AMENDED PROMISSORY NOTE

 

$16,200,000

                  October 27, 2008

 

This Amended Promissory Note amends and restates a Promissory Note originally
dated on or about September 7,2007, as follows:

 

FOR VALUE RECEIVED, NORTHCUT REFINING, LLC, a Wyoming limited liability company
("Borrower," whether one or more) hereby promises to pay to the order of PRIVATE
CAPITAL GROUP, INC., a Utah corporation, as servicing agent for loan
Participants (together with any and all of its successors and assigns and/or any
other holder of this Note, "Lender"), without offset, in immediately available
funds in lawful money of the United States of America, at 486 West 50th North,
American Fork, UT 84003 in the principal sum of SIXTEEN MILLION TWO HUNDRED
THOUSAND DOLLARS ($16,200,000) (or the unpaid balance of all principal advanced
against this Note, if that amount is less), together with interest on the unpaid
principal balance of this Note from day to day outstanding as hereinafter
provided.

1.

 Payment Schedule and Maturity Date. The entire unpaid principal balance of this
Note and all accrued but unpaid interest, costs and fees shall be due and
payable in full on August 1, 2009 (the "Maturity Date"), the final maturity of
this Note. Borrower shall again commence to pay Lender accrued but unpaid
interest of Two Hundred Fifty Thousand Dollars ($250,000) on or before December
1, 2008, and Two Hundred Fifty Thousand Dollars ($250,000) on or before January
1,2009. On or before February 1,2009, Borrower shall pay all accrued but unpaid
interest, which is estimated to be Four Million Three Hundred Nineteen Thousand
Six Hundred Five Dollars and 48/100 ($4,319,605.48). Additionally, commencing on
March 1, 2009 and on the first day of each month thereafter, Borrower shall also
pay Lender all other accrued but unpaid interest one (1) month in arrears. No
principal need be paid on this Promissory Note until the Maturity Date of August
1, 2009.

2.

 Security; Loan Documents. The security for this Note includes an existing gas
refinery and an oil refinery to be built (which, as it may have been or may be
amended, restated, modified or supplemented from time to time, is herein called
the "Deed of Trust") from Borrower to Lender, covering certain property in
Converse County, Wyoming, described therein (the "Property"). This Note, the
Deed of Trust, the Construction Loan Agreement between Borrower and Lender of
even date herewith (the "Loan Agreement") and all other documents now or
hereafter securing, guaranteeing or executed in connection with the loan
evidenced by this Note (the "Loan"), are, as the same have been or may be
amended, restated, modified or supplemented from time to time, herein sometimes
called individually a "Loan Document" and together the "Loan Documents."

3.

Interest Rate. Interest shall accrue on the principal balance at the rate of
twenty-four percent (24%) per annum. The interest shall be calculated daily on
the basis of a three hundred sixty (360) day year for all amounts outstanding
but, in any case, shall be computed on the actual number of days in the period
for which interest is charged, which period shall consist

of three hundred sixty-five (365) or three hundred sixty-six (366) days on an
annual basis. If any payment of interest under this Promissory Note would
otherwise be due on a day which is not a business day, the payment instead shall
be due on the next succeeding business day, and such extension of time shall be
included in computing the interest due in respect of said payment. After notice
has been given that a Default has occurred under this Promissory Note or the
Construction Loan Agreement, the Deed of Trust or any of the Loan Documents, and
the failure of Borrower to timely cure the Default, the interest rate payable
hereunder, both before and after judgment and in any bankruptcy proceeding,
shall be at the rate of thirty-six percent (36%) per annum until paid.

 4.

Prepayment. This Promissory Note may be prepaid at any time without penalty.

5.

Late Charges. If Borrower shall fail to make any payment under the terms of this
Note within five (5) days after the date such payment is due, Borrower shall pay
to Lender on demand a late charge equal to four percent (4%) of such payment.
Such five (5) day period shall not be construed as in any way extending the due
date of any payment. The "late charge" is imposed for the purpose of defraying
the expenses of Lender incident to handling such delinquent payment. This charge
shall be in addition to, and not in lieu of, any other remedy Lender may have
and is in addition to any fees and charges of any agents or attorneys which
Lender may employ upon the occurrence of a Default (hereinafter defined)
hereunder, whether authorized herein or by law.

6.

Certain Provisions Regarding Payments. All payments made as scheduled on this
Note shall be applied, to the extent thereof, to late charges, to accrued but
unpaid interest, unpaid principal, and any other sums due and unpaid to Lender
under the Loan Documents, in such manner and order as Lender may elect in its
sole discretion. All permitted prepayments on this Note shall be applied, to the
extent thereof, to accrued but unpaid interest on the amount prepaid, to the
remaining principal installments, and any other sums due and unpaid to Lender
under the Loan Documents, in such manner and order as Lender may elect in its
sole discretion, including but not limited to application to principal
installments in inverse order of maturity. Except to the extent that specific
provisions are set forth in this Note or another Loan Document with respect to
application of payments, all payments received by Lender shall be applied, to
the extent thereof, to the indebtedness secured by the Deed of Trust in such
manner and order as Lender may elect in its sole discretion, any instructions
from Borrower or anyone else to the contrary notwithstanding. Remittances in
payment of any part of the indebtedness other than in the required amount in
immediately available U.S. funds shall not, regardless of any receipt or credit
issued therefor, constitute payment until the required amount is actually
received by Lender in immediately available U.S. funds and shall be made without
offset, demand, counterclaim, deduction, or recoupment (each of which is hereby
waived) and' accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the collecting bank or
banks. Acceptance by the holder hereof of any payment in an amount less than the
amount then due on any indebtedness shall be deemed an acceptance on account
only, notwithstanding any notation on or accompanying such partial payment to
the contrary, and shall not in any way excuse the existence of a Default.

8.

Commercial Purpose. Borrower warrants that the Loan is being made solely to
acquire or carry on a business or commercial enterprise, and/or Borrower is a
business or commercial organization. Borrower further warrants that all of the
proceeds of this Note shall be used for commercial purposes and stipulates that
the Loan shall be construed for all purposes as a commercial loan, and is made
for other than personal, family, household or agricultural purposes.

 

9.

WAIVER OF JURY TRIAL. BORROWER WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO WHICH BORROWER AND LENDER MAY BE PARTIES, ARISING OUT OF, IN CONNECTION WITH
OR IN ANY WAY PERTAINING TO, THIS NOTE, THE LOAN AGREEMENT, THE DEED OF TRUST OR
ANY OF THE OTHER LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER
CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH
ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER,
AND BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE
BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS AND WARRANTS THAT
IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE
REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

10.

Service of Process. Borrower hereby irrevocably designates and appoints Tim
Williams, whose address is 160 West Canyon Crest, Alpine, Utah, 84004, as
Borrower's authorized agent to accept and acknowledge on Borrower's behalf
service of any and all process that may be served in any suit, action, or
proceeding instituted in connection with this Note in any state or federal court
sitting in the State of Utah or Wyoming. If such agent shall cease so to act,
Borrower shall irrevocably designate and appoint without delay another such
agent in the State of Utah satisfactory to Lender and shall promptly deliver to
Lender evidence in writing of such agent's acceptance of such appointment and
its agreement that such appointment shall be irrevocable.

 

Borrower hereby consents to process being served in any suit, action, or
proceeding instituted in connection with this Note by (a) the mailing of a copy
thereof by certified mail, postage prepaid, return receipt requested, to
Borrower and (b) serving a copy thereof upon the agent hereby designated and
appointed by Borrower as Borrower's agent for service of process. Borrower
irrevocably agrees that such service shall be deemed to be service of process
upon Borrower in any such suit, action, or proceeding. Nothing in this Note
shall affect the right of Lender to serve process in any manner otherwise
permitted by law and nothing in this Note will limit the right of Lender
otherwise to bring proceedings against Borrower in the courts of any
jurisdiction or jurisdictions.

11.

Successors and Assigns. The terms of this Note and of the other Loan Documents
shall bind and inure to the benefit of the successors and assigns of the
parties. The foregoing sentence shall not be construed to permit Borrower to
assign the Loan except as otherwise permitted under the Loan Documents. As
further provided in the Loan Agreement, Lender may, at any time, sell, transfer,
or assign this Note, the Deed of Trust and the other Loan Documents, and any or
all servicing rights with respect thereto, or grant participations therein or
issue mortgage pass-through certificates or other securities evidencing a
beneficial interest in a rated or unrated public offering or private placement.

12.

General Provisions. Time is of the essence with respect to Borrower's
obligations under this Note. If more than one person or entity executes this
Note as Borrower, all of said parties shall be jointly and severally liable for
payment of the indebtedness evidenced hereby. Borrower and all sureties,
endorsers, guarantors and any other party now or hereafter liable for the
payment of this Note in whole or in part, hereby severally (a) waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all other
notices (except any notices which are specifically required by this Note or any
other Loan Document), filing of suit and diligence in collecting this Note or
enforcing any of the security herefor; (b) agree to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; (c) agree that Lender shall not be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to perfect or enforce its rights
against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time
and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (e)
submit (and waive all rights to object) to non-exclusive personal jurisdiction
of any state or federal court sitting in the State of Utah or Wyoming, and venue
in any city or county in those states for the enforcement of any and all
obligations under this Note and the Loan Documents; (f) agree that their
liability under this Note shall not be affected or impaired by any determination
that any security interest or lien taken by Lender to secure this Note is
invalid or unperfected; and (g) hereby subordinate any and all rights against
Borrower and any of the security for the payment of this Note, whether by
subrogation, agreement or otherwise, until this Note is paid in full. A
determination that any provision of this Note is unenforceable or invalid shall
not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or circumstances.
This Note may not be amended except in a writing specifically intended for such
purpose and executed by the party against whom enforcement of the amendment is
sought. Lender is hereby authorized to disseminate any information it now has or
hereafter obtains pertaining to the Loan, including, without limitation, any
security for this Note and credit or other information on Borrower, any of its
principals and any guarantor of this Note, to any actual or prospective assignee
or participant with respect to the Loan, to any of Lender's affiliates, to any
regulatory body having jurisdiction over Lender, and to any other parties as
necessary or appropriate in Lender's reasonable judgment, as further provided in
the Loan Agreement. Captions and headings in this Note are for convenience only
and shall be disregarded in construing it. THIS NOTE, AND ITS VALIDITY,
ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY UTAH LAW (WITHOUT REGARD TO
ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

 

13.

Notices; Time. All notices, requests, consents, approvals or demands
(collectively, "Notice") required or permitted by this Note to be given by any
party to any other party hereunder shall, unless specified otherwise, be in
writing (including facsimile (fax) transmission) and shall be given to such
party at its address or fax number set forth on the signature pages hereof, or
such other address or fax number as such party may hereafter specify for the
purpose by Notice to the other party. Each such Notice shall be effective when
actually received by the addressee or when the attempted initial delivery is
refused or when it cannot be made because of a change of address of which the
sending party has not been notified; provided, that notices to Lender and
notices of changed address or fax number, shall not be effective until received.

 

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 

IN WITNESS WHEREOF, Borrower has duly executed this Note under seal as of the
date first above written.

 

Accepted:

BORROWER:

PRIVATE CAPITAL GROUP, a Utah

NORTHCUT REFINING, LLC, a Wyoming corporation             limited liability
company

By: Interline Resources Corporation, its Manager

By: /s/ Jared L. Lucero_____________

By: /s/ Michael R. Williams____________

Name: Jared L. Lucero, its President

Name: Michael R. Williams, Its President