Document:

AMENDED AND RESTATED PROMISSORY NOTE

$ 5,633,053.00                                                  October 28, 2005
                                                         Oklahoma City, Oklahoma

      FOR VALUE RECEIVED, the undersigned SHUMATE MACHINE WORKS, INC., a Texas
corporation ("Machine"), and SHUMATE INDUSTRIES INC. (formerly EXCALIBUR
INDUSTRIES, INC.), a Delaware corporation ("Industries") (Machine and Industries
are collectively referred to herein as the "Borrowers"), jointly and severally
promise to pay to the order of STILLWATER NATIONAL BANK AND TRUST COMPANY, and
its successors and assigns (the "Lender") at 1500 South Utica Avenue, Tulsa,
Oklahoma 74104, or at such other place as may be designated in writing by the
Lender, the principal sum of FIVE MILLION SIX HUNDRED THIRTY THREE THOUSAND
FIFTY THREE DOLLARS ($5,633,053.00), or so much thereof which is currently
outstanding together with interest hereon at the interest rates hereinafter
stated, payable as set forth below. This Note is an amendment, modification and
restatement of SNB Note Nos. 5195802, 5198301, 5423900, 550600, 5528400,
5732800, and 5831900 (the "Original Notes") which Original Notes are not being
repaid or refinanced by virtue of the issuance and acceptance of this
instrument. It is the intent of the Borrowers and Lender that the Indebtedness
of this instrument shall be a continuance of the Indebtedness of the Original
Notes.

      Unless otherwise defined herein, all terms defined or referenced in that
certain Loan Agreement of even date herewith between the Borrowers and the
Lender (the "Loan Agreement") will have the same meanings herein as therein.

      Interest on this Note will be paid at the interest rate equal to the Prime
Rate plus two percent (2%) per annum, adjusted on each day on which a change in
the Prime Rate occurs (the "Interest Rate"). "Prime Rate" means the prime rate
as published in the "Money Rates" Section of the Wall Street Journal, which rate
is not necessarily the lowest rate of interest charged by the Lender. All
interest hereon shall be calculated for the actual number of days elapsed at a
per diem charge based on a year consisting of 360 days.

      Payments on this Note will be paid monthly, commencing on November 30,
2005, with payments on the last day of each calendar month thereafter. The first
six (6) payments will be for interest only. Thereafter, principal and interest
payments will be payable for twenty-four (24) months based on a one hundred
twenty (120) month amortization. The entire unpaid principal balance of this
Note and all accrued interest hereon will be due and payable on April 19, 2008
(the "Maturity Date").

      This Note is executed and delivered in connection with, and subject to the
terms and conditions contained in, the Loan Agreement. Payments hereunder may,
at the option of the Lender, be recorded on this Note or on the books and
records of the Lender and will be prima facie evidence of said payments and the
unpaid balance of this Note. All payments will first be applied to the payment
of accrued interest and the balance will be applied in reduction of the
principal balance hereof provided that no payment will be applied to this Note
until received by the Lender in collected funds.

<PAGE>

      The Borrowers will have the right to prepay this Note in whole or in part
at any time and from time to time without premium or penalty.

      If a payment owing hereunder is more than ten (10) days late, the
Borrowers will be charged ten percent (10%) of such unpaid payment or $500.00,
whichever is less, as a late charge, or in the alternative, at the Lender's
option, while any Default exists hereunder or under the Loan Agreement or in the
performance or observance of any of the terms, covenants or conditions of this
Note or any of the documents evidencing or securing this Note or of any
instrument now or hereafter securing the payment of the indebtedness evidenced
hereby, the entire unpaid principal balance hereof shall bear interest at the
per annum rate equal to six percent (6%) in excess of the then current interest
rate payable hereunder, but not less than fifteen percent (15%). During the
existence of any such Default, the Lender may apply payments received on any
amounts due hereunder, or under the terms of any instrument now or hereafter
evidencing or securing such indebtedness, as the Lender may determine, and if
the Lender so elects, notice of election being expressly waived, the principal
hereof remaining unpaid, together with accrued interest, shall at once become
due and payable. Any and all additional interest at the rate provided in this
paragraph which has accrued shall be payable at the time of, and as a condition
precedent to, the curing of any Default.

      The Borrowers jointly and severally agree that if, and as often as, this
Note is placed in the hands of an attorney for collection or to defend or
enforce any of the Lender's rights hereunder or under any instrument securing
payment of this Note, the Borrowers will pay the Lender's reasonable attorneys'
fees and expenses, all court costs and all other reasonable expenses incurred by
the Lender in connection therewith.

      This Note is issued by the Borrowers and accepted by the Lender pursuant
to a lending transaction negotiated, consummated, and to be performed in
Oklahoma. Payment of this Note is secured by a certain Security Agreement of
even date herewith (the "Security Agreement"). This Note is to be construed
according to the internal laws of the State of Oklahoma. All actions with
respect to this Note, the Security Agreement or any other instrument securing
payment of this Note may be instituted in the state or federal courts in Tulsa
County, Oklahoma, or Oklahoma County, Oklahoma, as the Lender may elect, and by
execution and delivery of this Note, the Borrowers jointly and severally
irrevocably and unconditionally submit to the jurisdiction (both subject matter
and personal) of each such court and irrevocably and unconditionally waives: (a)
any objection the Borrowers might now or hereafter have to the venue in any such
court; and (b) any claim that any action or proceeding brought in any such court
has been brought in an inconvenient forum.

      On the failure to pay any principal or interest when due hereunder, or
under certain other promissory notes (as defined or described in the Loan
Agreement), or on the occurrence of any Default under the Loan Agreement, as
defined or described therein, at the option of the Lender, the entire
indebtedness evidenced by this Note will become immediately due, payable and
collectible then or thereafter as the Lender might elect, regardless of the date
of maturity hereof. Failure by the Lender to exercise such option will not
constitute a waiver of the right to exercise the same in the event of any
subsequent Default.

                                       2
<PAGE>

      The makers, endorsers, sureties, guarantors and all other persons who may
become liable for all or any part of this obligation severally waive presentment
for payment, protest and notice of nonpayment. Said parties consent to any
extension of time (whether one or more) of payment hereof, release of all or any
part of the security for the payment hereof or release of any party liable for
the payment of this obligation. Any such extension or release may be made
without notice to any such party and without discharging such party's liability
hereunder.

      IN WITNESS WHEREOF, the Borrowers and Lender have executed this instrument
effective the date first above written.

                                        SHUMATE MACHINE WORKS, INC., a Texas
                                        corporation

                                        By: /s/ Matthew C. Flemming
                                            ------------------------------------
                                        Name: Matthew C. Flemming
                                              ----------------------------------
                                        Title: Chief Financial Officer
                                               ---------------------------------

                                        SHUMATE INDUSTRIES, INC. (formerly
                                        EXCALIBUR INDUSTRIES, INC.), a Delaware
                                        corporation

                                        By: /s/ Matthew C. Flemming
                                            ------------------------------------
                                        Name: Matthew C. Flemming
                                              ----------------------------------
                                        Title: Chief Financial Officer
                                               ---------------------------------

                                        (the "Borrowers")

                                        STILLWATER NATIONAL BANK AND TRUST
                                        COMPANY, a national banking association

                                        By: /s/ Michael Mattson
                                            ------------------------------------
                                        Name: Michael Mattson
                                              ----------------------------------
                                        Title: Vice President
                                               ---------------------------------

                                        (the "Lender")

                                       3SECURITY AGREEMENT

      THIS SECURITY AGREEMENT is made effective the 19th day of October, 2005,
by SHUMATE INDUSTRIES INC. (formerly EXCALIBUR INDUSTRIES, INC.), a Delaware
corporation ("Excalibur") having a notice address of 12060 FM 3083, Conroe,
Texas 77301, SHUMATE MACHINE WORKS, INC., a Texas corporation ("Machine") having
a notice address of having a notice address of 12060 FM 3083, Conroe, Texas
77301, in favor of STILLWATER NATIONAL BANK AND TRUST COMPANY (the "Secured
Party"), having a notice address at 1500 S. Utica, Tulsa, Oklahoma 74104.
Excalibur and Machine are sometimes referred to herein collectively as the
"Debtor."

                                R E C I T A L S:

      WHEREAS, the Debtor and the Secured Party have entered into a certain Loan
Agreement of even date herewith (the "Loan Agreement"); and

      WHEREAS, pursuant to the Loan Agreement the Debtor has agreed to secure
payment of the indebtedness described herein by granting the Secured Party a
security interest covering the Property (as defined below);

      NOW, THEREFORE, in consideration of the premises and the agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Debtor hereby agrees with the
Secured Party as follows:

1. Definitions. Unless otherwise defined herein, all terms which are defined in
the Loan Agreement will have the same meanings herein as therein, and all terms
used herein which are defined in the Oklahoma Uniform Commercial Code ("UCC")
will have the same meanings herein.

2. Security Interest. The Debtor hereby grants to the Secured Party a security
interest in all of the Debtor's goods, chattels, accounts, accounts receivable,
contract rights, inventory, supplies, equipment, computer equipment, computer
hardware, computer software, general intangibles, and all other tangible and
intangible personal property, whether now owned or hereafter acquired, and all
proceeds, products, rents, profits and income therefrom (the "Property").

3. Secured Indebtedness. The security interest granted hereby in the Property is
given to secure the Debtor's payment of (a) a certain Amended and Restated
Promissory Note of even date herewith in the principal face amount of
$5,633,053.00 signed by the Debtor in favor of the Secured Party (the "Amended
and Restated Note"), and all extensions, renewals, amendments, modifications,
substitutions and changes in form of the Amended and Restated Note, together
with all interest thereon; (b) a certain Promissory Note (IRS Note) in a
principal face amount to be determined to be executed by the Debtor in favor of
the Secured Party (the "IRS Note"), and all extensions, renewals, amendments,
modifications, substitutions and changes in form of the IRS Note, together with
all interest thereon; (c) a certain Promissory Note (Revolving Note) of even
date herewith in the principal face amount of $1,000,000.00 signed by the Debtor

<PAGE>

in favor of the Secured Party (the "Revolving Note"), and all extensions,
renewals, amendments, modifications, substitutions and changes in form of the
Revolving Note, together with all interest thereon; (d) all advances made by the
Secured Party to protect the security hereof, including advances made for or on
account of levies, insurance, repairs, taxes and for maintenance or recovery of
the Property, together with interest thereon at the rate specified in the
Restructure Note; and (e) all costs and expenses incurred in connection with the
collection and enforcement of the foregoing items described at Sections 3(a)
through and including Section 3(d) including reasonable attorneys' fees and
expenses. (The foregoing items described at Sections 3(a) through 3(e) hereof
inclusive are collectively referred to herein as the "Secured Indebtedness.")

4. Debtor's Representations and Covenants. The Debtor hereby warrants,
represents and agrees as follows:

      4.1   Location of Debtor. The Debtors are registered corporations
            organized under the laws of Delaware and Texas. Its chief executive
            office and present principal place of business is the same as set
            forth in the introductory paragraph hereof (the "Business
            Location").

      4.2   Location of Property. The Property is now in the possession of the
            Debtor and is, or will be, located at the Debtor's business location
            and the Debtor will not move the Property or locate any of the
            Property in any other location without the prior written consent of
            the Secured Party.

      4.3   Business Purpose. The Property is to be used by the Debtor in
            connection with the operation of its business.

      4.4   Title. The Debtor has or will obtain marketable title to the
            Property free and clear of all liens, encumbrances and security
            interests.

      4.5   Transfers. Without the prior written consent of the Secured Party,
            the Debtor agrees that the Debtor will not sell, exchange, lease or
            in any manner dispose of any of the Property or any interest
            therein, without replacing same with property of comparable value in
            the ordinary course of business.

      4.6   Maintenance of Property. The Debtor will use the utmost care to
            maintain the Property in good condition and repair, ordinary wear
            and tear excepted, and without the Secured Party's prior written
            consent, will not suffer or permit any lien, charge or encumbrance
            to attach thereto, whether by reason of repairs, taxes, assessments
            or otherwise. The Debtor will not use or permit the Property to be
            used in violation of any law, statute or ordinance. The Debtor will
            not, in any event, permit anything to be done that may impair the
            value of the Property or the security intended to be afforded by
            this Agreement.

                                       2
<PAGE>

      4.7   Insurance. The Debtor will insure the Property as required under the
            Loan Agreement. If the Debtor fails to pay the premiums for any such
            insurance, the Secured Party may do so for the Debtor's account,
            adding the amount so paid by the Secured Party to the other amounts
            secured hereby; however, the Secured Party is under no obligation
            and has no duty to pay such premiums. The Secured Party is hereby
            appointed the Debtor's attorney-in-fact to endorse any draft or
            check which may be payable to the Debtor in order to collect the
            proceeds of such property damage insurance. All insurance proceeds
            will be applied either to the Secured Indebtedness, or to the
            repair, restoration or replacement of the damaged or destroyed
            property, at the election of the Lender. Any proceeds required to be
            made available to Debtor for use in restoring, repairing and/or
            replacing any such damage to Property will be made available in
            accordance with the procedures for Debtor obtaining an advance under
            the Loan Agreement.

      4.8   Inspection of Property. At any reasonable time and on reasonable
            prior notice to Debtor, the Secured Party may inspect the Property
            and all of the Debtor's records concerning the Property and the
            Borrower's business operations.

      4.9   Further Assurances. The Debtor will from time to time sign, execute,
            deliver and file, alone or with the Secured Party, any financing
            statements, security agreements or other documents; procure any
            instruments or documents; and take all further action that may be
            reasonably necessary or desirable, or that the Secured Party's
            reasonable discretion in order to confirm, perfect, preserve and
            protect the security interests intended to be granted hereby, and in
            addition, the Debtor hereby authorizes the Secured Party to file
            such financing statements in such locations covering the Property as
            may be deemed necessary by the Secured Party without the signature
            of the Debtor.

      4.10  Filing Reproductions. At the option of the Secured Party, a carbon,
            photographic or other reproduction of this Agreement or of a
            financing statement covering the Property will be sufficient as a
            financing statement and may be filed as a financing statement.

      4.11  Financing Statement Filings; Notifications. The Debtor will
            immediately notify the Secured Party of any condition or event that
            may change the proper location for the filing of any financing
            statements or other public notice or recordings for the purpose of
            perfecting a security interest in the Property. Without limiting the
            generality of the foregoing, the Debtor will: (a) immediately notify
            the Secured Party of any change to a jurisdiction other than the
            State of Texas of the State of Delaware in the Debtor's state of
            organization; (b) prior to any of the Property becoming so related
            to any particular real estate, other than the Business Location, so
            as to become a fixture on such real estate, notify the Secured Party
            of the description of such real estate and the name of the record
            owner thereof; and (c) immediately notify the Secured Party of any
            change in the Debtor's name, identity or company structure. In any
            notice furnished pursuant to this Section 4.11, the Debtor will
            expressly state that the notice is required by this Agreement and
            contains facts that will or may require additional filings of
            financing statements or other notices for the purpose of continuing
            perfection of the Secured Party's security interest in the Property.

                                       3
<PAGE>

5. Secured Party's Expenditures. If the Debtor fails to make any expenditure or
pay any sum necessary to: (1) keep and maintain the Property in good repair,
ordinary wear and tear and insured casualty excepted; (2) discharge any lien,
encumbrance, levy, security interest or other charge on the Property; or (3)
maintain insurance upon the Property as required hereby, the Secured Party may
but will not be required to make any expenditure for such purpose or purposes
and all sums so expended will be payable on demand, will bear interest at the
rate specified in the Restructure Note and all such sums and interest will
additionally be secured hereby. The Debtor will pay all costs of filing any
financing, continuation or termination statements with respect to the security
interest granted hereby in the Property.

6. Default; Remedies. On the occurrence of a Default under the Loan Agreement,
the Secured Party may, at its option and without notice to any party, declare
all or any portion of the Secured Indebtedness to be immediately due and payable
and may proceed to enforce payment of the same, to foreclose the Secured Party's
security interest in the Property pursuant to the provisions of the UCC, to
exercise any or all other rights and remedies provided herein and in the other
Loan Documents and by the UCC or otherwise available at law or in equity.
Whenever the Debtor is in Default under the Loan Agreement, the Debtor on demand
by the Secured Party, will assemble the Property and make it available to the
Secured Party at the Business Location, or if the Business Location is
unavailable, at a place designated by the Secured Party. All remedies hereunder
are cumulative, and any indulgence or waiver by the Secured Party will not be
construed as an abandonment of any other right hereunder or of the power to
enforce the same or another right at a later time. Whether the Secured Party
elects to exercise any other rights or remedies under this Agreement or
applicable law, the Secured Party, as a matter of right and without regard to
the sufficiency of the security for repayment of the Secured Indebtedness,
without notice to Debtor and without any showing of insolvency, fraud, or
mismanagement on the part of Debtor, and without the necessity of filing any
judicial or other proceeding other than the proceeding for appointment of a
receiver, shall be entitled to the appointment of a receiver or receivers of the
Property or any part thereof, including, but not limited to, all healthcare
accounts receivable, healthcare insurance receivables, and all other accounts
receivable (the "Receivables"), and Debtor hereby irrevocably consents to the
appointment of a receiver or receivers. Any receiver appointed pursuant to the
provisions of this subsection shall have the usual powers and duties of
receivers in such matters including, but not limited to, the collection of the
Receivables

7. Secured Party's Duties. The powers conferred upon the Secured Party by this
Agreement are solely to protect its interest in the Property and will not impose
any duty upon the Secured Party to exercise any such powers. Except as may
otherwise be provided in the Loan Agreement, the Secured Party will be under no
duty whatsoever to make or give any presentment, demand for performance, notice
of nonperformance, protest, notice of protest, notice of dishonor, or other
notice or demand in connection with any of the Property or the Secured
Indebtedness, or to take any steps necessary to preserve any rights against
prior parties. The Secured Party will not be liable for failure to collect or
realize upon any or all of the Secured Indebtedness or Property, or for any
delay in so doing, nor will the Secured Party be under any duty to take any
action whatsoever with regard thereto.

                                       4
<PAGE>

8. Continuing Agreement. This is a continuing agreement and the grant of a
security interest hereunder will remain in full force and effect and all the
rights, powers and remedies of the Secured Party hereunder will continue to
exist until all of the Secured Indebtedness is paid in full.

9. Preservation of Liability. Neither this Agreement nor the exercise by the
Secured Party of (or the failure to so exercise) any right, power or remedy
conferred herein or by law will be construed as relieving any person liable on
the Secured Indebtedness from liability on the Secured Indebtedness and for any
deficiency thereon.

10. Successors and Assigns. The covenants and agreements herein contained by or
on behalf of the Debtor will bind the Debtor, and the Debtor's legal
representatives, successors and assigns and will inure to the benefit of the
Secured Party and the Secured Party's successors and assigns.

11. Invalidity. If any provision hereof will for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability will not affect
any other provision hereof.

12. Construction. This Agreement will be construed and interpreted in accordance
with the laws of the State of Oklahoma.

      This Agreement is executed effective the date first above written.

                                        SHUMATE MACHINE WORKS, INC., a Texas
                                        corporation

                                        By: /s/ Matthew C. Flemming
                                            ------------------------------------
                                        Name: Matthew C. Flemming
                                              ----------------------------------
                                        Title: Chief Financial Officer
                                               ---------------------------------

                                        SHUMATE INDUSTRIES, INC., (formerly
                                        EXCALIBUR INDUSTRIES, INC.), a Delaware
                                        corporation

                                        By: /s/ Matthew C. Flemming
                                            ------------------------------------
                                        Name: Matthew C. Flemming
                                              ----------------------------------
                                        Title: Chief Financial Officer
                                               ---------------------------------

                                       5

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