement of the parties with respect to the subject matter thereof, may not be changed or modified except in writing and shall be binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto. Lessor: precision f=iltration Products Less ©e: K8t Industries QUALITY AIR, GAS, AND LIQUID FILTRATION PRODUCTS CUSTOM DESIGN AND MANUFACTURING EXHIBIT "C" Kaplin Stewart Attorneys at Law William J. Levant Direct Dial: (610) 941 -2474 Direct Fax: (610) 684 -2020 Email: wlevant@kaplaw.com kaplaw.com www.kaplaw.com October 30, 2013 Robert E. Chernicoff, Esquire CUNNINGHAM & CHERNICOFF, P.C. 2320 North 2nd Street Post Office Box 60457 Harrisburg, PA 17106 -0457 RE: Keystone Biofuels, Inc. --Ch. 11 Bky. No. 13- -01380 KBI Industries, Inc. -- Ch. 11 Bky. No. 13 -01381 NOTICE OF DEFAULT Under Stipulations with Precision Filtration Products Dear Bob: As you know, I represent Precision Filtration Products in connection with the above. I am told that the above -named Debtors have each failed to make their August payments under the terms of the Stipulations that we signed — and that the Court approved — in May, 2013. Keystone Biofuels is past -due for the October 11, 2013 payment of $1,608.00; KBI Industries, Inc. is past -due for the October 18, 2013 payment of $3,216.00. As to each Debtor, if my client has not received the past -due payment by November 6, 2013, I will so certify to the Court, upon which an Order granting my client Relief from the Automatic Stay may be entered, without further notice or hearing. As provided by the Stipulations, I am also serving this Notice on each of the Debtors by mail. Please be guided accordingly. Very truly yours, KAPL EW T MELOFF REITER & STEIN, P.C. B i J.,Levant 'L;! l cc:-, , Keystone Biofuels, Inc. KBI Industries, Inc, Kaptin StewArt Meloff Reiter & Stein, PC Offices in Union Meeting Corporate Center Pennsylvania 910 Harvest Drive, P.O. Box 3037 New Jersey Blue Bell, PA 19422 -0765 610. 260 -6000 tel VERIFICATION Allen W. Allison . under penalty of 18 Pa. C.S. §4904 (relating to unsworn falsification to authorities) states as follows • he /she is a Controller of the Plaintiff; • he /she is authorized to make this verification on the Plaintiff's behalf; • the facts set forth in the foregoing pleading are true and correct to the best of his /her knowledge, information and belief, based in part upon a review of the regularly - maintained business records of the Plaintiff; • the exhibits hereto are true and correct copies of the originals; and • the transaction from which this matter arises is of an entirely commercial nature and the Defendant(s) is /are in default as set forth herein. PRECI ION FILTRATIPN PRODUCTS, Inc. A& Zim Name : 4I -LEA/ W • 4 6L/ o�U Title : C N TA LCCX, Date : December 19, 2013 KAPLIN STEWART MELOFF REITER & STEIN, P.C. B William J. Levant, Esquire. I.D. No. 54286 Attorney for Plaintiff 910 Harvest Drive Post Office Box 3037 - r. Blue Bell, PA 19422 (610)260 -6000 Telecopier (610)684 -2020 wlevant( kaplaw.com PRECISION FILTRATION PRODUCTS, Inc. COURT of COMMON PLEAS Plaintiff CUMBERLAND COUNTY, PA vs. KEYSTONE BIOFUELS, Inc. and KBI INDUSTRIES, Inc. and 2850 APPLETON ASSOCIATES, L.P. Defendants No. 1 C1J ENTRY of APPEARANCE TO THE PROTHONOTARY: Kindly enter my appearance for the Plaintiff in the above. PLIN TEWAR MELOFF REITER &STEIN, P.C. Y: EE J. Le uire Attoeys for ai tiff rn Date : December 23, 2013 SHERIFF'S OFFICE OF CUMBERLAND COUNTY,, Ronny R Anderson . � Sheriff ,‘„ 09 at e t , rn rr -3 - Jody S Smith ° Z7 Chief Deputy °' CP<3> Richard W Stewart Solicitor c3 " , Precision Filtration Products, Inc. Case Number vs. 2013-7678 Keystone Biofuels, Inc. (et al.) SHERIFF'S RETURN OF SERVICE 12/31/2013 Sheriff Ronny R Anderson, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: 2850 Appleton Associates, LP, but was unable to locate the Defendant in the Sheriffs bailiwick. The Sheriff therefore deputizes the Sheriff of Montgomery, Pennsylvania to serve the within Complaint& Notice according to law. 01/14/2014 09:00 AM -The requested Complaint& Notice returned by the Sheriff of Montgomery County, the within named Defendant 2850 Appleton Associates, LP, not found. Eileen W. Behr, Sheriff, Return of Service attached to and made part of the within record. SHERIFF COST: $37.00 SO ANSWERS, January 28, 2014 RONNY R ANDERSON, SHERIFF - _ ' SHERIFF'S OFFICE OF CUMBERLAND COUNTY Ronny R Anderson Sheriff Jody S Smith Richard W Stewart Chief Deputy F Solicitor Precision Filtration Products, Inc. vs. Keystone Biofuels, Inc. (et al.) \\ Case Number 2013-7678 SERVICE COVER SHEET Service Details: 7; Category: Civil Action -Complaint& Notice Zone: Manner: Deputize Expires: 01/29/2014 Warrant: w Notes: 0 2 >- gs Serve To: Final Service: - - LU Name: 2850 Appleton Associates, LP Served: Personally •Adult In Charge • Posted • Other 7) Primary 633 West Germantown Pike Adult In - Address: Suite 104 Charge: Plymouth Meeting, PA 19462 Phone: DOB: Relation: O Alternate Date: Time: z Address: 2 re Phone: Deputy: Mileage: Lu Attorney/Originator: co Name: Kaplin Stewart Meloff Reiter&Stein, PC Phone: 610-941-2519 w Service Attempts: Date: at,?. Time: 1 111111111111111 to Mileage: Deputy: Notes/Special Instructions: _ ,jet - 1121ek- A_1((PI : C01141()CLVIAMOU'ec:( fri(1-(\y-e '73LAk (clit--ic s o c(s4-etAis - 0q00 0 1— Now, December 31, 2013 I, Sheriff of Cumberland County, Pennsylvania do hereby deputize the Sheriff of3t.ilontempg, 12:11 County to execute service of the documents herewith and make return thereof according to law. o_ a. < Return To: tc(73) Cumberland County Sheriffs Office c4 One Courthouse Square Carlisle, PA 17013 Ronny R Anderson, Sheriff