IN THE MARION SUPERIOR COURT OF INDIANA
CIVIL DIVISION, ROOM NO.

$315gird 5 {as 

 

HOMEFEDERAL BANK, 

Plaintiff, 
..
2?



GREGORY J. FENCE,

(Z): 

Th HE
MARIUHU BRUSH COURT

Defendants.

COMPLAINT

Plaintiff, HomeFederal Bank ("I-IomeFederal") by counsel, for its complaint against
Gregory J. Pence ("Pence"), states as follows:

1. I-IomeFederal is a federally chartered savings bank with of?ces located at
501 Washington Street, Columbus, Bartholomew County, Indiana 47202.

2. Pence is a resident of Bartholomew County, Indiana.

3. On March 31, 1998, Pence executed a Note (?Note in the original principal
amount of One Million Seven Hundred Forty Thousand and 00/100 Dollars 
payable to HomeFederal. A true and accurate copy of Note 1 is attached hereto as Exhibit A.

4. Pursuant to the terms of Note 1, Pence was required to make payments of
principal and interest in the total amount of Twenty Thousand Nine Hundred Ninety Six and
24/100 Dollars on the note beginning on May 1, 1998 and ending on April 1, 2008.

5. In order to induce HomeFederal to loan money to KP Oil, Inc., Pence, on or about
January 12, 2001, executed an Unconditional Unlimited Guaranty (the "First Guaranty

Agreement"), whereby Pence guaranteed payment of the indebtedness of KP Oil to

 

HomeFederal. A true and accurate copy of the Guaranty Agreement is attached hereto as
Exhibit B.

6. Pursuant to the First Guaranty Agreement, Pence agreed as follows:

Guarantor hereby unconditionally and irrevocably guarantees to Lender the punctual
payment and performance when due, whether at stated maturity or by acceleration or otherwise,
of the indebtedness and other obligations of Borrower to Lender evidenced by the Note and any
other amounts that may become owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter referred to as "Borrower's
Obligations").

7. Pursuant to the First Guaranty Agreement, Pence also agreed as follows:

Guarantor agrees that if for any reason Borrower shall fail or be unable to pay, punctually
and fully, any of Borrower's Obligations, Guarantor shall pay such obligations to Borrower in
full immediately upon demand.

8. In reliance on the First Guaranty Agreement, on or about January 12, 2001,
HomeFederal loaned Fifteen Million and 00! 100 Dollars to KP Oil pursuant to
a Mortgage Note (?Note A true and accurate copy of Note 2 is attached hereto as Exhibit C.

9. In order to induce HomeFederal to loan money to KP Oil, Inc., Pence, on or about
September 14, 2001, executed an Unconditional Unlimited Guaranty (the ?Second Guaranty
Agreement"), whereby Pence guaranteed payment of the indebtedness of KP Oil to
HomeFederal. A true and accurate copy of the Guaranty Agreement is attached hereto as
Exhibit D.

10. The First Guaranty Agreement and the Second Guaranty Agreement shall be

referred to collectively as the "Guaranties" herein.

 

 

11. Pursuant to the Second Guaranty Agreement, Pence agreed as follows:

Guarantor hereby unconditionally and irrevocably guarantees to Lender the punctual
payment and performance when due, whether at stated maturity or by acceleration or otherwise,
of the indebtedness and other obligations of Borrower to Lender evidenced by the Note and any
other amounts that may become owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter referred to as ?Borrower's
Obligations?).

12. Pursuant to the Guaranty Agreement, Pence also agreed as follows:

Guarantor agrees that if for any reason Borrower shall fail or be unable to pay, punctually
and fully, any of Borrower?s Obligations, Guarantor shall pay such obligations to Borrower in
full immediately upon demand.

13. In reliance on the Second Guaranty Agreement, on or about September 14, 2001,
HomeFederal loaned $912,000.00 to KP Oil pursuant to a Mortgage Note ("Note A true and
accurate copy of Note 3 is attached hereto as Exhibit E.

14. Pence has failed and refused to pay the installment owing on Note 1 due July 1,
2004 and all installments due thereafter, and as a result thereof, all sums due thereunder are now
due and owing.

15. On or about June 15, 2004, KP Oil ?led for bankruptcy protection under
11U.S.C. 11.

16. After filing for bankruptcy, KP Oil informed HomeFederal that KP Oil would

suspend payments required by the terms of the Note 2 and Note 3.

17. In fact, KP Oil has failed and refused to pay the installments owing on Note 2 and
Note 3 due July 1, 2004 and all installments due thereafter, and as a result thereof, all sums due
thereunder are now due and owing.

l8. Pursuant to Note 1, Note 2 and Note 3, KP Oil's failure to make the July 1, 2004
payments is an event of default.

19. By correspondence dated June 30, 2004, HomeFederal provided notice to Pence
of KP Oil's statement that it would suspend its payments under Note 2 and Note 3 and requested
that, pursuant to the terms of the Guaranty Agreement, Pence make the payment which was due
on July 1, 2004.

20. By correspondence dated July 30, 2004, HomeFederal provided notice to Pence
that HomeFederal had accelerated Pence's obligations under Note 1 and the Guaranties, such that
the entire amount of said Note 1 and the entire amount payable under the Guaranties, plus
interest and fees, was due and owing.

21. Pence continues to refuse to make any payments required of him under Note 1
and the Guaranties.

22. Pence's refusal to make the payments required under the Note 1 and the
Guaranties constitutes a breach of these agreements.

23. All conditions precedent to the bringing of this action have been performed, have
occurred, or have been waived.

24. The total amount due under Note 1 includes the principal sum of $1,178,853.03,
together with interest as of August 1, 2004 of $14,953.06 and late fees of $504.82, for a total as

ofAugust l, 2004 

 

25. The total amount due under the First Guaranty includes the principal sum of
$13,773,186.90, together with interest as of August 1, 2004 of $168,993.87, escrow of 4,642.24
and late fees of $5,988.17, for a total as of August 1, 2004 of $13,952,811.80.

26. The total amount due under the Second Guaranty includes the principal sum of
$853,441.03, together with interest as of August 1, 2004 of $10,502.05 and late fees of $361.24,
for a total as of August 1, 2004 of $863,304.32.

WHEREFORE, HomeFederal Bank respectfully requests the Court to ?nd that
Gregory J. Pence is in breach of his obligations under Note 1, the First Guaranty Agreement and
the Second Guaranty Agreement and that as a result of said breach HomeFederal has suffered
damages and that the Court Order that Gregory J. Pence pay such damages to HomeFederal Bank
in an amount not less than Sixteen Million Ten Thousand Four Hundred Thirty Seven and
03/100 Dollars plus attorney's fees and costs, plus post judgment interest at the

statutory rate until said judgment is paid in full.

LOCKE REYNOLDS LLP

By: A i 

 

Jeffrey M. Holdt, #2270249
Attorneys for Plaintiff,
HomeFederal Bank

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244?0961

Phone: (317) 2373800

Fax: (317) 237-3900



 



 

 I MK


1

PR MISSORX NOTE

Earth 3 . 1998 3801 Tupelo Drive
Columbus. Indiana Columbus, Indiana 47201

1. PROMISE TO PAY.

In return for a loan that we have received, we, THEODORE C. KIEL end
GREGORY J. FENCE, (?Borrowers") promise to pay One Million Seven Hundred Forty
Thousand Dollars (U.S. (this amount will be called "Principal"),
plus interest, to the order of the Lender. The Lender is HOME FEDERAL SAVINGS
BANK. We understand that the Lender may assign or transfer this Note. The
Lender or anyone who takes this Note by assignment or transfer and who is
entitled to receive payments under this Note will be called the ?Note Holder?.

2. INTEREST.

Interest will be oherged'on that part of the outstanding principal which
has not been paid. Interest will be charged beginning on the date we receive
principal and continuing until the full amount of principal we receive has
been paid. Beginning on the date of this Note, we will pay interest at a
yearly rate equal to Seven and Percent 

3. PAYMENTS.
a. Time And Place Of Payments.

Beginning May 1, 1998, we will make payments of principal
and interest until we have paid all of the principal and interest
and any other charges described below that we may owe under this

Note.

WE WILL PAY ALL SUMS WE OWE UNDER THIS NOTE NO LATER THAN
APRIL 1, 2008 FINAL PAYMENT we will make 
payments at 501 Washington Street, Columbus, Indiana, #7201, or at
a different place if required by the Note Holder.

B. Amount Of Payments.
Our payments of principal and interest beginning May

1, 1998, will he the sum of Twenty Thousand Nine Hundred Ninety-
Six Dollars and Twentwaivs Cents 

777 57?: ?75
jaw??

 

MXIES. 

 

 16:37 FROM HUME FEDERRL BRNK TD 913172373989



?at/4e??



4. FAILURE TO PAY AS REQUIRED.
A. Late Charges For Overdue Payments.

If the Note Holder has not received the full amount of any
of our payments by the end of Ten (10) calendar days after
the date it is due, we will pay a late charge to the Note Holder.
The amount of the charge will be Five Percent of our overdue
payment of interest and/or principal. We will pay this late
charge only once on any late payment.

B. Notice From Note Holder.

If we do not pay the full amount of each payment on
time, the Note Holder may send us a written notice telling us that
if we do not pay the overdue amount by a certain date, we will be
in default. That date must be at least Thirty (30) days after the
date on which the notice is mailed to us.

C. Default.

If we do not pay the overdue amount by the date stated in
the notice described in (3) above, we will be in default. if we
are in default, the Note Holder may require us to pay immediately
the full amount of principal which has not been paid and all the-
interest that we owe on that amount. Even if, at a time when we
are in default, the Note Holder does not require us to pay
immediately in full as described above, the Note Holder will
still have the right default at a later

time.
D. No Waiver By Note Holder.

Even if at a time when we are in default, the Note Holder
does not require us to pay immediately in full as described 
the Note Holder will still have the right default at a later time-

E. Payment Of Note Holder?s Costs And Expenses.

If the Note Holder has required us to pay immediately in
full as described above, the Note Holder will have the right to he
paid back by us for all its reasonable costs and expenses to the
extent not prohibited by applicable law. Those expenses may
include for example, reasonable attorney?s fees.

JUL?3o~2ee4 15:3?

FROM
. HUME FEDERQL BQNK TU 913172373988 

5. GIVING OF NOTICES.

Unless applicable law requires a different method. any notice that must
be given to us under this Note will be given by mailing it by certified mail
or delivering it to us as follows: Theodore C. Kiel, 2537 Riverside Drive,
Columbus, Indiana, Indiana, 47201, Gregory J. Fence, 482 8. Nuts Drive,
Columbus, Indiana, #7201, or at a different address if we give the Note Holder

a notice of our different address.

Any notice that must be given to the Note Holder under this Note will
be given by mailing it by first class mail to the Note Holder at the address
stated in Section above or at a different address if we are given a

notice of that different address.

6. PREPAYMENT PENALTY.

Prepayment in part or in full may be made at anytime with no prepayment

penalty.
7. CALL PROVISION.

At the option of Note Holder. this Note and all other indebtedness of
the Borrowers to Note Holder shall become immediately due and payable without
notice of demand upon the occurrence of any of the following events of

default:

The failure of the Borrowers to make any payment when
due as herein provided after all applicable cure periods have

lapsed;

Any failure to cure a material default after expiration
of any applicable grace period which is a term or condition of
the Loan Documents, ?Loan Documents? shall include this
Promissory Note, First Mortgage, Collateral Assignment Of Rents,
Security Agreement, Subordination Agreement, and Commitment

Letter;
(0) The insolvency of either Borrower;

The death of either Borrower. This provision shall be
waived by Note Holder so long as Borrowers had not been or were
not in default at the time of said Borrower's death: and that the
deceased Borrower?s estate and/or personal representative and/or
heirs agree to assume and be bound by the terms and conditions
under this Note and the Loan Documents.



4" 3/31/33



tam-?2?

.

the Note Holder

In the event of the occurrence of any such events,
costs of collection.

shall be entitled to recover reasonable attorney fees an

8. WAIVERS.

We and any other person who has an obligation under this Note waive all
rights of presentment and notice of dishonor. ?Presentment" means the right
to require the Note Holder to demand payment of amounts due. ?Notice Of
Dishonor" means the right to require the Note Holder to give notice to other

persons that amounts duo have not been paid.

9. THIS NOTE 13 SECURED BY A FIRST MORTGAGE, SECURITY AGREEMENT,
COLLATERAL ASSIGNMENT 0F RENTS, SUBORDINATION AGREEMENT, AND COMMITMENT

LETTER.

In addition to the protection given to the Note Holder under this Note,
a First Mortgage, Security Agreement, Collateral Assignment Of Rents,
Subordination Agreement, and Commitment Letter, (?The Security Agreements"),
all of which are dated the same day as this Note. protects the Note Holder
from possible losses which might result if we do not keep the promises whieh
we make in this Note. The Security Agreements describe how and under what
conditions we may he required to make immediate payment in full of all amounts

that are owed under this Note.
10. FINANCIAL STATEMENTS-

The Borrowers shall provide financial statements to Note Holder on each
anniversary date of this Note.

11. SUBORDINATION OF LEASES.

Borrowers agree that any Leases entered into between Borrowers and third
parties shall be subordinated to this Note and Mortgage.

WITNESS HAND AND SEAL OF THE UNDERSIGNED, THIS 5751 DAY OF MARCH,

1998.

BORROWERS

?ea/A

isaedoar 3- Peace

bye/?15

 

-4-

P.EB

UNCONDITIONAL UNLIMITED GUARANTY

THIS UNCONDITIONAL UNLIMITED GUARANTY (this "Guaranty") is dated as
of January THEODORE C. ("Guarantor") for the bene?t of HOME
FEDERAL SAVINGS BANK 

W:

A. Lender has agreed to loan the principal amount of up to Fifteen Million and
"00/100 Dollars 615.000.000.00) (the "Loan") to KP Oil, Inc., an Indiana corporation,


B. A condition precedent to Lender?s extension of the Loan to Borrower is the
execution and delivery of this Guaranty, (ii) that certain Mongage Note of even date herewith
(the "Note?) made by Borrower payable to Lender to evidence the Loan, and the other Loan
Documents (as defined in the-Note).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which hereby are acloiowledged, Guarantor hereby agrees as follows:

1. Guaranty of Payment. Guarantor hereby unconditiOnally and irrevocably
guarantees to Louder the punctual payment and performance when due, whether at srated.
maturity?or by acceleration or otherwise, of the indebtedness and other obligations of Borrower
to Lender evidenced by the Note and any other amounts that may become owing by Borrower
under the Loan Documents (such indebtedness, obligations and other amounts are hereinafter
referred to as "Borrower's Obligations?). Guarantor agrees that this Guaranty is a present and
continuing guaranty of payment and not of collectibility, and that Lender shall nor be required to
prosecute collecrion, enforcement or Other rerriedies against Borrower or any other guarantor of
Borrower's Obligations, or to enforce or resort to any collateral for the repayment of Borrower?s
Obligations or other rights or remedies pertaining thereto, before calling on Guarantor for
payment: Guarantor agrees that if for any reason Borrower shall fail or be unable to pay,
punctually and fully, . any of Borrower's Obligations. Guarantor shall pay such obligations to
Lender in full immediately upon demand. Guarantor agrees that one or more successive actions
may be brought against Guaranwr, as often as Lender deems advisable, until all of Borrower's
Obligations are paid and performed in full.

2. Representations and Warranties. The following shall constitute representations
and warranties of Guarantor and Guarantor hereby acknowledges that Lender intends to make the
Loan in reliance thereon: 

a. Guarantor is not in default and no event has occurred that with the passage
of time anchor the giving of notice will constitute a default under any agreement to which
Guarantor is a party. the effect of which will impair performance by Guarantor of his,

her or its obligations under this Guaranty. Neither the execution and delivery of this
Guaranty nor compliance with the terms and provisions hereof will violate any applicable
law, rule, regulation, judgment, decree or order, or will confliCI with or result in any
breach of any of the terms, covenants, conditions or provisions of any indenture,
mortgage, deed of trust, instrument, document, agreement 'or contracr of any kind that
creates, represents, evidences or provides for any lien, charge or encumbrance upon any
of the property or assets of Guarantor, or any other indenture, mortgage, deed of trust,
instrument, document. agreement or contract of any kind to which Guaranwr is a party or
to which Guarantor or the property of Guarantor may be subjecr.

b. There is net any litigation, arbitration, governmental or administrative
proceedings, actions, examinations. claims or demands pending, or to Guarantor's
knowledge, threatened that could adversely affect performance by Guarantor of his, her
or its obligations under this Guaranty. -

c. Neither this Guaranty nor any statement or certification as to facts
previously furnished or required herein to be furnished to Lender by Guarantor, contains
any material inaccuracy or untruth in any representation, covenant or warranty or omits
to state a fact material to this Guaranty.

3. Continuing Guaranty. Guaranter agrees that the obligations of Guarantor
pursuant'to Section 1 above and any other provision of any of the Loan Documents shall be
primary obligations, shall notbe subject to any counterclaim, set~off. abatement, deferment or
defense based upon any claim that Guarantor may have against Lender. Borrower, any other
guarantor of Borrower's Obligations or any other person or entity, and shall remain in full force
and effect without regard to, and shall not be released, discharged or affected in any way by, any
circumstance or condition (whether or not Guarantor shall have any knowledge thereof),
- including without limitation:

a. any lack of validity or enforceability of any of the Loan Documents;

b. any termination, amendment, modi?cation or other change in any of the
Loan Documents, including, without limitation, any modi?cation of the interest rate(s)
described therein; 

c. any furnishing, exchange, substitution or release of any collateral securing
repayment of the Loan, or any failure to perfect any lien in such collateral;

d. any failure, omission or delay on the part of Borrower, Guarantor, any
other guarantor of Borrower's Obligations or Lender to cenform or comply with any
term of any of the Loan Documents or any failure of Lender to give notice of any Event
of Default (as de?ned in the Note); I

c. any waiver, compromise, release, settlement or extension of time of
payment or performance or observance of any of the obligations or agreements contained
in any of the Loan Documents; 

f. any action or inaction by Lender under or in respect of any of the Loan
Documents, any failure, lack of diligence, omission or delay on the part of Lender to
enforce, assert or exercise any right, power or remedy conferred on it in any of the Loan
Documents, or any Other acrion or inaction on the part of Lender;

g. any voluntary 0r involuntary bankruptcy, insolvency, reorganization,
arrangement, readjustment, assignment for the bene?t of creditors, composition,
receivership, liquidation, marshalling of assets and liabilities or similar events 0r
proceedings with respecr to Borrower, Guarantor or any Other guarantor of Borrower?s
Obligations, as applicable, or any of their respective property or creditors, or any action
taken by any trustee or receiver or by any court in any such proceeding;

it. any merger or consolidation of Borrower into or with any entity, or any
sale, lease or transfer of any of the assets of Borrower, Guarantor or any other guarantor
of Borrower?s Obligations to any other person or entity;

i. . any change in the ownership of Borrower or any change in the relationship
between Borrower, Guarantor or any other guarantor of Borrower's Obligations, or any
termination of any such relationship;

j. any release or discharge by operation of law of Borrower or any ether
guarantor of Borrower's Obligations from any obligation or agreement contained in any
of the Loan Documents; or

k. any other occurrence, circumstance, happening or event, whether similar
or dissimilar to the foregoing and whether foreseen or unforeseen, which Otherwise might
constitute a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which outerwise might limit recourse against Borrower or Guarantor.

4. . Waivers. Guarantor unconditionally waives notice of any of the matters
referred to in Section 3 above, (ii) all notices which may be required by Statute, rule of law or
otherwise, now or hereafter in effect, to preserve intact any rights against Guarantor, including,
without limitation, any demand, presentment and protesr, proof of notice of non-payment under
any of the Loan Documents and notice of any Event of Default or any failure on the part of
Borrower, Guarantor or any other guarantor of Borrower's Obligations to perform or comply
with any covenant, agreement, term or condition of. any of the Loan Documents, any right to
the enforcement, assertion or exercise against Borrower, Guarantor Or any ether guarantor of

 i 




Borrow 's Obli ?o of any right or remedy conferred under any of the Loan Documents, (iv)
any req irernent igence on the part of any person or entity, to the fullest extent
permi by law and except as otherwise expressly provided in this Guaranty or the other Loan
Docume ts, any ?lain'k based on allegations that Lender has failed to act in a commercially
reaSonab manner, (vi) any requirement to exhaust any remedies or to mitigate the damages
resultingl from any de?ult under any of the Loan Documents, and (vii) any notice of any sale,
transfer I other disposition of any right, title or interest of Lender tinder any of the Loan
Docurn ts. 

5l Subor?tation. Guarantor agrees that any and all present and future debts and
obligations of Be 0 to Guarantor hereby are subordinated to the clairns' of Lender and
hereby assi Guarantor to Lender. as security for Borrower's Obligations and
Guarani" ?s obli?iigtui under this Guaranty.

811 ro ?tion Waiver. Notwithstanding any payment or performance by
Guarant pursuatlt t' this Guaranty, Guarantor shall not be entitled to be subrogated to any
rights 0 Lender agaiist Borrower or any Other guarantor of Borrower?s Obligations, and
Gamma waives. releases all rights and claims to indemni?cation, reimbursement and
oontribu on Guaran now has. or at any time hereafter may have, against Borrower or
Borrow 's estate tun Borrower's obligations are paid in full and all periods under applicable
banks-up law for contest of any payment by Guarantor or Borrower as a preferential or
fraudul payment ha expired. Any claim Guarantor may otherwise have againSt Borrower or
any othet': guaranttir ?all Borrower?s Obligations arising from payments made pursuant to any of
the Load Documents it all respects shall be subordinate to the full and complete payment or
performance and discharge of Borrower's Obligations under this Guaranty and Guarantor's
obligati under ,thisE Guaranty, and no such payment shall give rise to any claim against
Lender. Unless and: until Borrower?s Obligations and Guarantor?s obligations under this
Guar have Mn?and performed in full, Guarantor will not assign or Otherwise transfer

 

any suc claim to 1: person or entity.

Reissmuement. The obligations of Guarantor pursuant to this Guaranty shall
continue be or automatically be reinstated, as the case may be, if at any time payment
of any 0 Borrower's ibligations or Guarantor's obligations under this Guaranty is rescinded or
otherwis_ must berestprod or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidati or reorganisation of Guarantor or Borrower or Otherwise, all as though such payment
had not it made. 

 

 

all 0 the ?nan?ial statements of Guarantor previously submitted to Lender are true, complete
and oorr in all mate?al respecrs, disclose all actual and contingent liabilities, and fairly present
the ?n ial condition-sot" Guarantor, and do nor contain any untrue statement of a material fact
or omit state a fact'material to the ?nancial statements submitted or this Guaranty and no .

'1

Eli: Finenttihl Statements. Guarantor hereby-represents and warrants to Lender that

-









?3
I .

i

material adverse change has occurred in the ?nancial Statements from the dates thereof until the
date hereof. Guarantor shall furnish to Lender annual ?nancial statements fer each calendar year
no later than ninety (90) days after the end of such years in a form substantially similar to the
form of ?nancial statements previously submitted by Guarantor to Lender. Within ten (10) days
of filing, Guarantor shall furnish Lender copies of federal tax returns. So long as this guaranty
remains in effect, Guarantor shall provide Lender a ?Certificate of Solvency? in the form
attached as Exhibit 

Successors and Assigns. This Guaranty shall inure to the bene?t of Lender and
its successors and assigns. This Guaranty shall be binding on Guarantor and the heirs, legatees,
successors and assigns of Guarantor.

10. No 'Waiver of Rim. No delay 0r failure on the part of Lender to exercise any
right, power (it privilege under this Guaranty or any of the other Loan Documents shall Operate
as a waiver thereof, and no single or partial exercise of any right, power or privilege shall
preclude any ether or further exercise thereof or the exercise of any other power or right, or be
deemed to establish a custom or course of dealing or performance between the parties hereto.
The rights. and remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law. No notice to, or demand on, Guarantor in any case shall entitle
Guarantor to any other or further notice or demand in the same, similar or other circumstance.

 

11. Modi?cation. The terms of this Guaranty may be waived, discharged, or
terminated only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment, modi?cation, waiver or
other change of any of the terms of ?this Guaranty shall be effective without the prior written
consent df Lender. -

12. Joinder. Guarantor agrees that any? action to enforce this Guaranty may be
brought againsr Guarantor without any reimbursement or joinder of Borrower or any other
guarantor of Borrower's Obligations. msuch action.

13. Sever-ability; In the event that any provision of this Guaranty is deemed to be
invalid by reason of the operation of law, or by reason of the interpretation placed thereon by
any administrative agency or any court, Guarantor and Lender shall negotiate an equitable
adjustment in the provisions of the same in order to af?rm, to the maximum extent permitted by
law, the purpose of this Guaranty and the validity and enforceability of the remaining provisions,
or portions or applications thereof, shall not be affected thereby and shall remain in full force
and effect.

14. Applicable Law. This Guaranty shall be governed as to validity, interpretation,
effect and in all other respects by laws and decisions of the State of Indiana.

COUNSEL KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
OF THEM .MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY OF THE
LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS 0R EITHER OF THEM.
NEITHER BORROWER NOR LENDER SHALL SEEK ACTION IN WHICH A JURY
TRIAL HAS BEEN WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER BORROWER OR LENDER EXCEPT BY A -WRITTEN
INSTRUMENT EXECUTED BY BOTH OF THEM.

10. EMSDICTION AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS 0R PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY
OR ANY OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT
0R SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA.
BORROWER AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN
ADVANCE To SUCH JURISDICTION IN ANY ACTION 0R PROCEEDING
COMMENCED BY BORROWER 0R LENDER IN ANY OF SUCH COURTS, AND
EACH OF THEM HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS
AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND
AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER
PROCESS OR PAPERS MAY BE MADE BY REGI OR CERTIFIED MAIL
ADDRESSED T0 BORROWER OR LENDER THE ADDRESS To WHICH
NOTICES ARE TO BE SENT PURSUANT TO AGREEMENT. BORROWER
AND LENDER WAT-YE ANY CLAIM THAT MARION COUNTY, INDIANA, OR THE
SOUTHERN DISTRICT OF INDIANA IS AN INCONYENIENT FORUM OR AN
IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD BORROWER AND
LENDER, AFTER BEING SO SERVED, FAIL TO APPEAR 0R ANSWER TO ANY
SUMMONS, COMPLAINT, PROCESS, OR PAPERS SO SERVED WITHIN THE
NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF,
BORROWER OR LENDER, As APPROPRIATE, SHALL BE DEEMED IN DEFAULT
AND AN ORDER ANDIOR JUDGMENT MAY BE ENTERED AGAINST BORROWER
OR LENDER, AS APPROPRIATE, AS DEMANDED, OR PRAYED FOR IN SUCH
SUMMONS, COMPLAINT, PROCESS, OR PAPERS. 

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date 
above written.

 
 

Theodore Cf]

   

4 7S 220_1

EXHIBIT 

CERTIFICATE REGARDING SOLVENCY

Theodore C. Kiel, (the ?Guarantor"), makes the following representations to Home Federal
Savings Bank (the ?Lender") and acknowledges that the Lender is entitled to rely and will rely
upon these representations, in providing certain ?nancial accommodations to KP Oil, Inc, an
Indiana corporation, pursuant to a certain Loan Agreement dated of even date herewith, (the
?Agreement"). 

it The assets of the Guarantor at a ?fair valuation? within the meaning of the United
States Bankruptcy Code of 1978, as amended (the ?Code"), exceed the liabilities of
the Guarantor, including without limitation contingent liabilities to the extent
appropriate for consideration in determining whether the Guarantor is ??nsolvent",
within the meaning of the Code, but excluding the Guarantor?s contingent liability
under the Unconditional Unlimited Guaranty (the ?Guaranty") required to be given
by the Guarantor under the terms of the Agreement. .

2. The Guarantor is not insolvent within the meaning of the Code, after taking into
account its contingent liability under the Guaranty.

3. After taking into account its contingent liability under the Guaranty, the Guarantor
hassufficient capital for the operation of its business as presently conducted and at
the level of operations contemplated for the foreseeable future.

4. The Guaranto: is currently paying its debts as they become due in the ordinary
course of its business. After taking into account its contingent liability under the
Guaranty, the Guarantor believes that it will be able to continue to pay its debts as
they become due in the ordinary course of its business.

Dated: January, 2001

  
   
 

 

Theodore C. Kiel

 



 

MORTGAGE NOTE

$15,000,000.00 January 12, 2001
Maturity Date: February 1, 2011 Indianapolis, Indiana

1. FOR VALUE RECEIVED, on or before February 1, 2011, KP OIL, INC., an
Indiana corporation, ("Maker") hereby promises to pay to the order of HOME FEDERAL
SAVINGS BANK, ("Lender"), the principal sum of Fifteen Million and 00/ 100 Dollars
or such other principal amount as shall have been disbursed hereunder -
pursuant to the terms and conditions of a certain Loan Agreement between Maker and Lender of
even date herewith (the Loan Agreement"), at the place and in the manner hereinafter provided,
together with interest thereon at the rate set forth herein.

2. . Loan Rate. Interest shall accrue on the balance; of principal remaining from time
to time unpaid under this Note during each calendar month (whether full or partial) prior to a
variable per annum rate equal to the ?Index? (as hereinafter de?ned) pl_us_ Two Hundred Eighty?
Seven and One?Half (287.5) basis points, resulting in an initial rate of Seven and Six Hundred
Seventy-Five PerCent (7.675%) (the ?Initial Rate?). The ?Index? shall be the Five
Year US. Treasury Constant Maturities Rate, as published in the weekly Federal Reserve
Statistical Release Form H.15 (519) (or if unavailable, a publication of similar purpose and
authority in the banking industry, as determined in the reasonable discretion of Lender), and shall
reset on the Reset Date. The applicable interest rate, as reset from time to time in accordance
with the Index, may be hereinafter referred to as the ?Reset Rate.? On the Reset Date, the
interest rate shall reset, and interest shall accrue on the balance of principal then remaining
outstanding under this Note during each calendar month (whether full or partial) prior to
February 1, 2011 (the ?Maturity Date?), at a variable per annum rate equal to the Index, pl_us
Two Hundred Eighty?Seven and One Half (287.5) basis points; provided, however, that the Reset
Rate shall never be less than Six and Six Hundred Seventy?Five Percent (6.675 
The Index shall be the rate of interest in effect as of ?ve (5) days prior to the date hereof and
forty??ve (45) days prior to the Reset Date. Interest shall be computed on the basis of a year
consisting of 360 days and based on the actual number of days during the period for. which
interest is being charged. Terms not otherwise de?ned herein shall have the meanings ascribed
to them in the Loan Agreement.

3. Paments. Principal and interest under this Note shall be payable as follows:

(3) Interest accruing between the date hereof and February 1, 2001 shall be
paid by Borrower on the date hereof, at Closing;

Commencing on March 1, 2001, and continuing on the first day of
each succeeding month thereafter until February 1, 2006, (the ?Reset Date?), Borrower
shall make equal installments of principal and interest in the amount required
to fully amortize the principal balance of the Note over a term of two hundred forty

(240) months at the Initial Rate;

Commencing on the Reset Date, and continuing until the Maturity Date,
Borrower shall make equal installments of principal and interest in the amount
required to fully amortize the then outstanding principal balance based 11an the then
applicable Reset Rate, and (ii) an amortization period of one hundred eighty (180)
months; and 

The entire balance of principal and any accrued and unpaid interest
thereon shall be due and payable on the Maturity Date. -

. 4. Application of Payments. All payments and prepayments (if any) on account of

the indebtedness evidenced by this Note shall be ?rst applied to fees, eXpenses, costs and other
similar amounts then due and payable?to Lender, including, without limitation any prepayment
premium or late charges due hereunder; second, to accrued and unpaid interest on the unpaid
principal balance of this Note; third, to the payment of principal, due in the month in which the
payment or prepayment is made; fourth, to any outstanding escrows; ?fth, to all other amounts
then due Lender hereunder or under any of the Loan Documents (as hereinafter de?ned); and
last, to the unpaid principal balance of this Note in the inverse order of maturity. Any
prepayment on account of the indebtedness evidenced by this Note shall not extend or postpone
the due date of any subsequent installment. . -

5. Default Rate. After maturity or the earlier acceleration of the indebtedness
evidenced by this Note, or if said indebtedness has not been accelerated, during any period in
which an Event of Default (as hereinafter de?ned) exists under this Note or any of the Loan
Documents, Maker shall pay interest on the balance of principal remaining unpaid during any
such period at an annual rate (the "Default Rate equal to three percent (3 plus the Initial Rate
or Reset Rate, as applicable, then in effect under this Note. The interest accruing under this
paragraph shall be immediately due and payable by Maker to the holder of this Note and shall be
additional indebtedness evidenced by this Note. 

6. Late Charge. In the event any payment of interest or principal due hereunder is
not made within ?ve (5) days after such payment is due in accordance with the terms hereof,
then, in addition to the payment of the amount so due, Maker shall pay to'Lender a ?late charge"
of ?ve cents for each whole dollar so overdue to defray part of the cost of collection and
handling such late payment. Maker agrees that the damages to be sustained by the holder hereof
for the detriment caused by any late payment are extremely dif?cult and impractical to ascertain,
and that the amOunt of ?ve cents for each one dollar due is a reasonable estimate of such
damages, does not constitute interest, and is not a penalty.

7. Prepayment. This Note may be prepaid, in part, in an amount not exceeding
?fteen percent of the original loan amount during any Loan Year (the ?Permitted
Prepayment?). The ?rst Loan Year shall commence on the date hereof and end on the ?rst 

anniversary date hereof. The second through fifth Loan Years shall end on the
second through the fifth (5m) anniversary dates of the date hereof. Prepayment in excess
of the Permitted Prepayment during the first three (3) Loan Years may be made subject,
however, to a prepayment fee of Three Percent (3 of the unamortized balance so prepaid.
Prepayment in excess of the Permitted Prepayment during the fourth (4m) and ?fth Loan
Years may be made subject to a prepayment fee of One Percent (1 of the unamortized
balance so prepaid. Following the ?fth (5m) anniversary date hereof, the Loan evidenced
hereby may be prepaid in whole or in part without prepayment fee.

8. Method of Pavments. All payments of principal and interest hereunder shall be
paid by check or in coin or currency which, at the time or times of payment, is the legal tender
for public and private debts in the United States of America and shall be made at such place as
Lender or the legal holder or holders of this Note may from time to time appoint, and in the
absence of such appointment, then at the offices of Lender, 501 Washington Street, PO. Box
408, Columbus, Indiana 47202?0408. Payment made by check shall be deemed paid on the date
Lender receives such check; provided, however, that if such check is subsequently returned to
Lender unpaid due to insuf?cient funds or otherwise, the payment shall not be deemed to have
been made and shall continue to bear interest until collected. If payment hereunder becomes due
and payable on a Saturday, Sunday or legal holiday under the laws of the State of Indiana, the
due date thereof shall be extended to the next succeeding Business Day (as de?ned in the Loan
Agreement), and interest shall be payable thereon at the then applicable interest rate during such
extension.

9. Security. This Note and any and all other liabilities and obligations and
indebtedness of Maker to Lender arising under the Loan, whether such liabilities, obligation or
indebtedness are now existing or hereafter created, direct or indirect, absolute or contingent, joint
or several, due or to become due, howsoever created, arising or evidenced, and howsoever
acquired by Lender, are secured by, among other things, the Mortgages (as de?ned in the Loan
Agreement) of even date herewith made by Maker to Lender creating a ?rst mortgage lien on
certain real pr0perty (the "Premises") legally described in Exhibit attached to the
Mortgages, Unconditional Unlimited Guaranty of even date herewith from each of Kiel Bros. Oil 
Co., Inc., Theodore C. Kiel and Gregory J. Pence (the "Guarantors," and each Unconditional
Unlimited Guaranty is hereafter referred to individually as a ?Guaranty? and collectively as the
"Guaranties") to Lender, and an Environmental Indemnity Agreement (the "Indemnity
Agreement") of even date herewith from Maker and Guarantors to Lender (the Mortgage, the
Guaranties, the Indemnity Agreement and any other document now or hereafter given to evidence
or secure payment of this Note, or delivered to induce Lender to disburse the proceeds of the
Loan, are hereinafter collectively referred to as the "Loan_Docurnents, as further defined in the
Loan Agreement). Reference is hereby made to the Loan Documents (which are incorporated
herein by reference as fully, and with the same effect, as if set forth herein at length) for a legal
descriptiOn of the Premises, a statement of the covenants and agreements contained therein, a
statement of the rights, remedies, and security afforded thereby, and all matters therein
contained. 

10. Events of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default" under this Note:

the failure by Maker to make payment of any installment of principal and
interest or any other amount due to Lender under this Note within ?ve (5) days of its due
date, or under any of the other Loan Documents on the date when any such payment is
due, subject to applicable grace and cure periods, in accordance with the terms hereof or
thereof; or

the occurrence of any one or more of the "Events of Default" under the
Loan Agreement, Mortgage or any of the other Loan Documents.

11. Remedies. At the election of the holder hereof, and without notice, the principal
balance remaining unpaid under this Note, and all unpaid interest accrued thereon, shall be and
become immediately due and payable in ?ll] upon the occurrence of any Event of Default.
Failure to exercise this option shall not constitute a waiver of the right to exercise same in the
event of any subsequent Event of Default. No holder hereof shall, by any act of omissionor
commission, be deemed to waive any of its rights, remedies or powers hereunder or otherwise
unless such waiver is in writing and signed by the holder hereof, and then only to the extent
specifically set forth therein. The rights, remedies and powers of the holder hereof, as provided
in this Note, the Loan Agreement, the Mortgage and in all of the other Loan Documents are
cumulative and concurrent, and may be pursued singly, successively or together against Maker,
the Guarantors, the Premises and any other security given at any time to secure the repayment
hereof, all at the sole discretion of the holder hereof. If any suit or action is instituted or
attorneys are employed to collect this Note or any part thereof, Maker promises and agrees to
pay all costs of collection, including attorneys' fees and court costs.

12. Covenants and Waivers. Maker and all others who now or may at any time
become liable for all or any part of the obligations evidenced hereby, expressly agree hereby to
be jointly and severally bound, and jointly and severally: (1) waive and renounce any and all
homestead, redemption and exemption rights and the bene?t of all valuation and appraisement
laws and privileges against the indebtedness evidenced by this Note or by any extension or
renewal hereof; (ii) Waive presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor, and notice of protest; waive any and all notices in connection
with the delivery and acceptance hereof and all other notices in connection with the performance,
default, or enforcement of the payment hereof or hereunder; (iv) waive any and all lack of
diligence and delays in the enforcement of the payment hereof; agree that the liability of each
Maker, guarantor, endorser or obligor shall be unconditional and without regard to the liability of
any other person or entity for the payment hereof, and shall not in any manner be affected by any
indulgence or forbearance granted or consented to by Lender to any of them with respect hereto;
(vi) consent to any and all extensions of time, renewals, waivers, or modi?cations that may be
granted by Lender with reSpect to the payment or other provisions hereof, and to the release of

any security at any time given for the payment hereof, or any part thereof, with or without
substitution, and to the release of any person or entity liable for the payment hereof; and (vii)
consent to the addition of any and all other makers, endorsers, guarantors, and other obligors for
the payment hereof, and to the acceptance of any and all other security for the payment hereof,
and agree that the addition of any such makers, endorsers, guarantors or other obligors, or
security shall not affect the liability of Maker, any guarantor and all others now liable for all or
any part of the obligations evidenced hereby.

13. Other General Agreements.

Maker'agrees that the obligation evidenced by this Note is an exempted
transaction under the Truth In Lending Act, 15 U.S.C., Section 1601, e_t 

Time is of the essence hereof.

This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the statutes, laws and
decisions of the State of Indiana. This Note may not be changed or amended orally but
only by an instrument in writing signed by the party against whom enforcement of the
change or amendment is sought. 

Lender shall in no event be construed for any purpose to be a partner, joint
venturer, agent or associate of Maker or of any lessee, operator, concessionaire or
licensee of Maker in the conduct of its business, and by the execution of this Note, Maker
agrees to indemnify, defend, and hold Lender harmless from and against any and all
damages, costs, eXpenses and liability that may be incurred by Lender as a result of a
claim that Lender is such partner, joint venturer, agent or associate.

This Note has been delivered to Lender in Indianapolis, Indiana and all
funds disbursed to or for the bene?t of Maker will be disbursed in Indianapolis, Indiana.

In the event this Note is executed by more than one party, the obligations
and liabilities of each Maker under this Note shall be joint and several and shall be
binding upon and enforceable against each Maker and their respective successors and
assigns. This Note shall inure'to the benefit of and may be enforced by Lender and its 
successors and assigns.

In the event that any provision of this Note is deemed to be invalid by
reason of the operation of law, or by reason of the interpretation placed thereon by any
administrative agency or any court, Maker and Lender shall negotiate an equitable
adjustment in the provisions of the same in order to effect, to the maximum extent
permitted 'by law, the purpose of this Note and the validity and enforceability of the

 

remaining provisions, or portions or applications thereof, shall not be affected thereby
and Shall remain in full force and effect.

The amount Of principal outstanding under the terms of this Note shall be
determined by reference to the books and records of Lender, which shall be deemed
prima facie to be correct with respect thereto absent manifest error.

14. WAIVER OF. JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS NOTE OR ANY OF THE LOAN
DOCUMENTS, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS 0F EITHER OF THEM. NEITHER
BORROWER NOR LENDER SHALL SEEK TO BY
COUNTERCLAIM 0R OTHERWISE, ANY SUCH ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER BORROWER OR LENDER EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY BOTH OF THEM.

15. JURISDICTION AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS NOTE OR ANY
OF THE LOAN DOCUNIENTS SHALL BE LITIGATED IN THE CIRCUIT OR
SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA. BORROWER
AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY
OR LENDER IN ANY OF SUCH COURTS, AND EACH OF THEM
HEREBY WAIVES PERSONAL SERVICE OF THE-SUMMONS AND COMPLAINT,
OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT
SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR
PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
BORROWER OR LENDER AT THE ADDRESS-TO WHICH NOTICES ARE TO BE
SENT PURSUANT TO THIS AGREEMENT. BORROWER AND LENDER WAIVE
ANY CLAIM THAT MARION COUNTY, INDIANA OR THE SOUTHERN DISTRICT
OF INDIANA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED
ON LACK OF VENUE. SHOULD BORROWER OR LENDER, AFTER BEING SO
SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUIVIIVIONS, COMPLAINT,
PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED
BY LAW AFTER THE MAILING THEREOF, BORROWER OR LENDER, AS

 

 

APPROPRIATE, SHALL BE DEEMED IN DEFAULT AND AN ORDER 
JUDGMENT MAY BE ENTERED AGAINST BORROWER OR LENDER, AS
APPROPRIATE, AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS,
COMPLAINT, PROCESS OR PAPERS.

IN WITNESS WHEREOF, Maker has executed this Note as of the day and year ?rst
written above,



KP OIL, Inc, an Indiana Corporation

By: ,7 Q?m

- .
Gregorydf Pence, Pres1dent

475577_1

 



 

UNCONDITIONAL UNLINIITED GUARANTY

THIS UNCONDITIONAL UNLIMITED GUARANTY (this "Guaranty") is dated as
of September 14, 2001, by GREGORY J. PENCE ("Guarantor") for the bene?t of HOME

FEDERAL SAVINGS BANK Lender 
I A 

A. Lender has agreed to loan the principal amount of up to Nine Hundred Twelve
Thousand and 00/100 Dollars (the "Loan") to KP Oil, Inc., an Indiana
corporation, ("Borrower").

B. A condition precedent to Lender's extension of the Loan to Borrower is the
execution and delivery of this Guaranty, (ii) that certain Mortgage Note of even date herewith
(the Note made by Borrower payable to Lender to evidence the Loan, and the other Loan
Documents (as defined in the Note).

NOW, THEREFORE, for good and valuable consideration, the receipt and suf?ciency
of which hereby are acknowledged, Guarantor hereby agrees as follows:

1. Guaranty of Payment. Guarantor hereby unconditionally and irrevocably
guarantees to Lender the punctual payment and performance when due, whether at stated
maturity or by acceleration or otherwise, of the indebtedness and other obligations of Borrower
to Lender evidenced by the Note and any other amounts that may become owing by Borrower
under the Loan Documents (such indebtedness, obligations and other amounts are hereinafter
referred'to as "Borrower's Obligations"). Guarantor agrees that this Guaranty is a present and
continuing guaranty of payment and not of collectibility, and that Lender shall not be required to
prosecute collection, enforcement or other remedies against Borrower or any other guarantor of
Borrower?s Obligations, or to enforce or resort to any collateral for the repayment of Borrower's
Obligations or other rights or remedies pertaining thereto, before calling on Guarantor for
payment. Guarantor agrees that if for any reason Borrower shall fail or be unable to pay,
punctually and fully, any of Borrower's Obligations, Guarantor shall pay such obligations to
Lender in full immediately upon demand. Guarantor agrees that one or more successive actions
may be brought against Guarantor, as often as Lender deems advisable, until all of Borrower's

Obligations are paid and performed in full.

2. Representations and Warranties. The following shall constitute representations
and warranties of Guarantor and Guarantor hereby acknowledges that Lender intends to make the

Loan in reliance thereon:

a. Guarantor is not in default and no event has occurred that with the passage
of time and/or the giving of notice or both will constitute a default under any agreement
to which Guarantor is a party, the effect of which will impair performance by Guarantor

 

 

of his, her or its obligations under this Guaranty. Neither the execution and delivery of
this Guaranty nor compliance with the terms and provisions hereof will violate any
applicable law, rule, regulation, judgment, decree or order, or will con?ict with or result
in any breach of any of the terms, covenants, conditions or provisions of any indenture,
mortgage, deed of trust, instrument, document, agreement or contract of any kind that
creates, represents, evidences or provides for any lien, charge or encumbrance upon any
of the property or assets of Guarantor, or any other indenture, mortgage, deed of trust,
instrument, document, agreement or contract of any kind to which Guarantor is a party or
to which Guarantor or the property of Guarantor may be subject.

b. There is not any litigation, arbitration, governmental or administrative
proceedings, actions, examinations, claims or demands pending, or to Guarantor's
knowledge, threatened that could adversely affect performance by Guarantor of his, her
or its obligations under this Guaranty.

c. Neither this Guaranty nor any statement or certification as to facts
previously furnished or required herein to be furnished to Lender by Guarantor, contains
any material inaccuracy or untruth in any representation, covenant or warranty or omits to
state a fact material to this Guaranty.

3. Continuing Guaranty. Guarantor agrees that the obligations of Guarantor
pursuant to Section 1 above and any other provision of any of the Loan Documents shall be
primary obligations, shall not be subject to any counterclaim, set-off, abatement, deferment or
defense based upon any claim that Guarantor may have against Lender, Borrower, any other
guarantor of Borrower's Obligations or any other person or entity, and shall remain in full force
and effect without regard to, and shall not be released, discharged or affected in any way by, any
circumstance or condition (whether or not Guarantor shall have any knowledge thereof),

including without limitation:

 

a. any lack of validity or enforceability of any of the Loan Documents;

b. any termination, amendment, modification or other change in any of the
Loan Documents, including, without limitation, any modi?cation of the interest rate(s)

described therein;

0. any furnishing, exchange, substitution or release of any collateral securing
repayment of the Loan, or any failure to perfect any lien in such collateral;

d. any failure, omission or delay on the part of Borrower, Guarantor, any
other guarantor of Borrower's Obligations or Lender to conform or comply with any term
of any of the Loan Documents or any failure of Lender to give notice of any Event of
Default (as de?ned in the Note);

e. any waiver, compromise, release, settlement or extension of time of
payment or performance or observance of any of the obligations or agreements contained
in any of the Loan Documents;

f. any action or inaction by Lender under or in respect of any of the Loan
Documents, any failure, lack of diligence, omission or delay on the part of Lender to
enforce, assert or exercise any right, power or remedy conferred on it in any of the Loan
Documents, or any other action or inaction on the part of Lender;

g. any voluntary or involuntary bankruptcy, insolvency, reorganization,
arrangement, readjustment, assignment for the benefit of creditors, composition,
receivership, liquidation, marshalling of assets and liabilities or similar events or
proceedings with reSpect to Borrower, Guarantor or any other guarantor of Borrower's
Obligations, as applicable, or any of their respective property or creditors, or any action
taken by any trustee or receiver or by any court in any such proceeding;

h. any merger or consolidation of Borrower into or with any entity, or any
sale, lease or transfer of any of the assets of Borrower, Guarantor or any other guarantor
of Borrower?s Obligations to any other person or entity;

i. any change in the ownership of Borrower or any change in the relationship
between Borrower, Guarantor or any other guarantor of Borrower's Obligations, or any
termination of any such relationship;

j. any release or discharge by Operation of law of Borrower or any other
guarantor of Borrower?s Obligations from any obligation or agreement contained in any
of the Loan Documents; or

k. any other occurrence, circumstance, happening or event, whether similar
or dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might
constitute a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which otherwise might limit recourse against Borrower or Guarantor.

4. Waivers. Guarantor unconditionally waives notice of any of the matters
referred to in Section 3 above, (ii) all notices which may be required by statute, rule of law or
otherwise, now or hereafter in effect, to preserve intact any rights against Guarantor, including,
without limitation, any demand, presentment and protest, proof of notice of nonpayment under
any of the Loan Documents and notice of any Event of Default or any failure on the part of
Borrower, Guarantor or any other guarantor of Borrower's Obligations to perform or comply
with any covenant, agreement, term or condition of any of the Loan Documents, any right to
the enforcement, assertion or exercise against Borrower, Guarantor or any other guarantor of

 

Borrower's Obligations of any right or remedy conferred under any of the Loan Documents, (iv)
any requirement of diligence on the part of any person or entity, to the fullest extent permitted
by law and except as otherwise expressly provided in this Guaranty or the other Loan
Documents, any claims based on allegations that Lender has failed to act in a commercially
reasonable manner, (vi) any requirement to exhaust any remedies or to mitigate the damages
resulting from any default under any of the Loan Documents, and (vii) any notice of any sale,
transfer or other disposition of any right, title or interest of Lender under any of the Loan

Documents .

5. Subordination. Guarantor agrees that any and all present and future debts and
obligations of Borrower to Guarantor hereby are subordinated to the claims of Lender and hereby
are assigned by Guarantor to Lender as security for Borrower's Obligations and Guarantor's

obligations under this Guaranty.

6. Subrogation Waiver. Notwithstanding any payment or performance by
Guarantor pursuant to this Guaranty, Guarantor shall not be entitled to be subrogated to any
rights of Lender against Borrower or any other guarantor of Borrower's Obligations, and
Guarantor waives and releases all rights and claims to indemni?cation, reimbursement and
contribution Guarantor now has, or at any time hereafter may have, against Borrower or
Borrower?s estate until Borrower's Obligations are paid in full and all periods under applicable
bankruptcy law for the contest of any payment by Guarantor or Borrower as a preferential or
fraudulent payment have expired. Any claim Guarantor may otherwise have against Borrower or
any other guarantor of Borrower?s Obligations arising from payments made pursuant to any of
.. the Loan Documents in all respects shall be subordinate to the full and complete payment or
performance and discharge of Borrower?s Obligations under this Guaranty and Guarantor's
obligations under this Guaranty, and no such payment shall give rise to any claim against Lender.
Unless and until Borrower's Obligations and Guarantor?s obligations under this Guaranty have
been paid and performed in full, Guarantor will not assign or otherwise transfer any such claim

to any other person or entity.

 

7. Reinstatement. The obligations of Guarantor pursuant to this Guaranty shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of any of Borrower's Obligations or Guarantor?s obligations under this Guaranty is rescinded or
otherwise must be restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Guarantor or Borrower or otherwise, all as though such payment

had not been made.

8. Financial Statements. Guarantor hereby represents and warrants to Lender that
all of the ?nancial statements of Guarantor previously submitted to Lender are true, complete
and correct in all material respects, disclose all actual and contingent liabilities, and fairly present
the ?nancial condition of Guarantor, and do not contain any untrue statement of a material fact or
omit to state a fact material to the ?nancial statements submitted or this Guaranty and no

 

 

 

material adverse change has occurred in the ?nancial statements from the dates thereof until the
date hereof, Guarantor shall furnish to Lender annual ?nancial statements for each calendar year
no later than ninety (90) days after the end of such years in a form substantially similar to the
form of ?nancial statements previously submitted by Guarantor to Lender. Within ten (10) days
of ?ling, Guarantor shall furnish Lender copies of federal tax returns. So long as this guaranty
remains in effect, Guarantor shall provide Lender a ?Certi?cate of Solvency? in the form

attached as Exhibit 

9. Successors and Assigns. This Guaranty shall inure to the benefit of Lender and
its successors and assigns. This Guaranty shall be binding on Guarantor and the heirs, legatees,
successors and assigns of Guarantor.

 

10. N0 Waiver of Rights. delay or failure on the part of Lender to exercise any
right, power or privilege under this Guaranty or any of the other Loan Documents shall operate
as a waiver thereof, and no single or partial exercise of any right, power or privilege shall
preclude any other or further exercise thereof or the exercise of any other power or right, or be
deemed to establish a custom or course of dealing or performance between the parties hereto.
The rights and remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law. No notice to, or demand on, Guarantor in any case shall entitle
Guarantor to any other or further notice or demand in the same, similar or other circumstance.

11. Modi?cation. The terms of this Guaranty may be waived, discharged, or
terminated only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment, modi?cation, waiver or
other change of any of the terms of this Guaranty shall be effective without the prior written

consent of Lender.

12. Joinder. Guarantor agrees that any action to enforce this Guaranty may be
brought against Guarantor without any reimbursement or joinder of Borrower or any other
guarantor of Borrower?s Obligations in such action.

13. Severability. In the event that any provision of this Guaranty is deemed to be
invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any
administrative agency or any court, Guarantor and Lender shall negotiate an equitable adjustment
in the provisions of the same in order to effect, to the maximum extent permitted by law, the
purpose of this Guaranty and the validity and enforceability of the remaining provisions, or
portions or applications thereof, shall not be affected thereby and shall remain in full force and

effect.

.14. Applicable Law. This Guaranty shall be governed as to validity, interpretation,
effect and in all other respects by laws and decisions of the State of Indiana.

 

15. Notice. All notices, communications and waivers under this Guaranty shall be in
writing and shall be delivered in person or (ii) mailed, postage prepaid, either by registered or
certi?ed mail, return receipt requested, or by overnight express carrier, addressed in each

case as follows:

To Lender:

With copy to:

To Guarantor:

With 00p)! to:

Home Federal Savings Bank
501 Washington Street

P. O. Box 408

Columbus, Indiana 47202?0408
Attn: John F. Schilling
Telephone: (812) 378-7840
Facsimile: (812) 378?4663

Locke Reynolds LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, Indiana 46244?0961
Attn: Rex E. Bennett

Telephone: (3 17) 237?3896
Facsimile: (317) 237?3900

Gregory J. Pence

3801 Tupelo Drive

PO. Box 344

Columbus, Indiana 47202-0344

Baker Daniels

300 North Meridian Street
Indianapolis Indiana 46204
Attn: Joseph M. Scimia
Telephone: (317) 569?4680
Facsimile: (317) 569?4800

or to any other address as to any of the parties hereto, as such party shall designate in a written
notice to the other party hereto. All notices sent pursuant to the terms of this Section 15 shall be
deemed received if personally delivered, or by facsimile with receipt of delivery, then on the
date of delivery, (ii) if sent by overnight, express carrier, then on the next federal banking day
immediately following the day sent, or if sent by registered or certi?ed mail, then on the
earlier of the third federal banking day following the day sent or when actually received.

10. WAIVER OF JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING OR HAVING HAD: THE OPPORTUNITY TO CONSULT WITH

 

 

COUNSEL KNOVVINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY OF THE
LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) 0R ACTIONS OR EITHER OF THEM. NEITHER
BORROWER NOR LENDER SHALL SEEK ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED
TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY EITHER
BORROWER OR LENDER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY

BOTH OF THEM.

10. JURISDICTION AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY
OR ANY OF THE LOAN DOCUNIENTS SHALL BE LITIGATED IN THE CIRCUIT
OR SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA.
BORROWER AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMNIENCED BY BORROWER OR LENDER IN ANY OF SUCH COURTS, AND
EACH OF THEM HEREBY WAIVES PERSONAL SERVICE OF THE SUWONS
AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND
AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER
PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER OR LENDER AT THE ADDRESS TO WHICH
NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT. BORROWER
AND LENDER WAIVE ANY CLAEVI THAT MARION COUNTY, INDIANA, OR THE
SOUTHERN DISTRICT OF INDIANA IS AN INCONVENIENT FORUM OR AN
IMPROPER FORUM BASED ON LACK OF VENUE. I SHOULD BORROWER AND
LENDER, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY
SUNFMONS, COMPLAINT, PROCESS, OR PAPERS SO SERVED WITHIN THE
NUIVIBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF,
BORROWER OR LENDER, AS APPROPRIATE, SHALL BE DEEIVIED IN DEFAULT
AND AN ORDER JUDGMENT MAY BE ENTERED AGAINST BORROWER
OR LENDER, AS APPROPRIATE, AS DEMANDED, OR PRAYED FOR IN SUCH
SUMMONS, COMPLAINT, PROCESS, OR PAPERS.

 

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date ?rst
above written. 

5013153

 

STATE OF INDIANA 


COUNTY OF MARION 

Before me, a Notary Public, in and for said County and State, personally appeared
Gregory J. Pence, who after having been duly sworn, acknowledged the execution of the
foregoing Unconditional Unlimited Guaranty.

WITNESS my hand and Notarial Seal this 14th er 2001.

 
  

 

REXE- BENNETT Notagy Public Signature

RESIDENT 0F JOHNSON CBUNTY
MY COMMISSION EXPIRES: JAN. 25. 2098

 

 

Notary Public Printed

My Commission Expires: My County of Residence:

 

 

 

 

EXHIBIT 

CERTIFICATE REGARDING SOLVENCY

Gregory J. Pence, (the ?Guarantor?), makes the following representations to Home Federal
Savings Bank (the ?Lender?)_ and acknowledges that the Lender is entitled to rely and will rely
upon these representations, in providing certain ?nancial accommodations to KP Oil, Inc, an
Indiana corporation, pursuant to a certain Loan Agreement dated of even date herewith, (the

?Agreement?).

1. The assets of the Guarantor at a ?fair valuation? within the meaning of the United
States Bankruptcy Code of 1978, as amended (the ?Code?), exceed the liabilities of
the Guarantor, including without limitation contingent liabilities to the extent
appropriate for consideration in determining whether the Guarantor is ?insolvent?,
within the meaning of the Code, but excluding the Guarantor?s contingent liability
under the Unconditional Unlimited Guaranty (the ??Guaranty?) required to be given

by the Guarantor under the terms of the Agreement.

2. The Guarantor is not insolvent within the meaning of the Code, after taking into
account its contingent liability under the Guaranty.

3. After taking into account its contingent liability under the Guaranty, the Guarantor
has suf?cient capital for the operation of its business as presently conducted and at
the level of Operations contemplated for the foreseeable future.

4. The Guarantor is currently paying its debts as they become due in the ordinary
course of its business. After taking into account its contingent liability under the

Guaranty, the Guarantor believes that it will be able to continue to pay its debts as
they become due in the ordinary course of its business.

Dated: September 14, 2001



G/regiory Pence

10

 

 

.m

 

 

MORTGAGE NOTE .

$912,000.00 September 14, 2001
Maturity Date: October 1, 2011 Indianapolis, Indiana

1. FOR VALUE RECEIVED, on or before October 1, 2011, KP OIL, INC., an
Indiana corporation, ("Maker") hereby promises to pay to the order of HOME FEDERAL
SAVINGS BANK, the principal sum of Nine Hundred Twelve Thousand and
00/ 100 Dollars or such other principal amount as shall have been disbursed
hereunder pursuant to the terms and conditions of a certain Loan Agreement between Maker and
Lender of even date herewith (the "Loan Agreement"), at the place and in the manner hereinafter
provided, together with interest thereon at the rate set forth herein.

2. Loan Rate. Interest shall accrue on the balance of principal remaining from time
to time unpaid under this Note during each calendar month (whether fullor partial) prior to a
variable per annum rate equal to the ?Index? (as hereinafter defined) plus Two Hundred
Seventy?Five (275) basis points, resulting in an initial rate of Seven and Twenty?Eight
Hundredths Percent (the ?Initial Rate?). The ?Index? shall be the Five Year US
Treasury Constant Maturities Rate, as published in the weekly Federal Reserve Statistical Release
Form H. 15 (519) (or if unavailable, a publication of similar standing and authority in the banking
industry, as determined in the reasonable discretion of Lender), and shall reset on the Reset Date.
The applicable interest rate, as reset from time to time in accordance with the Index, may be
hereinafter referred to as the ?Reset Rate.? On the Reset Date, the interest rate shall reset, and
interest shall accrue on the balance of principal then remaining outstanding under this Note
during each calendar month (whether full or partial) prior to October 1, 2011 (the ?Maturity
Date?), at a variable per annum rate equal to the Index, pl_us Two Hundred Seventy?Five (275)
basis points. The Index shall be the rate of interest in effect as of five (5) days prior to the date
hereof and forty-?ve (45) days prior to the Reset Date. Interest shall be computed on the basis of
a year consisting of 360 days and based on the actual number of days during the period for which
interest is being charged. Terms not otherwise defined herein shall have the meanings ascribed
to them in the Loan Agreement.

3. Paments. Principal and interest under this Note shall be payable as follows:

Interest accruing between the date hereof and October 1, 2001 shall be
paid by Borrower on the date hereof, at Closing;

Commencing on November 1, 2001, and continuing on the ?rst day
of each succeeding month thereafter until and including October 1, 2006, (the ?Reset
Date?), Borrower shall make equal installments of principal and interest of
Seven Thousand Two Hundred Twenty- -Four and 82/100 Dollars 224 82), the
amount required to fully amortize the principal balance of the Note over a term of two
hundred forty (240) months at the Initial Rate;

 

 Commencing on the Reset Date, and continuing until the Maturity Date,
Borrower shall make equal installments of principal and interest in the amount
required to fully amortize the then outstanding principal balance based upon the then
applicable Reset Rate, and (ii) an amortization period of one hundred eighty (180)
months; and

The entire balance of principal and any accrued and unpaid interest
thereon shall be due and payable on the Maturity Date.

4. Application of Payments. All payments and prepayments (if any) on account of
the indebtedness evidenced by this Note shall be ?rst applied to fees, expenses, costs and other
similar amounts then due and payable to Lender, including, without limitation, any prepayment
premium or late charges due hereunder; second, to accrued and unpaid interest on the unpaid
principal balance of this Note; third, to the payment of principal, due in the month in which the
payment or prepayment is made; fourth, to any outstanding escrows; ?fth, to all other amounts
then due Lender hereunder or under any of the Loan Documents (as hereinafter de?ned); and
last, to the unpaid principal balance of this Note in the inverse order of maturity. Any
prepayment on account of the indebtedness evidenced by this Note shall not extend or postpone
the due date of any subsequent installment.

5. Default Rate. After maturity or the earlier acceleration of the indebtedness
evidenced by this Note, or if said indebtedness has not been accelerated, during any period in
which an Event of Default (as hereinafter de?ned) exists under this Note or any of the Loan
Documents, Maker shall pay interest on the balance of principal remaining unpaid during any
such period at an annual rate (the "Default Rate") equal to three percent (3 plus the Initial Rate
or Reset Rate, as applicable, then in effect under this Note. The interest accruing under this
paragraph shall be immediately due and payable by Maker to the holder of this Note and shall be
additional indebtedness evidenced by this Note.

6. Late Charge. In the event any payment of interest or principal due hereunder is
not made within ten (10) days after such payment is due in accordance with the terms hereof,
then, in addition to the payment of the amount so due, Maker shall pay to lender a "late charge"
of ?ve cents for each whole dollar so overdue to defray part of the cost of collection and
handling such late payment. Maker agrees that the damages to be sustained by the holder hereof
for the detriment caused by any late payment are extremely dif?cult and impractical to ascertain,
and that the amount of ?ve cents for each one dollar due is a reasonable estimate of such
damages, does not constitute interest, and is not a penalty.

Prepament. This Note may be prepaid, in part, in an amount not exceeding
?fteen percent of the original loan amount during any Loan Year (the ?Permitted
Prepayment?). The ?rst Loan Year shall commence on the date hereof and end on the ?rst 
anniversary date hereof. The second through ?fth Loan Years shall end on the

 

 

second through the ?fth (5m) anniversary dates of the date hereof. Prepayment in excess
of the Permitted Prepayment during the first three (3) Loan Years may be made subject,
however, to a prepayment fee of Three Percent of the unamortized balance so prepaid.
Prepayment in excess of the Permitted Prepayment during the fourth (dim) and ?fth Loan
Years may be made subject to a prepayment fee of One Percent of the unamortized
balance so prepaid. Following the fifth (5m) anniversary date hereof, the Loan evidenced
hereby may be prepaid in whole or in part without prepayment fee.

8. Method of Payments. All payments of principal and interest hereunder shall be
paid bycheck or in coin or currency which, at the time or times of payment, is the legal tender
for public and private debts in the United States of America and shall be made at such place as
Lender or the legal holder or holders of this Note may from time to time appoint, and in the
absence of such appointment, then at the offices of Lender, 501 Washington Street, PO. Box
408, Columbus, Indiana 47202-0408. Payment made by check shall be deemed paid on the date
Lender receives such check; provided, however, that if such check is subsequently returned to
Lender unpaid due to insufficient funds or otherwise, the payment shall not be deemed to have
been made and shall continue to bear interest until collected. If payment hereunder becomes due
and payable on a Saturday, Sunday or legal holiday under the laws of the State of Indiana, the
due date thereof shall be extended to the next succeeding Business Day (as de?ned in the Loan
Agreement), and interest shall be payable thereon at the then applicable interest rate during such

extension.

9. Securi?. This Note and any and all other liabilities and obligations and
indebtedness of Maker to Lender arising under the Loan, whether such liabilities, obligation or
indebtedness are now existing or hereafter created, direct or indirect, absolute or contingent, joint
or several, due or to become due, howsoever created, arising or evidenced, and howsoever
acquired by Lender, are secured by, among other things, the Mortgage (as de?ned in the Loan
Agreement) of even date herewith made by Maker to Lender creating a ?rst mortgage lien on
certain real property (the "Premises") legally described in Exhibit attached to the Mortgage,
Unconditional Unlimited Guaranty of even date herewith from each of Kiel Bros. Oil Co., Inc.,
Theodore C. Kiel and Gregory J. Pence (the "Guarantors," and each Unconditional Unlimited
Guaranty is hereafter referred to individually as a ?Guaranty? and collectively as the
"Guaranties") to Lender, and an Environmental Indemnity Agreement (the "Indemnity
Agreement of even date herewith from Maker and Guarantors to Lender (the Loan Agreement,
the Mortgage, the Guaranties, the Indemnity Agreement and any other document now or
hereafter given to evidence or secure payment of this Note, or delivered to induce Lender to
disburse the proceeds of the Loan, are hereinafter collectively referred to as the "Loam
Documents," as further defined in the Loan Agreement). Reference is hereby made to the Loan
Documents (which are incorporated herein by reference as fully, and with the same effect, as if
set forth herein at length) for a legal description of the Premises, a statement of the covenants and
agreements contained therein, a statement of the rights, remedies, and security afforded thereby,

and all matters therein contained.

 

 

10. Events of Default. The occurrence of any one or more of the following events
shall constitute an "Event of Default" under this Note:

the failure by Maker to make payment of any installment of principal and
interest or any other amount due to Lender under this Note within five (5) days of its due
date, or under any of the other Loan Documents on the date when any such payment is
due, subject to applicable grace and cure periods, in accordance with the terms hereof or
thereof; or

the occurrence of any one or more of the "Events of Default" under the
Loan Agreement, Mortgage or any of the other Loan Documents.

11. Remedies. At the election of the holder hereof, and without notice, the principal
balance remaining unpaid under this Note, and all unpaid interest accrued thereon, shall be and
become immediately due and payable in full upon the occurrence of any Event of Default.
Failure to exercise this Option shall not constitute a waiver of the right to exercise same in the
event of any subsequent Event of Default. No holder hereof shall, by any act of omission or
commission, be deemed to waive any of its rights, remedies or powers hereunder or otherwise
unless such waiver is in writing and signed by the holder hereof, and then only to the extent
speci?cally set forth therein. The rights, remedies and powers of the holder hereof, as provided
in this Note, the Loan Agreement, the Mortgage and in all of the other Loan Documents are
cumulative and concurrent, and may be pursued singly, successively or together against Maker,
the Guarantors, the Premises and any other security given at any time to secure the repayment
hereof, all at the sole discretion of the holder hereof. If any suit or action is instituted or
attorneys are employed to collect this Note or any part thereof, Maker promises and agrees to
pay all costs of collection, including attorneys' fees and court costs.

12. Covenants and Waivers. Maker and all others who now or may at any time
become liable for all or any part of the obligations evidenced hereby, expressly agree hereby to
be jointly and severally bound, and jointly and severally: (1) waive and renounce any and all
homestead, redemption and exemption rights and the bene?t of all valuation and appraisement
laws and privileges against the indebtedness evidenced by this Note or by any extension or
renewal hereof; (ii) waive presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor, and notice of protest; waive any and all notices in connection
with the delivery and acceptance hereof and all other notices in connection with the performance,
default, or enforcement of the payment hereof or hereunder; (iv) waive any and all lack of
diligence and delays in the enforcement of the payment hereof; agree that the liability of each
Maker, guarantor, endorser or obligor shall be unconditional and without regard to the liability of
any other person or entity for the payment hereof, and shall not in any manner be affected by any
indulgence or forbearance granted or consented to by Lender to any of them with respect hereto;
(vi) consent to any and all extensions of time, renewals, waivers, or modi?cations that may be
granted by Lender with respect to the payment or other provisions hereof, and to the release of
any security at any time given for the payment hereof, or any part thereof, with or without

 

substitution, and to the release of any person or entity liable for the payment hereof; and (vii)
consent to the addition of any and all other makers, endorsers, guarantors, and other obligors for
the payment hereof, and to the acceptance of any and all other security for the payment hereof,
and agree that the addition of any such makers, endo'rsers, guarantors or other obligors, or
security shall not affect the liability of Maker, any guarantor and all others now liable for all or
any part of the obligations evidenced hereby.

13. Other General Agreements.

Maker agrees that the obligation evidenced by this Note is an exempted
transaction under the Truth In Lending Act, 15 U.S.C., Section 1601, e_t 

Time is of the essence hereof.

This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the statutes, laws and
decisions of the State of Indiana. This Note may not be changed or amended orally but
only by an instrument in writing signed by the party against whom enforcement of the
change or amendment is sought.

Lender shall in no event be construed for any purpose to be a partner, joint
venturer, agent or associate of Maker or of any lessee, operator, concessionaire or
licensee of Maker in the conduct of its business, and by the execution of this Note, Maker
agrees to indemnify, defend, and hold Lender harmless from and against any and all
damages, costs, expenses and liability that may be incurred by Lender as a result of a
claim that Lender is such partner, joint venturer, agent or associate.

This Note has been delivered to Lender in Indianapolis, Indiana and all
funds disbursed to or for the bene?t of Maker will be disbursed in Indianapolis, Indiana.

In the event this Note is executed by more than one party, the obligations
and liabilities of each Maker under this Note shall be joint and several and shall be
binding upon and enforceable against each Maker and their respective successors and
assigns. This Note shall inure to the bene?t of and may be enforced by Lender and its

successors and assigns.

In the event that any provision of this Note is deemed to be invalid by
reason of the Operation of law, or by reason of the interpretation placed thereon by any
administrative agency or any court, Maker and Lender shall negotiate an equitable
adjustment in the provisions of the same in order to effect, to the maximum extent
permitted by law, the purpose of this Note and the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected thereby
and shall remain in full force and effect. .

 The amount of principal outstanding under the terms of this Note shall be
determined by reference to the books and records of Lender, which shall be deemed
prima facie to be correct with respect thereto absent manifest error.

14. WAIVER OF JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS NOTE OR ANY OF THE LOAN
DOCUMENTS, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER
BORROWER NOR- LENDER SHALL SEEK TO CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY

TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER BORROWER OR LENDER EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY BOTH OF THEM.

15. JURISDICTION AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS NOTE OR ANY
OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT OR
SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA. BORROWER
AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING CONIMENCED BY
BORROWER OR LENDER IN ANY OF SUCH COURTS, AND EACH OF THEM
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT,
OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT
SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR
PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
BORROWER OR LENDER AT THE ADDRESS TO WHICH NOTICES ARE TO BE
SENT PURSUANT TO THIS AGREEMENT. BORROWER AND LENDER WAIVE
ANY CLAIM THAT MARION COUNTY, INDIANA OR THE SOUTHERN DISTRICT
OF INDIANA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED
ON LACK OF VENUE. SHOULD BORROWER OR LENDER, AFTER BEING SO
SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT,
PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED
BY LAW AFTER THE NIAILING THEREOF, BORROWER OR LENDER, AS
APPROPRIATE, SHALL BE DEEMED IN DEFAULT AND AN ORDER 
JUDGMENT MAY BE ENTERED AGAINST BORROWER OR LENDER, AS

 

 

APPROPRIATE, AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS,
COMPLAINT, PROCESS OR PAPERS. .

IN WITNESS WHEREOF, Maker has executed this Note as of the day and year ?rst
written above.



KP OIL, Inc., an Indiana Corporation

Mayra?

Gregory Pe?ce, President

5013593

 

 z'm 

?i 

. i gill} a R.
IN THE MARION SUPERIOR COURT OF INDIANA i 235??

CIVIL DIVISION, ROOM NO. (a 



manna 

,{at}
CU

 

HOMEFEDERAL BANK,

 

Plaintiff,
v.

GREGORY J. PENCE,



Defendants.

APPEARANCE BY ATTORNEY IN CIVIL CASE

Party Classi?cation: Initiating: Responding: Intervening: 

1. The undersigned attorney and all attorneys listed on this form now appear in this case for the following
party member(s): Plaintiff, HomeFederal Bank.

2. Applicable attorney information for service as required by Trial Rule 503) (2) and for case information
as required by Trial Rules 3.1 and 77(8) is as follows:

Name: Jeffrey M. Boldt Attorney Number: 22702?49
LOCKE REYNOLDS LLP Phone: 317-237-3874

Address: 201 North Illinois Street, Suite 1000 FAX: 3 17-23 7?3 900
RC. Box 44961 Email: jboldt@locke.com

Indianapolis, IN 46244-0961

3. There are other party members: Yes No El (Ifyes, list on continuation page.)

4. iffirsr initiating party ?ling this case, the clerk is requested to assign this case the following Case Type
under Administrative Rule Not Applicable

5. I will accept service by FAX at the above noted number: Yes No

6. This case involves support issues: Yes NO IE (If yes, supply social security numbers all
?muly members on continuation page.)

7. There are related cases: Yes No 
8. This form has been served on all other parties. Certi?cate of Service is attached: Yes No 

9. Additional information required by local rule: None.

   

   

A it. 

Jeffrey M. #22702-49

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961

Phone: (317) 237-3800

Fax: (317) 237-3900

672129_l

 

IN THE MARION SUPERIOR COURT OF INDIANA

 

HOMEFEDERAL BANK, CAUSE NO. 

Plaintiff, 
v. g; 
. am,-
GREGORY J. FENCE, 1 
(?3471
Defendant. {144% g; 0F I 
CUP 4" 

ORDER ALLOWING SUBSTITUTION OF EXHIBITS

This matter is before the Court on the Motion to Substitute Exhibits ("Motion") ?led by
HomeFederal Bank ("HomeFederal"). The Court, having reviewed the Motion and being duly
advised in the premises now GRANTS the Motion.

IT IS THEREFORE ORDERED that Exhibit to HomeFederal's Motion is hereby
deemed substituted for Exhibit of the Complaint and Exhibit to HomeFederal's Motion is

hereby deemed substituted for Exhibit of the Complaint.

Date: I 

Judge, Marion Superior Couri

?Wm-4'

Copies to:

R. C. Richmond, Jeffrey M. Boldt

SOMMER BARNARD ATTORNEYS PC LOCKE REYNOLDS LLP

3500 One Indiana Square 201 North Illinois Street, Suite 1000
Indianapolis, IN 46204 PO. Box 44961

Indianapolis, IN 46244-0961

680371}

 

 

 

IN THE MARION SUPERIOR COURT OF INDIANA
CAUSE NO. 




HOMEFEDERAL BANK, 


in} a raw 1555?




Plaintiff,

    

GREGORY J. FENCE, $.52 14%:
tit-ax or tag 
Defendant. MERIUN LJUURI

MOTION TO SUBSTITUTE EXHIBITS

Plaintiff, HomeFederal Bank ("HomeFederal"), by counsel, hereby moves the Court to
permit HomeFederal to substitute the exhibits attached to this Motion for the exhibits attached to
HomeFederal's Complaint. In support of this Motion, HomeFederal states as follows:

1. HomeFederal ?led its Complaint on August 4, 2004.

2. As of the date of this Motion, the Defendant had not ?led a responsive pleading.

3. Counsel for HomeFederal has recently realized that through inadvertence, some
of the exhibits attached to the Complaint are not the documents to which the allegations
contained in the Complaint refer and are in fact documents executed by another guarantor of the
KP Oil, Inc. indebtedness.

4. The exhibits in questions are marked as Exhibit and Exhibit in the

 

Complaint.

5. The correct exhibits are attached to this Motion and are likewise marked as
Exhibit and Exhibit D.

6. This substitution will not prejudice the Defendant and is not indented to hinder or

delay the prosecution of this action.

 

WHEREFORE, HomeFederal Bank respectfully requests the Court permit it to substitute
Exhibit attached hereto for Exhibit attached to the Complaint and that the Court further
allow HomeFederal Bank to substitute Exhibit attached hereto for Exhibit attached to the

Complaint.

LOCKE REYNOLDS LLP

1 
I 
i 



Jeffrey Boldt #22702-49
Attorneys for Plaintiff HomeFederal Bank

By:

CERTIFICATE OF SERVICE

Service of the foregoing was made by placing a copy of the same into the United States
Mail, ?rst class postage prepaid, this 30th day of September, 2004, addressed to:

R. C. Richmond, 

SOMMER BARNARD ATTORNEYS PC
3500 One Indiana Square

Indianapolis, IN 46204



1 1 

 

Jeffrey Ml B'oldt

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961

3 1 7-237-3 800

Fax: 317-237-3900
jboldt@locke.com

630368_l

UNCONDITIONAL UNLIMITED GUARANTY

THIS UNCONDITIONAL UNLIMITED GUARANTY (this "Guaranty") is dated as
of January 12, 2001, by GREGORY J. PENCE (?Guarantor") for the bene?t of HOME
FEDERAL SAVINGS BANK ("Lender").

RECITALS:

A. Lender has agreed to loan the principal amount of up to Fifteen Million and
00/100 Dollars (the "Loan") to KP Oil, Inc., an Indiana corporation,


B. A condition precedent to Lender?s extension of the Loan to Borrower is the
execution and delivery of this Guaranty, (ii) that certain Mortgage Note of even date herewith 
(the "Note") made by Borrower payable to Lender to evidence the Loan, and the other Loan
Documents (as de?ned in the Note).

NOW, THEREFORE, for good and valuable consideration, the receipt and suf?ciency
of which hereby are acknowledged Guarantor hereby agrees as follows:

1. Guaranty of Payment. Guarantor hereby unconditionally and irrevocably
guarantees to Lender the punctual payment and performance when due, whether at stated
maturity or by acceleration or otherwise, of the indebtedness and other obligations of Borrower
to Lender evidenced by the lote and any other amounts that may become owing by Borrower
under the Loan Documents (such indebtedness, obligations and other amounts are hereinafter
referred to as "Borrower's Obligations Guarantor agrees that this Guaranty is a present and
continuing guaranty of payment and not of collectibility, and that Lender shall not be required to
prosecute collection, enforcement or other remedies against Borrower or any other guarantor of
Borrower?s Obligations, or to enforce or resort to any collateral for the repayment of Borrower?s
Obligations or other rights or remedies pertaining thereto, before calling on Guarantor for
payment. Guarantor agrees that if for any reason Borrower shall fail or be unable to pay,
punctually and fully, any of Borrower's Obligations, Guarantor shall pay such obligations to
Lender in full immediately upon demand. Guarantor agrees that one or more successive actions
may be brought against Guarantor, as often as Lender deems advisable, until all of Borrower's
Obligations are paid and performed in full.

 

2. Representations and Warranties. The following shall constitute representations
and warranties of Guarantor and Guarantor hereby acknowledges that Lender intends to make the
Loan in reliance thereon: 

a. Guarantor is not in default and no event has occurred that with the passage
of time and! or the giving of notice will constitute a default under any agreement to which
Guarantor is a party, the effect of which will impair performance by Guarantor of his, 'her

    

EXHIBIT

or its obligations under this Guaranty. Neither the execution and delivery of this
Guaranty nor compliance with'the terms and provisions hereof will violate any applicable
law, rule, regulation, judgment, decree or order, or will conflictwith or result in any
breach of any of the terms, covenants, conditions or provisions of any .indenture,
mortgage, deed of trust, instrument, document, agreement or contract of any kind that
creates, represents, evidences or provides for any lien, charge or encumbrance upon any
of the property or assets of Guarantor, or any other indenture, mortgage, deed of trust,
instrument, document, agreement or contract of any kind to which Guarantor is a party or
to which Guarantor or the property of Guarantor may be subject.

b. There is not any litigation, arbitration, governmental or administrative
proceedings, actions, examinations, claims or demands pending, or to Guarantor?s
knowledge, threatened that could adversely affect performance by Guarantor of his, her
or its obligations under this Guaranty. 

c. Neither this Guaranty nor any statement or certification as to facts -

previously furnished or required herein to be furnished to Lender by Guarantor, contains

any material inaccuracy or untruth in any representation, covenant or warranty or omits to
state a fact material to this Guaranty. - 

3. Continuing Guaranm Guarantor agrees that the obligations of Guarantor
pursuant to Section 1 above and any other provision of any of the Loan Documents shall be
primary obligations, shall not be subject to any counterclaim, set-off, abatement, deferment or
defense based'upon any claim that Guarantor may have against Lender, Borrower, any other
- guarantor'of Borrower?s Obligatiom or any other person or entity, and shall remain in full force
and effect without regard to, and shall not be released, discharged or affected in any way" by, any
circumstance or condition (whether or not Guarantor shall have any knowledge thereof),
including without limitation:

 

a; any lack of validity 0r enforceability of any of the Loan Documents;

b. any termination, amendment, modi?cation. or other change in any of the
Loan Documents, including, without limitation, any modi?cation of the interest rate(s)
described therein; 

c. any furnishing, exchange, substitution or release of any collateral securing
repayment of the Loan, or any failure to perfect any lien in such collateral;

d. any failure, omission or delay on the part of Borrower, Guarantor, any
other guarantor of Borrower?s Obligations or Lender to conform or comply with any term 
of any of the Loan Documents or any failure of Lender to give notice of any Event of
Default (as de?ned in the Note); 

e. any waiver, compromise, release, settlement or extension of time of
payment or performance or observance of any of the obligations or agreements contained
in any of the Loan Documents;

f. any action or inaction by Lender under or in respect of any of the Loan
Documents, any failure, lack of diligence, omission or delay on the part of Lender to
enforce, assert or exercise any right, power or remedy conferred on it in any of the Loan
Documents, or any other action or inaction on the part of Lender;

g. - any voluntary or involuntary bankruptcy, insolvency, reorganization,
arrangement, readjustment, assignment for the bene?t of creditors, composition,
receivership, liquidation, marshalling of assets and liabilities or similar events or 
proceedings with respect to Borrower, Guarantor or any other guarantor of Borrower?s
Obligations, as applicable, or any of their respective property or creditors, or any action
taken by any trustee or receiver or by any court in any?such proceeding;

h. any merger or consolidation of Borrower into or with any entity, or any
sale, lease or transfer of - any of the assets of Borrower, Guarantor or any other guarantor
of Borrower's Obligations to any other person or entity; 

i. any change in the ownership of Borrower or any change in the relationship
between Borrower, Guarantor or any other guarantor of Borrower?s Obligations, or any
termination-of any such relationship; - 

j. any release or discharge by operation of law of Borrower or any other
guarantor of Borrower's Obligations from any obligation or agreement contained in any
of the Loan Documents; or

k. any other occurrence, circumstance, happening or event, whether similar
or dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might
constitute a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which otherwise might limit recourse against Borrower or Guarantor.

4. Waivers. Guarantor unconditionally waives notice of any or the matters
referred to in Section 3 above, (ii) all notices which may be required by statute, rule of law or
otherwise, now or hereafter in effect, to preserve intact any rights against Guarantor, including,
without limitation, any demand, presentment and protest, proof of notice of nonpayment under
any of the Loan Documents and notice of any Event of Default or any failure on the part of
Borrower, Guarantor or any other guarantor of Borrower's Obligations to perform or comply
with any covenant, agreement, term or condition of any of the Loan Doonments, any right to
the enforcement, assertion or exercise against Borrower, Guarantor or any other guarantor of

Borrower?s Obligations of any right or remedy conferred under any of the Loan Documents, (iv)
any requirement of diligence on the part of any person or entity, (V) to the fullest extent permitted
by law and except as otherwise expressly provided in this Guaranty or the other Loan
Documents, any claims based on allegations that Lender has failed to act in a commercially
reasonable manner, (Vi) any requirement to exhaust any remedies or to mitigate the damages
resulting from any default under any of the Loan Documents, and (Vii) any notice of any sale,
transfer or other disposition of any right, title or interest of Lender under any of the Loan

Documents .

5. Subordination. Guarantor agrees that any and allpresent and future debts and
obligations of Borrower to Guarantor hereby are subordinated to the claims of Lender and hereby
are assigned by Guarantor to Lender as security for'Bo'rrowefs Obligations and Guarantor?s
obligations under this Guaranty.

6. Subrogation Waiver. Notwithstanding any payment or performance by
Guarantor pursuant to this Guaranty, Guarantor shall not be entitled to be' subrogated to any
rights of Lender against Borrower or any other guarantor of Borrower?s Obligations, and
Guarantor waives and? releases all rights and claims to indemni?cation, reimbursement and
contribution Guarantor now has, or at any time hereafter may have, against Burrower or
Borrower?s estate until Borrower?s obligations are paid in full and all periods under applicable
bankruptcy law for the contest of any payment by Guarantor or Borrower as a preferential or
fraudulent payment have expired. Any claim Guarantor may otherwise have against Borrower Or
any other guarantor of Borrower's ObligatiOns arising from payments made pursuant to any of
the Loan Documents in all respects shall be subordinate to the full and complete payment or
performance and discharge of Borrower?s Obligations under this Guaranty and Guarantor's
obligations under this Guaranty, and'no such payment shall give rise to any claim'against Lender.
Unless and until Borrower's Obligations and Guarantor?s obligations under this Guaranty have
been paid and performed in full, Guarantor will not assign or otherwise transfer any such claim
to any other person or entity. -

7. Reinstatement. The obligations of Guarantor pursuant to this Guaranty shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of any of Borrower's Obligations or Guarantor's Obligations under this Guaranty is rescinded or
otherwise must be restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Guarantor or Borrower or otherwise, all as though such payment

had not been made.

8.- Financial Statements. Guarantor hereby represents and Warrants to Lender that
all of the ?nancial statements of Guarantor previously submitted to Lender are true, complete
and correct in all material respects, disclose all actual and contingent liabilities, and fairly present
the ?nancial condition of Guarantor, 'and?do not contain any untrue statement of a material fact or
omit to state a fact material to the ?nanCial statements submitted or this'Guaranty and no

 

material adverse change has occurred in the ?nancial statements from the dates thereof until the
date hereof. Guarantor shall furnish to Lender annual ?nancial statements for each calendar year
no later than ninety (90) days after the end of such years in a form substantially similar to the
form of ?nancial statements previously submitted by Guarantor to Lender. Within ten (10) days
of ?ling, Guarantor shall furnish Lender copies of federal tax returns. So long as this guaranty
remains in effect, GuarantOr shall provide Lender a ?Certificate of Solvency? in the form
attached as Exhibit 

9. Successors and Assigns. This Guaranty shall inure to the benefit of Lender and
its successors and assigns. This Guaranty shall be binding on Guarantor and the heirs, legatees,
successors and assigns of Guarantor.

 

10. No Waiver of Rights. No delay or failure on the part of Lender to exercise any
right, power or privilege under this Guaranty'or any of the other Loan Documents shall Operate
as a waiver thereof, and no Single or partial exercise of any right, power or privilege shall
preclude any other or further exerCise thereof or the exercise of any other power or right, or ?be
deemed to establish a custom or course of dealing or performance between the parties hereto.
The rights and remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law. No notice to, or demand on, Guarantor in any case shall entitle

I Guarantor to any other or further notice or demand in the same, similar or other circumstance.

 

11. Modi?cation. The terms of this Guaranty may be waived, discharged, or
terminated only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment, modification, waiver or
other change of any of the terms of this Guaranty shall be effeCtive without the prior written
consent of Lender. -

12. oinder. Guarantor agrees that any action to, enforce this Guaranty may be
brought against Guarantor without any reimbursement or joinder of Borrower or any other
guarantor of Borrower?s Obligations in such action.

13. Severabili?gj. In the event that any provision of this Guaranty is deemed to be
invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any.
administrative agency or any court, Guarantor and Lender shall negotiate an equitable adjustment
in the provisions of the same in order to effect, to the maximum extent permitted by law, the
purpose of this Guaranty and the validity and enforceability of the remaining provisions, or
portions or applications thereof, shall not be affected thereby and shall remain in full force and
effect. 

. 14. Applicable Law. This Guaranty shall be governed as to validity, interpretation,
effect and in all other respects by laws and decisions of the State of Indiana. -

15. Notice. All notices, communications and waivers under this Guaranty shall be in
writing and shall be delivered in person or (ii) mailed, postage prepaid, either by registered or
certi?ed mail, return receipt requested, or by overnight express carrier, addressed in each

case as follows:

To Lender: Home Federal Savings Bank
501 Washington Street
P. O. Box 408
Columbus, Indiana 472020408
Attn: John F. Schilling
Telephone: (812) 3789840
Facsimile: (812) 378?4663

With copy to: Locke Reynolds LLP 
201 North Illinois Street, Suite 1000
?90. Box 44961 . 
Indianapolis, Indiana 46244?0961
Attn: Rex E. Bennett
Telephone: (317) 237-3896
Facsimile: (317) 237-3900

To Guarantor: Gregory . Pence
3801 Tupelo Drive
PO. Box 344' -
Columbus, Indiana 47202-0344

. With cow to: Baker Daniels
300 North Meridian Street
Indianapolis, Indiana 46204
Attn:' Joseph M. Scirnia, .
Telephone: (317) 569?4680
. Facsimile: (317) 5694800

or to any other address as to any of the parties hereto, as such party shall designate in a written
notice to the other party hereto. All notices sent pursuant to the terms of this Section 15 shall be
deemed received (1) if personally delivered, or by facsimile with receipt of delivery, then on the
date of delivery, (ii) if sent by overnight, express carrier, then on the next federal harming day
immediately following the day sent, or if sent by registered or certi?ed mail, then on the
earlier of the third federal banking day following the day sent or when actually received.

10. OF JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH

COUNSEL KNOWINGLY, - VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY OF THE
LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OR EITHER OF THEM. NEITHER
BORROWER NOR LENDER SHALL SEEK ACTION .IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED
TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY EITHER
BORROWER OR LENDER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY

BOTH OF THEM.

10. AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL-ACTIONS OR PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY
OR ANY OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT
OR SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA.
BORROWER AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED BY BORROWER OR LENDER IN ANY OF SUCH COURTS, AND
EACH OF THEM HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS
AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND
AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER

- PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER OR LENDER AT THE ADDRESS TO WHICH
NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT. BORROWER
AND LENDER WAIVE ANY CLAIM THAT MARION COUNTY, INDIANA, OR THE
SOUTHERN DISTRICT INDIANA IS AN EICONVENIENTFORUM OR AN
IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD BORROWER AND
LENDER, AFTER BEING SO SERVED, FAIL TO OR ANSWER TO ANY
SUMMONS, COMPLAINT, PROCESS, OR PAPERS SO SERVED WITHIN THE
- NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF,

. BORROWER OR LENDER, AS APPROPRIATE, SHALL BE DEEMED IN DEFAULT
AND AN ORDER JUDGMENT MAY BE ENTERED AGAINST BORROWER
OR LENDER, AS APPROPRIATE, AS DEMANDED, OR PRAYED FOR IN SUCH
SUMMONS, COMPLAINT, PROCESS, OR PAPERS.

 

 WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date ?rst
above written.


r7 

Gregory Pen?e

475432_1

EXHIBIT 

CERTIFICATE REGARDING SOLVENCY

Gregory J. PenCe, (the ?Guarantor?), makes the following representations to Home Federal
Savings Bank (the ccLender?) and acknowledges that the Lender is entitled to rely and will rely
upon these representations, in providing certain ?nancial accommodations to KP Oil, Inc., an
Indiana corporation, pursuant to a certain Loan Agreement dated of even date herewith, (the
??Agreement?). 

1. The assetsof the Guarantor at a ?fair valuation? within the meaning of the United
.States Bankruptcy Code of 1978, as amended (the ?Code?), exceed the liabilities of
the Guarantor, including without limitation contingent liabilities to the extent
appr0priatefor consideration in determining Whether the Guarantor is ?insolvent?,
within the meaning of the Code, but excluding the Guarantor?s contingent liability
under the Unconditional Unlimited Guaranty (the ?Guaranty?) required to be given
by the Guarantor under the terms of the Agreement.

2. The Guarantor is not insolvent within the meaning of the Code, after taking into
account its contingent liability under the Guaranty.

3. . After taking into account its contingent liability under the Guaranty, the Guarantor
has suf?cient capital for the operation of its business as presently conducted and at
the level of operations contemplated for the foreseeable future.

4. The Guarantor is currently paying its debts as they become due in the ordinary
course of its business. After taking into account its contingent liability under the
Guaranty, the Guarantor believes that it will be able to continue to pay its debts as
they become due in the ordinary course of its business.

Dated: January, 12, 2001

grams

Gre Iy Pence

UNCONDITIONAL UNLIMITED GUARANT 

THIS UNCONDITIONAL UNLIMITED GUARANTY (this "Guaranty?) is dated as
of September 14, 2001, by GREGORY J. PEN CE (?Guarantor") for the bene?t of HONIE

FEDERAL SAVINGS BANK ("Lender").
I A S:

A. Lender has agreed to loan the principal amount of up to Nine Hundred Twelve
Thousand and 00/100 Dollars (the "Loan") to KP Oil, Inc., an Indiana

corporation, ("Borrower").

B. A condition precedent to Lender?s extension of the Loan to Borrower is the
execution and delivery of this Guaranty, (ii) that certain Mortgage Note of even date herewith
(the "Note") made by Borrower payable to Lender to evidence the Loan, and the other Loan
Documents (as defined in the Note).

NOW, THEREFORE, for good and valuable consideration, the receipt and suf?ciency
of which hereby are acknowledged, Guarantor hereby agrees as follows:

1. Guaranty of Payment. Guarantor hereby unconditionally and irrevocably
guarantees to? Lender the punctual payment and performance when due, whether at stated
maturity or by acceleration or otherwise, of the indebtedness and other obligations of Borrower
to Lender evidenced by the Note and any other amounts that may become owing by Borrower
under the Loan Documents (such indebtedness, obligations and other amounts are hereinafter
referred'to as ?Borrower's Obligations Guarantor agrees that this Guaranty is a present and
continuing guaranty of payment and not of collectibility, and that Lender shall not be required to
prosecute collection, enforcement or other remedies against Borrower or any other guarantor of
Borrower's Obligations, or to enforce or resort to any collateral for the repayment of Borrower's
Obligations or other rights or remedies pertaining thereto, before calling on Guarantor for
payment. Guarantor agrees that if for any reason Borrower shall fail or be unable to pay,
punctually and fully, any of Borrower's Obligations, Guarantor shall pay such obligations to
Lender in full immediately upon demand. Guarantor agrees that one or more successive actions
may be brought against Guarantor, as often as Lender deems advisable, until all of Borrower's

Obligations are paid and performed in full.

 

2. Representations and Warranties. The following shall constitute representations
and warranties of Guarantor and Guarantor hereby acknowledges that Lender intends to make the

Loan in reliance thereon:

a. Guarantor is- not in default and no event has occurred that with the passage
of time and/or the giving of notice or both will constitute a default under any agreement
to which Guarantor is a party, the effect of which will impair performance by Guarantor

EXHIBIT



 

of his, her or its obligations under this Guaranty. Neither the execution and delivery of
this Guaranty nor compliance with the terms and provisions hereof will violate any
applicable law, rule, regulation, judgment, decree or order, or will con?ict with or result
in any breach of any of the terms, covenants, conditions or provisions of any indenture,
mortgage, deed of trust, instrument, document, agreement or contract of any kind that
creates, represents, evidences or provides for any lien, charge or encumbrance upon any
of the property or assets of Guarantor, or any other indenture, mortgage, deed of trust,
instrument, document, agreement or contract of any kind to which Guarantor is a party or
to which" Guarantor or the property of Guarantor may be subject.

b. There is not any litigation, arbitration, governmental or administrative
proceedings, actions, examinations, claims or demands pending, or to Guarantor?s
knowledge, threatened that could adversely affect performance by Guarantor of his, her
or its obligations under this Guaranty.

c, Neither this Guaranty nor any statement or certi?cation as to facts
previously furnished or required herein to be furnished to Lender by Guarantor, contains
any material inaccuracy or untruth in any representation, covenant or warranty or omits to
state a fact material to this Guaranty.

3. Continuing Guaranty. Guarantor agrees that the obligations of Guarantor
pursuant to Section 1 above and any other provision of any of the Loan Documents shall be
primary obligations, shall not be subject to any counterclaim, set?off, abatement, deferment or
defense based upon any claim that Guarantor may have against Lender, Borrower, any other
guarantor of Borrower's Obligations or any other person or entity, and shall remain in full force
and effect without regard to, and shall not be released, discharged or affected in any way by, any
circumstance or condition (whether or not Guarantor shall have any knowledge thereof),

including Without limitation:

 

a. any?lack of validity or enforceability of any of the Loan Documents;

b. any termination, amendment, modi?cation or other change in any of the
Loan Documents, including, without limitation, any modification of the interest rate(s)

described therein;

c. any furnishing, exchange, substitution or release of any collateral securing
repayment of the Loan, or any failure to perfect any lien in such collateral;

d. any failure, omission or delay on the part of Borrower, Guarantor, any
other guarantor of Borrower's Obligations or Lender to conform or comply with any term
of any of the Loan Documents or any failure of Lender to give notice of any Event of

Default (as de?ned in the Note);

e. any waiver, compromise, release, settlement or extension of time of
payment or performance or observance of any of the obligations or agreements contained
in any of the Loan Documents;

f. any action or inaction by Lender under or in respect of any of the Loan
Documents, any failure, lack of diligence, omission or delay on the part of Lender to
enforce, assert or exercise any right, power or remedy conferred on it in any of the Loan
Documents, or any other action or inaction on the part of Lender; 

g. any voluntary or involuntary bankruptcy, insolvency, reorganization,
arrangement, readjustment, assignment for the bene?t of creditors, composition,
receivership, liquidation, marshalling of assets and liabilities or similar events or
proceedings with respect to Borrower, Guarantor or any other guarantor of Borrower's
Obligations, as applicable, or any of their respective property or creditors, or any action
taken by any trustee or receiver or by any court in any such proceeding;

h. any merger or consolidation of Borrower into or with any entity, or any
sale, lease or transfer of any of the assets of Borrower, Guarantor or any other guarantor
of Borrower's Obligations to any other person or entity; 

i. any change in the ownership of Borrower or any change in the relationship
between Borrower, Guarantor or any other guarantor of Borrower's Obligations, or any

termination of any such relationship;

j. any release or discharge by operation of law of Borrower or any other
guarantor of Borrower's Obligations from any obligation or agreement contained in any
of the Loan Documents; or

k. any other occurrence, circumstance, happening or event, whether similar
or dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might
constitute a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which otherwise might limit recourse against Borrower or Guarantor.

4. Waivers. Guarantor unconditionally waives notice of any of the matters
referred to in Section 3 above, (ii) all notices which may be required by statute, rule of law or
otherwise, now or hereafter in effect, to preserve intact any rights against Guarantor, including,
without limitation, any demand, presentment and protest, proof of notice of non?payment under
any of the Loan Documents and notice of any Event of Default or any failure on the part of
Borrower, Guarantor or any other guarantor of Borrower's Obligations to perform or comply
- with any covenant, agreement, term or condition of any of the Loan Documents, any right to
the enforcement, assertion or exercise against Borrower, Guarantor or any other guarantor of

Borrower?s Obligations of any right or remedy conferred under any of the Loan Documents, (iv)
any requirement of diligence on the part of any person or entity, to the fullest extent permitted
by law and except as otherwise expressly provided in this Guaranty or the other Loan
Documents, any claims based on allegations that Lender has failed to act in a commercially
reasonable manner, (vi) any requirement to exhaust any remedies or to mitigate the damages
resulting from any default under any of the Loan Documents, and (vii) any netice of any sale,
transfer or other diSposition of any right,. title or interest of Lender under any of the Loan

Documents .

5. Subordination. Guarantor agrees that any and all present and future debts and
obligations of Borrower to Guarantor hereby are subOrdinated to the claims of Lender and hereby
are assigned by Guarantor to Lender as security for Borrower's Obligations and Guarantor?s

obligations under this Guaranty.

6. Subrogation Waiver. Notwithstanding any payment or performance by
Guarantor pursuant to this Guaranty, Guarantor shall not be entitled to be subrogated to any
rights of Lender against Borrower or any other guarantor of Borrower?s Obligations, and
Guarantor waives and releases all rights and claims to indemnification, reimbursement and
Contribution Guarantor now has,? or at any time hereafter may have, against Borrower or
Borrower's estate until Borrower's Obligations are paid in full and all periods under applicable
bankruptcy law for the contest of any payment by Guarantor or Borrower as a preferential or
fraudulent payment have expired. Any claim Guarantor may otherwise have against Borrower or
any other" guarantor of Borrower's Obligations arising from payments made pursuant to any of
the Loan Documents in all reSpects shall be subordinate to the full and complete payment or
performance and discharge of Borrower?s Obligations under this Guaranty and Guarantor?s
obligations under this Guaranty, and no such payment shall give rise to any claim against Lender.
Unless "and until Borrower?s Obligations and Guarantor's obligations under this Guaranty have
been paid and performed in full, Guarantor will not assign or otherwise transfer any such claim

to any other person or entity.

7. Reinstatement. The obligations of Guarantor pursuant to this Guaranty shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of any of Borrower's Obligations or Guarantor?s obligations under this Guaranty is rescinded or
otherwise must be restored or returned by Lender upon the insolvency, "bankruptcy, dissolution,
liquidation or reorganization of Guarantor or Borrower or otherwise, all as though such payment

had not been made. .

8. - Financial Statements. Guarantor hereby represents and warrants to Lender that
all of the ?nancial statements of Guarantor previously submitted to Lender are true, complete
and correct in all material respects, disclose all actual and contingent liabilities, and fairly present
the financial condition of Guarantor, and do not contain any untrue statement of a material fact or
omit to state a fact material to the financial statements submitted or this Guaranty and no

 material adverse change has occurred in the ?nancial statements from the dates thereof until the
date hereof. Guarantor shall furnish to Lender annual ?nancial statements for each calendar year
no later than ninety (90) days after the end of such years in a form substantially similar to the
form of ?nancial statements previously submitted by Guarantor to Lender. Within ten (10) days
of ?ling, Guarantor shall furnish Lender copies of federal tax returns. So long as this guaranty
remains in effect, Guarantor shall provide Lender a ?Certi?cate of Solvency? in the form

attached as Exhibit 

9. Successors and Assigns. This Guaranty shall inure to the benefit of Lender and
its successors and assigns. This Guaranty shall be binding on Guarantor and the heirs,-legatees,

successors and assigns of Guarantor.

10. N0 Waiver of Rights. No delay or failure on the part of Lender to exercise any
right, power or privilege under this Guaranty or any of the other Loan Documents shall operate
as a waiver thereof and no single or partial exercise of any right, power or privilege shall
preclude any other or further exercise thereof or the exercise of any other power or right, or be.
deemed to establish a custom or course of dealing or performance between the parties hereto.
The rights and remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law. No notice to, or demand on, Guarantor in any case shall entitle
Guarantor to any other or further notice or demand in the same, similar or other circumstance 

11. Modification The terms of this Guaranty may be waived discharged, or
terminated only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought amendment, modi?cation, waiver or
other change of any of the terms of this Guaranty shall be effective without the prior written

consent of Lender.

. 12. cinder. Guarantor agrees that any action to enforce this Guaranty may be
brought against Guarantor without any reimbursement or joinder of Borrower or any other
guarantor of Borrower's Obligations in such action.

13. Severability. In the event that any provision of this Guaranty is deemed to be
invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any
administrative agency or any court, Guarantor and Lender shall negotiate an equitable adjustment
in the provisions of the same in order to effect, to the maxirnurn extent permitted by law, the
purpose of this Guaranty and the validity and enforceability of the remaining provisions, or
portions or applications thereof, shall not be affected thereby and shail remain in full torce and

effect.

14. Applicable Law. This Guaranty shall be governed as to validity, interpretation,
effect and in all other respects by laws and decisions of the State of Indiana.

15. Netice. All notices, communications and waivers under this Guaranty shall be in
writing and shall be delivered in person or (ii) rnailed, postage prepaid, either by registered or
certified mail, return receipt requested, or by overnight express carrier, addressed in each
case as follows: 

To Lender: Home Federal Savings Bank
501 Washington Street
P. O. Box 408
Columbus, Indiana 47202?0408
Attn: John F. Schilling
Telephone: (812) 3783840
Facsimile: (812) 3784663

With copy to: Locke Reynolds LLP
201 North Illinois Street, Suite 1000
PO. Box 44961
Indianapolis, Indiana 46244-0961
Attri: Rex Bennett
Telephone: (317) 237?3896
Facsimile: (317) 237~3900

To Guarantor: Gregory I. Pence
3801 Tupelo Drive

PO. Box 344
Columbus, Indiana 472020344

With cepy to: Baker Daniels
300 North Meridian Street
Indianapolis, Indiana 46204
Attn: Joseph M. Sciniia
Telephone: (317) 569?4680
Facsimile: (317) 569?4800

or to any other address as to any of the parties hereto, as such party shall designate in a written
notice to the other party hereto. All notices sent pursuant to the terms of this Section 15 shall be
deemed received if personally delivered, or by facsimile with receipt of delivery, then on the
date of delivery, (ii) if sent by overnight, eXpress carrier, then on the next federal banking day
immediately following the day sent, or if sent by registered or certi?ed mail, then on the
earlier of the third federal banking day following the day sent or when actually received.

10. WAIVER OF JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING OR HAVING HAD: THE OPPORTUNITY TO CONSULT WITH

COUNSEL KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY OF THE
- LOAN DOCUIVIENTS, OR ANY COURSE OF CONDUCT, DEALING, 
ORAL OR WRITTEN) OR ACTIONS OR EITHER OF THEM. NEITHER
BORROWER NOR LENDER SHALL SEEK ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED
TO HAVE BEEN MODIFIED IN ANY RESPECT BY EITHER
BORROWER OR LENDER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY

BOTH OF THEM.

10. JURISDICTION AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY
OR ANY OF THE LOAN DOCUIVIENTS SHALL BE LITIGATED IN THE CIRCUIT
OR SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF INDIANA.
BORROWER AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR 
COMIVIENCED BY BORROWER OR LENDER IN ANY OF SUCH COURTS, AND
EACH OF THEM HEREBY WAIVES PERSONAL SERVICE OF THE SUMIVIONS
AND CONTPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND
AGREES THAT SERVICE OF SUCH SUNIMONS AND COMPLAINT OR OTHER
PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER OR LENDER AT THE ADDRESS TO WHICH
NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT. BORROWER
AND LENDER WAIVE ANY CLAIM THAT MARION COUNTY, INDIANA, OR THE
SOUTHERN DISTRICT OF INDIANA IS AN INCONVENIENT FORUM OR AN
MPROPER FORUM BASED ON LACK OF VENUE. SHOULD BORROWER AND
LENDER, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY
SUWONS, PROCESS, OR PAPERS SO SERVED WITHIN THE
NUIVIBER OF DAYS PRESCRIBED BY LAW AFTER THE MAIEING THEREOF,
BORROWER OR LENDER, AS APPROPRIATE, SHALL BE IN DEFAULT
AND AN ORDER ANDIOR MAY BE ENTERED AGAINST BORROWER
OR LENDER, AS APPROPRIATE, AS DEMANDED, OR PRAYED FOR 34 SUCH

COWLAINT, PROCESS, OR PAPERS.

IN WITNESS WHEIEOF, Guarantor has executed this Guaranty as of the date ?rst
above written.

MIL/a?cg?w

Gregory I}e?ce/
501315_1

STATE OF INDIANA 

COUNTY OF MARION 



Before me, a Notary Public, in and for said County and State, personally appeared
Gregory . Pence, who after having been duly sworn, acknowledged the execution of the

foregoing Unconditional Unlimited Guaranty.

 
 

WITNESS my hand and Notarial Seal this 14th

 

 

 

Notary Public Printed

'My County of Residence:

My Commission Expires:

 

 

EXHIBIT 

CERTIFICATE REGARDING SOLVENCY

Gregory J. Pence, (the ?Guarantor?), makes the following representations to Home Federal
Savings Bank (the ?Lender?) and acknowledges that the Lender is entitled to rely and will rely
upon these representations, in providing certain ?nancial accommodations to KP Oil, Inc, an
Indiana corporation, pursuant to a certain Loan Agreement dated of even date herewith, (the

?Agreement?).

1. The assets of the Guarantor at a ?fair valuation? within the meaning of the United
. States Bankruptcy Code of 1978, as amended (the ?Code?), exceed the liabilities of
the Guarantor, including without limitatidn contingent liabilities to the extent
appropriate for consideration in determining whether the Guarantor is ?insolvent?,
within the meaning of the Code, but excluding the Guarantor?s contingent liability
under the Unconditional Unlimited Guaranty (the ?Guaranty?) required to be given

by the Guarantor under the terms of the Agreement.

2. . The Guarantor is not insolvent within the meaning of the Code, after taking into
account its contingent liability under the Guaranty.

3. After taking into account its contingent liability under the Guaranty, the Guarantor
has sufficient capital for the operation of its business as presently conducted and at
the level of Operations contempl ated; for the foreseeable future.

4. The Guarantor is currently paying its debts as they become due in the ordinary
course of its business. After taking into account its contingent liability under the

Guaranty, the Guarantor believes that it will be able to continue to pay its debts as
they become due in the ordinary course of its business.

Dated: September 14, 2001



Gr ory Pence

10

 

STATE OF INDIANA IN THE MARION SUPERIOR COURT

COUNTY OF MARION i SS: CAUSE NO. 
HOMEFEDERAL BANK 
Plaintiff, i FEEAE 
VS. 3 AUG 3 1 2004 42'
GREGORY J. PENCE, i 

MOTION FOR AUTOMATICE ENLARGEMENT OF TIME

Defendant Gregory J. Pence (?Defendant?), by counsel, moves the Court, pursuant to
Trial Rule and Local Rule for an automatic enlargement of time within which to
respond to plaintiff HomeFederal Bank?s (?Plaintiff Complaint, and in support of this Motion
states:

1. Plaintiff ?led its Complaint herein on August 4, 2004.

2. The Summons and a copy of Plaintiff?s Complaint were served on Defendant by
certi?ed mail on August 9, 2004; therefore, Defendant currently is required to respond to
Plaintiff?s Complaint by September 1, 2004, which time has not expired.

3. The date to which time is enlarged pursuant to this Motion is October 1, 2004.

WHEREFORE, Defendant prays that the Court grant Defendant an enlargement of time
of thirty (30) days, to and including October 1, 2004, within which to respond to Plaintiff?s

Complaint, and for all other proper relief.

 

     
    

Attorney No. 6485?49
Attorneys for Defendant

  





r? 

2004?

CERTIFICATE OF SERVICE

f'
The undersigned hereby certi?es that a copy of the foregoing has been served this 305'

day of August, 2004, by ?rst-class United States mail, postage prepaid, upon the following

counsel of record:

Jeffrey M. Boldt

LOCKE REYNOLDS LLP

201 N. Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961

SOMMER BARN ARD ATTORNEYS, PC
One Indiana Square, Suite 3500
Indianapolis, IN 46204

317~713?3500

Fax: 317-713-3699

MM

R. ammo?d, 


     

STATE OF INDIANA IN THE MARION SUPERIOR COURT

 

SS:
COUNTY OF MARION CAUSE NO. 
HOMEFEDERAL BANK 

Plaintiff, 

vs. 

GREGORY J. PENCE, 01.59% ?it/Errata
MARION uncut count

APPEARANCE BY ATTORNEY IN CIVIL CASE

Party Classi?cation: Initiating Responding Intervenor 
1. The undersigned attorney and all attorneys listed on this form now appear in this case for
the following party member(s): Gregory J. Pence

482 South Mutz Drive

Columbus, IN 47201

2. Applicable attorney information for service as required by Trial Rule and for case
information as required by Trial Rules 3.1 and is as follows:

Name: R. C. Richmond, Attorney No. 6485?49
Address: SOMMER BARNARD ATTORNEYS, PC Phone: (317) 713?3500
One Indiana Square, Suite 3500 Fax (317) 713-3699
Indianapolis, IN 46204 Computer Address: None
3. There are other party members: Yes No 

4. If ?rst initiating party ?ling this case, the Clerk is requested to assign this case the
following Case Type under Administrative Rule 

5. I will accept service by FAX at the above noted number: Yes No 
6. This case involves support issues. Yes No 

7. There are related cases: Yes No 

8. This form has been served on all other parties.

Certi?cate of Service is attached: Yes No

9. Additional information required by local rule: None

  
 

ARDATTORNE 

Aond, 
Attorney N0. 6485- 49
Attorneys for Defendant

CERTIFICATE OF SERVICE

The undersigned hereby certi?es that a copy of the foregoing has been served thisgvb?

day of August, 2004, by ?rst?class United States mail, postage prepaid, upon the following

counsel of record:

Jeffrey M. Boldt

LOCKE REYNOLDS LLP

201 N. Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961

SOMMER BARNARD ATTORNEYS, PC
One Indiana Square, Suite 3500
Indianapolis, IN 46204

317-713-3500

Fax: 317-713-3699

E. ?ichmd?d??l 

Uta/at

     

STATE OF INDIANA 

)ss:

COUNTY OF MARION 

HOMEFEDERAL BANK
Plaintiff,



GREGORY J. PENCE,

ORDER

 

IN THE MARION SUPERIOR COURT

CAUSE NO. 

 

OCT 0 7 2004

aw

MARION CIRCUIT COURT

Defendant Gregory J. Pence having filed its ?Veri?ed Motion for

Additional Enlargement of Time,? and the Court, having considered said Motion and being duly

advised in the premises, now ?nds that said Motion should be granted.

IT IS HEREBY ORDERED that Defendant be and hereby is granted an enlargement of

time to and including October 31, 2004, within which to respond to Plaintiff?s Complaint.

10h i0?

Dated
Distribution attached:

R. C. Richmond, 

Sommer Barnard Attorneys, LLC
One Indiana Square, Suite 3500
Indianapolis, IN 46204

Jeffrey M. Boldt

Locke Reynolds LLP

201 N. Illinois Street, Suite 1000
PO. box 44961

Indianapolis, IN 46244-0961

174735g1

 

JUDGE, Marion Superiidr Court No. 5



 

 

Locke Reynolds LLP

LOCKE REYNOLDS 201 North Illinois Street, Suite. 1000
PD. Box 44961

Counsellors at Law Indianapolis, IN 46244-0961

Ovrmight driizwirs use zip (0:19:16204
Jeffrey M. Boldt 3112313800
317-237?3374 Fax 31??23??3900
jboldt@locke. com

October 5, 2004

 

VIA CERTIFIED RETURN RECEIPT REQUESTEBIK

Doris Sadler, Clerk 
MARION COUNTY ?if
COURTS /d

200 East Washington Street 

W122 City?County Building
Indianapolis, IN 46204

 
   



"T-orpora?o 

  

 

Our File No.10083-14

Dear Ms. Sadler:

Enclosed is the original and suf?cient copies of Plaintiff?s Objection to Defendant?s
Motion for Additional Enlargement of Time. Please return a ?le-stamped copy to the
undersigned in the enclosed self-addressed, stamped envelope.

This correspondence is being transmitted via Certi?ed Mail and pursuant to Rule 
should be afforded a ?ling date of today, October 5, 2004. Thank you for your assistance in
this matter.

Sincerely,
LOCKE REYNOLDS 

?#4227 
Jeffrey ivi Boldt

JMsta
Enclosure
cc: R. C. Richmond, enclosure)

Dictared, but not read
68 1219_1

locks. com

IN THE MARION SUPERIOR COURT OF INDIANA

HOMEFEDERAL BANK, CAUSE NO. 

Plaintiff, ?digit: fat?
v. {mg git} . 5, 
are; .. . a: m,
GREGORY J. FENCE, B'r??tw?i??inx my -
whim? ll
Defendant. 

OBJECTION TO MOTION FOR ADDITIONAL
ENLARGEMENT OF TIME

Plaintiff, HomeFederal Bank by counsel, hereby objects to Defendant's
Veri?ed Motion for Additional Enlargement of Time ("Motion") and, in support of its objection,
states as follows:

1. Defendants ?led the Motion on or about October 1, 2004.

2. The Motion was received by counsel for HomeFederal on October 4, 2004.

3. Counsel for Defendant recites that he has had numerous other obligations and

commitments during the last thirty (3 0) days and therefore requires additional time within which

to prepare a response to the Complaint.

4. This is a simple breach of contract case without complicated legal issues.
5. The Complaint is a short document which recites uncomplicated facts.
6. Counsel for Defendant is a partner in a large law ?rm that employs numerous

attorneys who are capable of preparing a competent response to the Complaint.
7. It is untenable that counsel for the Defendant was either unable to prepare a
response during his ?rst extension of time or was unable to assign the task to another competent

attorney in his ?rm.

 

 

8. Any additional delay in this matter will unfairly prejudice HomeFederal.

LOCKE REYNOLDS LLP

By: ll?i/x?i?w

Jeffrey M. [B'oldt #22?702-49
Attorneys for Plaintiff
HomeFederal Bank

CERTIFICATE OF SERVICE

Service of the foregoing was made by placing a copy of the same into the United States
Mail, ?rst class postage prepaid, this 5th day of October, 2004, addressed to:

R. C. Richmond, 

SOMMER BARNARD ATTORNEYS PC
3500 One Indiana Square

Indianapolis, IN 46204

WV

Jeffrey M. Bloldt 

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961
317-237-3800

Fax: 317-237-3900
jboldt@locke.com

681167_l

 

 

STATE OF INDIANA IN THE MARION SUPERIOR COURT

 

MARION CE llCUiT 

GREGORY I. PENCE,

SS:
COUNTY OF MARION CAUSE NO. 
HOMEFEDERAL BANK 

Plaintiff, 

VS. 




VERIFIED MOTION FOR ADDITIONAL ENLARGEMENT OF TIME

Defendant Gregory J. Pence (?Defendant?), by counsel, moves the Court, pursuant to
Trial Rule for an additional enlargement of time within which to respond to plaintiff
HomeFederal Bank?s (?Plaintiff?s?) Complaint, and in support of this Motion states:

1. Defendant currently is required to respond to Plaintiff?s Complaint by October 1,
2004, which time has not expired.

2. The undersigned counsel has had numerous other obligations and commitments
during the last thirty (30) days, including, but not limited to, preparing and filing two (2)
appellate briefs in the Indiana Court of Appeals, and preparing for a jury trial set ?rst-choice to
commence on October 11, 2004, in the Marion Superior Court.

3. For the above reasons, the undersigned counsel requires an additional
enlargement of time within which to prepare Defendant?s response to Plaintiff? Complaint.

4. An enlargement of time of thirty (30) days to respond to Plaintiff?s Complaint is
both necessary and reasonable.

5. This motion is being made for good cause, and not for purposes of delay, and

justice requires the granting of this motion.

i Lag 1%

QUE tibia";

 

6. The undersigned counsel has advised Plaintiff?s counsel of the ?ling of this
Motion, and has been advised by Plaintiff?s counsel that Plaintiff objects to the granting of this
Motion.

WHEREFORE, Defendant prays that the Court grant Defendant an additional

enlargement of time of thirty (30) days, to and including October 31, 2004, within which to

   
   
 

respond to Plaintiff?s Complaint, and for all other proper relief.

Attorneys for Defendant

STATE OF 
SS:
COUNTY OF MARION 

Subscribed and sworn to before me, a Notary Public in and for said County and State, this
day of October, 2004.

/Sr

Notary Public Signature

4/9753? M. (il??li/z/v

Printed Name

 

CERTIFICATE OF SERVICE
The undersigned hereby certi?es that a copy of the foregoing has been served this 1St day
of October, 2004, by ?rst?class United States mail, postage prepaid, upon the following counsel

of record:

Jeffrey M. Boldt
LOCKE REYNOLDS LLP

201 N. Illinois Street, Suite 1000
PO. Box 44961
Indianapolis, IN 46244-0961

kc?izjehlnond in

  

SOMMER BARNARD ATTORNEYS, PC
One Indiana Square, Suite 3500
Indianapolis, IN 46204

317-713-3500

Fax: 317?713-3699

STATE OF INDIANA IN THE MARION SUPERIOR COURT

  

COUNTY OF MARION 3 SS: CAUSE NO. 
HOMEFEDERAL BANK
Plaintiff,
VS.

 

NOV 0 1 21304

25 3/1
Eli; mgr/,3
.2.

GREGORY J. PENCE,

Defendant.

GREGORY J. ANSWER
TO COMPLAINT

Defendant Gregory J. Pence (?Pence?), by counsel, for his Answer to plaintiff
Homefederal Bank?s (?Plaintiff? Complaint, states:
1. Pence is without suf?cient knowledge to either admit or deny the material

allegations contained in paragraph 1 of the Complaint, and therefore denies them.

2. Pence admits the material allegations contained in paragraph 2 of the
Complaint.
3. Pence admits that Exhibit A is a true and accurate copy of a Promissory

Note (the ?Note?) executed by Pence on March 31, 1998. Pence states that the Note

 

speaks for itself.

4. Pence denies the allegations in paragraph 4 of the Complaint.

5. Pence admits that Exhibit is a true and accurate copy of an
Unconditional Unlimited Guaranty (the ?Guaranty?) executed by Pence on or about
January 21, 2001. Pence states that the Guaranty speaks for itself.

6. Pence states that the Guaranty speaks for itself.

7. Pence denies the allegations in paragraph 7 of the Complaint.

 

8. Pence admits that a Mortgage Note is attached as Exhibit to the
Complaint (the ?Second Note?). Pence states that the Second Note speaks for itself. To
the extent the allegations in paragraph 8 of the Complaint are inconsistent with the terms
of the Second Note, Pence denies the allegations in paragraph 8 of the Complaint. Pence
is without suf?cient knowledge to either admit or deny the remaining allegations
contained in paragraph 8 of the Complaint, and therefore denies them.

9. Pence admits that Exhibit is a true and accurate copy of an
Unconditional Unlimited Guaranty (the ?Second Guaranty?) executed by Pence on or
about September 14, 2001. To the extent the allegations in paragraph 9 of the Complaint
are inconsistent with the terms of the Second Guaranty, Pence denies the allegations in
paragraph 9 of the Complaint.

10. Rhetorical paragraph 10 of the Complaint makes no allegation that
requires a response.

11. Pence states that the Second Guaranty speaks for itself.

12. Pence denies the allegations contained in paragraph 12 of the Complaint.

13. Pence admits the existence of the Mortgage Note attached as Exhibit 
(the ?Third Note?) to the Complaint. Pence states that the Third Note speaks for itself.
To the extent the allegations in paragraph 13 of the Complaint are inconsistent with the
terms of the Third Note, Pence denies the allegations in paragraph 13 of the Complaint.
Pence is without sufficient knowledge to either admit or deny the remaining allegations
contained in paragraph 13 of the Complaint, and therefore denies them.

14. Pence admits that he has not paid the installments due July 1, 2004, and

thereafter, as alleged in paragraph 14 of the Complaint.

15. -l7. Pence admits that KP Oil has ?led bankruptcy and has not paid the
installment due July 1, 2004, and thereafter, as alleged in paragraphs 15, 16, and 17 of the
Complaint.

18. Pence states that the Note, Second Note, and Third Note speak for
themselves.

19. Pence states that the June 30, 2004 correspondence speaks for itself.

20. Pence states that the July 30, 2004 correspondence speaks for itself.

21. 23. Pence admits the material allegations contained in paragraphs 21,
22, and 23 of the Complaint.

24. 26. Pence is without suf?cient knowledge to either admit or deny the
material allegations contained in paragraphs 24, 25, and 26 of the Complaint, and
therefore denies them.

WHEREFORE, Pence requests judgment in his favor and against Plaintiff on

Plaintiff Complaint and for all other proper relief.

 
  

  
 

SO BA ARD ATTORNEYS 

to

?R?jchm??a?d, 111, Attofney . 6485-49
Attorney for Defendant Gregory . Pencex'"

.4-
U1,

   
 

CERTIFICATE OF SERVICE

The undersigned hereby certi?es that a copy of the foregoing has been served this
day of November, 2004, by ?rst-class United States mail, postage prepaid, upon

the following counsel of record:

Jeffrey M. Boldt

LOCKE REYNOLDS LLP

201 N. Illinois Street, Suite 1000

PO. Box 44961 
Indianapolis, IN 46244-0961 

in

R. cFriich, 111 

   
 

 

IN THE MARION SUPERIOR COURT OF INDIANA

 

CIVIL DIVISION, ROOM NO.

HOMEFEDERAL BANK, CAUSE NO.

Plaintiff, i, .
EinEii
V. 
are a a an
GREGORY J. FENCE, grandma Jg?m
can: urn-.5
Defendants. MARION uncut must
COMPLAINT

Plaintiff, HomeFederal Bank (?HomeFederal?) by counsel, for its complaint against
Gregory J. Pence states as follows:

1. HomeFederal is a federally chartered savings bank with of?ces located at
501Washington Street, Columbus, Bartholomew County, Indiana 47202.

2. Pence is a resident of Bartholomew County, Indiana.

3. On March 31, 1998, Pence executed a Note ("Note in the original principal
amount of One Million Seven Hundred Forty Thousand and 00/100 Dollars 
payable to HomeFed'er'al. A true and accurate copy of Note 1' is'attached hereto as Exhibit A. 

4. Pursuant to the terms of Note 1, Pence was required to make payments of
principal and interest in the total amount of Twenty Thousand Nine Hundred Ninety Six and 
24/100 Dollars on the note beginning on May 1, 1998 and ending on April 1, 2008.

5. In order to induce HomeFederal to loan money to KP Oil, Inc., Pence, on or about
January 12, 2001, executed an Unconditional Unlimited Guaranty (the ?First Guaranty

Agreement"), whereby Pence guaranteed payment of the indebtedness of KP Oil to

EXHIBIT

J.

 

HomeFederal. A true and accurate copy of the Guaranty Agreement is attached hereto as
Exhibit B.

6. Pursuant to the First Guaranty Agreement, Pence agreed as follows:

Guarantor hereby unconditionally and irrevocably guarantees to Lender the punctual
payment and performance when due, whether at stated maturity or by acceleration or otherwise,
of the indebtedness and other obligations of Borrower to Lender evidenced by the Note and any
other amounts that may become owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter referred to as "Borrower's
Obligations?).

I 7. Pursuant to the First Guaranty Agreement, Pence also agreed as follows:

Guarantor agrees that if for any reason Borrower shall fail or be unable to pay, punctually
and fully, any of Borrower's Obligations, Guarantor shall pay such obligations to Borrower in
full immediately upon demand.

8. In reliance on the First Guaranty Agreement, on or about January 12, 2001,
HomeFederal loaned Fifteen Million and 00/ 100 Dollars to KP Oil pursuant to
a Mortgage Note ("Note A true and, accurate copy of Note 2 is attached hereto as Exhibit C.

9. In. order to induce HomeFederal toloanmoney to Oil, Inc, Pence, on or about
September 14, 2001, executed an Unconditional Unlimited Guaranty (the "Second Guaranty
Agreement"), whereby Pence guaranteed payment of the indebtedness of KP Oil to
HomeFederal. A true and accurate copy of the Guaranty Agreement is attached hereto as
Exhibit D.

10'. The First Guaranty Agreement and the Second Guaranty Agreement shall be

referred to collectively as the ?Guaranties? herein.

 

 

 

11. Pursuant to the Second Guaranty Agreement, Pence agreed as follows:

Guarantor hereby unconditionally and irrevocably guarantees to Lender the punctual
payment and performance when due, whether at stated maturity or by acceleration or otherwise,
of the indebtedness and other obligations of Borrower to Lender evidenced by the Note and any
other amounts that may become owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter referred to as "Borrower's
Obligations").

12. Pursuant to the Guaranty Agreement, Pence also agreed as follows:

Guarantor agrees that if for any reason Borrower shall fail or be unable to pay, punctually
and fully, any of Borrower's Obligations, Guarantor shall pay such obligations to Borrower in
full immediately upon demand.

13. In reliance on the Second Guaranty Agreement, on or about September 14, 2001,
HorneFederal loaned $912,000.00 to KP Oil pursuant to a Mortgage Note (?Note A true and
accurate copy of Note 3 is attached hereto as Exhibit E.

14. Pence has failed and refused to pay the installment owing on Note 1 due July 1,
2004 and all installments due thereafter, and as a result thereof, all sums due thereunder are now

due and owing.

15. On or about June 15, 2004, KP Oil filed for bankruptcy protection under

11 use. 11.

16. After ?ling for bankruptcy, KP Oil informed HomeFederal that KP Oil would

suspend payments required by the terms of the Note 2 and Note 3.

 

17. In fact, KP Oil has failed and refused to pay the installments owing on Note 2 and
Note 3 due July 1, 2004 and all installments due thereafter, and as a result thereof, all sums due
thereunder are now due and owing.

18. Pursuant to Note 1, Note 2 and Note 3, KP Oil's failure to make the July 1, 2004
payments is an event of default.

19. By correspondence dated June 30, 2004, HomeFederal provided notice to Pence
of KP Oil's statement that it would suspend its payments under Note 2 and Note 3 and requested
that, pursuant to the terms of the Guaranty Agreement, Pence make the payment which was due

on July 1, 2004.

20. By correSpondence dated July 30, 2004, HomeFederal provided notice to Pence
that HomeFederal had accelerated Pence's obligations under Note 1 and the Guaranties, such that
the entire amount of said Note 1 and the entire amount payable under the Guaranties, plus
interest and fees, was due and owing.

21. Pence continues to refuse to make any payments required of him under Note 1

and the Guaranties.

22. Pence's refusal to make the payments required under the Note 1 and the

Guaranties constitutes a breach of these agreements.

23. All conditions precedent to the bringing of this action have been performed, have
occurred, or have been waived. I

24. The total amount due under Note 1 includes the principal sum of $1,178,853.03,

together with interest as of August 1,2004 of $14,953.06 and late fees of $504.82, for a total as

of August 1, 2004 

 

 

25. The total amount due under the First Guaranty includes the principal sum of
$13,773,18690, together with interest as of August 1, 2004 of $168,993.87, escrow of 4,642.24
and late fees of $5,988.17, for a total as ofAugust 1, 2004 

26. The total amount due under the Second Guaranty includes the principal sum of
$853,441.03, together with interest as of August 1, 2004 of $10,502.05 and late fees of $361.24,
for a total as of August 1, 2004 of $863,304.32.

WHEREFORE, HomeFederal Bank respectfully requests the Court to ?nd that
Gregory J. Pence is in breach of his obligations under Note 1, the First Guaranty Agreement and
the Second Guaranty Agreement and that as a result of said breach HomeFederal has suffered
damages and that the Court Order that Gregory J. Pence pay such damages to HomeFederal Bank
in an amount not less than Sixteen Million Ten Thousand Four Hundred Thirty Seyen and
03/100 Dollars plus attorney's fees and costs, plus post judgment interest at the

statutory rate until said judgment is paid in full.

LOCKE EYNOLDS LLP .

By: A 

Jeffrey 11/1! Holdt, #2270249
Attorneys for Plaintiff,
HomeFederal Bank

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244w0961

Phone: (317) 23 7?3 800

Fax: (317) 237?3900

296_1

 

STATE OF INDIANA IN THE MARION SUPERIOR COURT

COUNTY OF MARION SS: CAUSE NO. 
HONIEFEDERAL BANK
Plaintiff,
vs. -

GREGORY J. PENCE,

Defendant.

GREGORY J. ANSWER
TO COMPLAINT

Defendant Gregory J. Pence (?Pence?), by counsel, for his Answer to plaintiff

Homefederal Bank?s (?Plaintiff?s?) Complaint, states:

1. Pence is without suf?cient knowledge to either admit or deny the material

allegations contained in paragraph 1 of the Complaint, and therefore denies them.

2. Pence admits the material allegations contained in paragraph 2 of the
Complaint.
3. Pence admits that Exhibit A is a true and accurate copy of a Promissory

Note (the ?Note?) executed by Pence on March 31, 1998. Pence states that the Note

speaks for itself.

4. Pence denies the allegations in paragraph 4 of the Complaint.
5. Pence admits that Exhibit is a true and accurate copy of 

Unconditional Unlimited Guaranty (the ?Guaranty?) executed by Pence on or about
January 21, 2001. Pence states that the Guaranty speaks for itself.
6. Pence states that the Guaranty Speaks for itself.

7. Pence denies the allegations in paragraph 7 of the Complaint.

EXHIBIT



 

8. Pence admits that a Mortgage Note is attached as Exhibit to the
Complaint (the ?Second Note?). Pence states-that the Second Note speaks for itself. To
the extent the allegations in paragraph 8 of the Complaint are inconsistent with the terms
of the Second Note, Pence denies the allegations in paragraph 8 of the Complaint. Pence
is without suf?cient knowledge to either admit or deny the remaining allegations
contained in paragraph 8 of the Complaint, and therefore denies them.

9. Pence admits that Exhibit is a true and accurate copy of an
Unconditional Unlimited Guaranty (the ?Second Guaranty?) executed by Pence on or
about September 14, 2001. To the extent the allegations in paragraph 9 of the Complaint
are inconsistent with the terms of the Second Guaranty, Pence denies the allegations in
paragraph 9 of the Complaint.

10. Rhetorical paragraph 10 of the Complaint makes no allegation that
requires a response.

11. Pence states that the Second Guaranty speaks for itself.

12. Pence denies the allegations contained in paragraph 12 of the Complaint.

13. Pence admits the existence of the Mortgage Note attached as Exhibit 
(the ?Third Note?) to the Complaint. Pence states that the Third Note speaks for itself.
To the extent the allegations in paragraph 13 of the Complaint are inconsistent with the
terms of the Third Note, Pence denies the allegations in paragraph 13 of the Complaint.
Pence is without suf?cient knowledge to either admit or deny the remaining allegations
contained in paragraph 13 of the Complaint, and therefore denies them.

14. Pence admits that he has not paid the installments due July 1, 2004, and

thereafter, as alleged in paragraph 14 of the Complaint.

 

15. ?17. Pence admits that KP Oil has ?led bankruptcy and has not paid the
installment due July 1, 2004, and thereafter, as alleged in paragraphs 15, 16, and 17 of the
Complaint.

18. Pence states that the Note, Second Note, and Third Note speak for
themselves.

19. Pence states that the June 30, 2004 correspondence speaks for itself.

20. Pence states that the July 30, 2004 correspondence speaks for itself.

21. 23. Pence admits the material allegations contained in paragraphs 21,

22, and 23 of the Complaint.

24. 26. Pence is without suf?cient knowledge to either admit or deny the
- material allegations contained in paragraphs 24, 25, and 26 of the Complaint, and

therefore denies them.

WHEREFORE, Pence requests judgment in his favor and against Plaintiff 0n

Plaintiffs Complaint and for all other proper relief.

 

BA ARDATTORNEYS 

1W

RYE. 111, Aa?iney . 6485?4
Attorney for Defendant Gregory . Pence

SO

     

 

a

CERTIFICATE OF SERVICE

The undersigned hereby certi?es that a copy of the foregoing has been served this
day of November, 2004, by ?rst?class United States mail, postage prepaid, upon
the following counsel of record:

Jeffrey M. Boldt
. LOCKE REYNOLDS LLP
201 N. Illinois Street, Suite 1000
PD. Box 4496]
Indianapolis, IN 462440961

  



R. V0 (1,111 

 

IN THE MARION SUPERIOR COURT OF INDIANA

HOMEFEDERAL BANK, CAUSE NO. 

Plaintiff, 

V. 

GREGORY J. PENCE, 

Defendant. 

AFFIDAVIT OF CHARLES R. FARBER

1, Charles R. Farber, state that I am an adult at least eighteen (18) years of age, and
competent to testify to the matters set forth herein. The facts stated in this Af?davit are within
my personal knowledge and are true and correct statements.

1. I am employed as Executive Vice President for HomeFederal Bank
(?HomeFederal?), a state chartered bank.

2. In my capacity as Executive Vice President, I am familiar with the loans from
HomeFederal, and certain other lenders for which HomeFederal acts as agent, to KP Oil, Inc.
Oil"). 1 am also familiar with the guaranty agreements executed by Gregory J. Pence
("Pence"), which guaranty agreements guaranteed the aforementioned loans to KP Oil and which
guaranty agreements are the subject of the instant lawsuit.

3. HomeFederal and certain other creditors for which HomeFederal acts agent,
loaned money to KP Oil, which loans are evidenced by the following:

A. Mortgage Note ("Note dated January 12, 2001, in the amount of
$15,000,000.00; and
B. Mortgage Note (?Note dated September 14, 2001, in the amount of

$912,000.00.

EXHIBIT

1

 

4. True and accurate copies of Note 1 and Note 2 are attached hereto as Exhibit A

and Exhibit B, respectively.
5. Note 1 and Note 2 are secured by a guaranty ("First Guaranty"), executed by

Pence on or about January 12, 2001.

6. - A true and valid copy of the First Guaranty is attached hereto as Exhibit C.
7. Paragraph 1 of the First Guaranty contains the following language:

Guarantor hereby unconditionally and irrevocably guarantees to
Lender the punctual payment and performance when due, whether
at stated maturity or by acceleration or otherwise, of the
indebtedness and other obligations of Borrower to Lender
evidenced by the Note and any other amounts that may become
owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter
referred to as "Borrower's Obligations?).

8. Paragraph 1 of the First Guaranty also contains the following language:

Guarantor agrees that if for any reason Borrower shall fail to or be
unable to pay, punctually and fully, any of Borrower?s Obligations,
Guarantor shall pay such obligations to Lender in full immediately
upon demand. Guarantor agrees that one or more successive
actions may be brought against Guarantor, as often as Lender
deems advisable, until all of Borrower?s Obligations are paid and
performed in full.

9. Note 1 and Note 2 are further secured by a guaranty ("Second Guaranty"),
executed by Pence on or about September 14, 2001.

10. A true and valid copy of the Second Guaranty is attached hereto as Exhibit D.

11. Paragraph 1 of the Second Guaranty contains the following language:

Guarantor hereby unconditionally and irrevocably guarantees to
Lender the punctual payment and performance when due, whether
at stated maturity or by acceleration or otherwise, of the
indebtedness and other obligations of Borrower to Lender
evidenced by the Note and any other amounts that may become
owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter
referred to as ?Borrower's Obligations").

 

12. Paragraph 1 of the Second Guaranty also contains the following language:
Guarantor agrees that if for any reason Borrower shall fail to or be
unable to pay, punctually and fully, any of Borrower's Obligations,
Guarantor shall pay such obligations to Lender in full immediately
upon demand. Guarantor agrees that one or more successive
actions may be brought against Guarantor, as often as Lender

deems advisable, until all of Borrower?s Obligations are paid and
performed in full.

13. KP Oil filed bankruptcy and defaulted on its obligation to repay both Notel and
Note 2.

14. HomeFederal received a distribution of $12,500,000.00 ?'om KP Oil's bankruptcy
estate, which amount was not suf?cient to pay off the amounts due and owing to under Note 1
and Note 2.

15. As of August 8, 2005, the total amount which remains due and owing under the
Note 1 and Note 2 is not less than $3,879,104.76.

16. By Correspondence Dated July 30, 2004, HomeFederal provided notice to Pence
of his obligations under the Pence Guaranties.

17. Pence has failed to make any payments under the Pence Guaranties.

18. Pence's refusal to make the payments required under the First Guaranty and the
Second Guaranty constitute breaches of those guaranties.

l9. Pence's obligation to HomeFederal pursuant to the First Guaranty and the Second
Guaranty is not less than $3,879,104.76, plus interest accruing after August 8, 2005, at the per
diem rate of $609.93, plus attorneys' fees and costs.

I VERIFY UNDER THE PENALTIES FOR PERJURY THAT THE FOREGOING
FACTS ARE TRUE AND ACCURATE.

DatedCharles R. Farber

 

3

IN THE MARION SUPERIOR COURT OF INDIANA

HOMEFEDERAL BANK, CAUSE NO. 
FILED
.
v. 3 AUG 12 2005 
?x ?54 1?2.
GREGORY J. PENCE, snafu? mfg;
MARIUN CIRCUIT COURT
Defendant. 

MOTION FOR SUMMARY JUDGMENT

Plaintiff, HomeFederal Bank, by counsel, pursuant to Rule 56 of the Indiana Rules of
Trial Procedure, respectfully request this Court enter summary judgment for HomeFederal Bank
in the form of the proposed Summary Judgment, ?led contemporaneously herewith, on
HomeFederal Bank's Complaint for the reason that there is no genuine issue of material fact and
Plaintiff is entitled to judgment as a matter of law. In support of this Motion, HomeFederal Bank
relies upon its Memorandum of Law and its Designation of Evidence, which have been

submitted herewith.

LOCKE REYNOLDS LLP

By:

 

Jeffrey M. Bolht #?2?2?702-49
Attorney for Plaintiff,
HomeFederal Bank

AUGI 2 2005)

CERTIFICATE OF SERVICE

Service of the foregoing was made by placing a copy of the same into the United States
Mail, ?rst class postage prepaid, this 12th day of August, 2005, addressed to:

R. C. Richmond, 

SOMMER BARNARD ATTORNEYS PC
3500 One Indiana Square

Indianapolis, IN 46204



Jeffrey M. l3oldtl

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961
317-237-3 800

Fax: 317-237-3900
jboldt@locke.com

729095_1

EXHIBIT A

UNCONDITIONAL UNLIMITED GUARANTY

THIS UNCONDITIONAL UNLIMITED GUARANTY (this Guaranty) is dated as
of January 12, 2001, .by GREGORY J. FENCE (?Guarantor") for the bene?t of HOME

FEDERAL BANK ("Lender").
W:

A. Lender has agreed to loan the principal of up to Fifteen Million and
00/100 Dollars (the ?Loan") to KP Oil, Inc, an Indiana corporation,
("Borrower"). 

B. A condition precedent to Lender's extension of the Loan to Borrower is the
execution and delivery of this Guaranty (ii) that certain Mortgage Note of even date herewith 
(the "Note?) made by Borrower payable to Lenderto evidence the Loan, and the other Loan
Documents (as de?ned in the Note). . .

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which hereby- are acknowledged,gGuarar-1tor hereby agrees as follows: 

1. Guaranty of Payment. Guarantor hereby unconditionally and. irrevocably
guarantees to Lender the punctual payrnent and performance when due, whether at stated

maturity or by acceleration or otherwise, of the indebtedness and other obligations of Borrower

to lender evidenced by the Note an any other amounts that may become owing by Borrower

under the Loan Documents (such indebtedness, obligations and other amounts are hereinafter
referred to as "Borrower?s Obligations Guarantor agrees that this Guaranty is a present and
continuing guaranty of payment and not of collectibility, and that Lender shall not be required to
prosecute collectiOn, enforcement or other remedies against Borrower or any other guarantor of
Borrower?s Obligations, or to enforce or resort to any collateral for the repayment of Borrower?s
Obligations or other rights" or remedies pertaining thereto, before calling on Guarantor" for
payment. Guarantor agrees that if for any reason Borrower shall fail or be unable to pay,
punctually and fully, any of Borrower?s Obligations, Guarantor slaw pay such obligations to
Lender in full immediately upon demand. Guaautor agrees that one or more successive actions
may be brought against Guarantor, as often as Lender deerns advisable?, until all of Borrower's

Obligations are paid and performed in full.

 

. 2. . Representations and Warranties. The following shall constitute repreSentations
and warranties of Guarantor and Guarantor hereby acknowledges that Lender intends to rnalte the
Loan in reliance thereon: 

a, - Guarmtor is not in default and no event has occurred that with the passage
of time and/ or the giving of notice will constitute a default under any agreement to which
Guarantor is a paryt ,the effect of which will impair performance-by Guarantor of his, her

 

or its obligations under this Guaranty. Neither the execution and delivery of this-

Guaranty nor compliance With?the terms and provisions hereof will violate any applicable
der, or will conflictwith or result in any

law, rule, regulation, judgment, decree or or
breach of any of the terms, covenants, conditions or provisions of any .indenture,
mortgage, deed of trust, instrument, document, agreement or contract of any kind that
creates, represents, evidences or provides for any lien, charge or encumbrance upon any
of the property or assets of Guarantor, or any other indenture, mortgage, deed of trust,
instrument, document, agreement or contract of any kind to which Guarantor is a party or

to which Guarantor or the property of Guarantor may be subject.

b. There is not any litigation, arbitration, governmental or administrative
proceedings, actions, examinations, claims or demands pending, or to Guarantor's
knowledge, threatened that could adversely affect performance by Guarantor of his, her
or its obligations under this Guaranty. 

c. Neither this Guaranty nor any statement or certification as to facts
previously furnished or required herein to be furnished to Lender by Guarantor, contains
any material inaccuracy or untruth in any representation, covenant or warranty or omits to
state a fact material to this Guaranty. 

3. Continuing .Guarargty; Guarantor agrees that ?Zthe obligations of Guarantor
pursuant to Section 1 above and any other provision of any of the Loan Documents shall be
primary obligations, shall not be subject to any counterclaim, set-off, abatement, deferment or

defense based 'upon any claim that Guarantor may have against Lender, Borrower, any other
remain in full force

 

and effect without regard to, and shall not be released, discharged or affected in any way by, any
circumstance or condition (whether or not Guarantor shall have any knowledge thereof),

including Without limitation:

-- gnarantor?of Borrower?s ations or any other person or entity, and shall

a: any lack of validity 0r enforceability of any of the Loan Documents;

b. any tennination, amendment, modification. or other change in any of the
Loan Documents, including, without limitation, any modi?cation of the interest rate(s)
described therein; 

c. my farnishing, exchange, substitution or release of my collateral securing

repayment of the Loan, or any failure to perfect any lien in such collateral;

d. any failure, omission or delay on the part of Borrower, Guarantor, any
other guarantor of Borrower's Obligations or Lender to conform or comply with any term 
of any of the Loan Documents or any failure of lender to give notice of any Event of

Default {as defined in the Note);

Ix)

e. any waiver, compromise, release, settlement or extension of time of
agreements contained -

payment or performance or observance of any of the obligations or
in any of the Loan Documents;

f. any action or inaction by Lender under or in respect of any of the Loan
Documents, any failure, lack Of diligence, omission or delay on the part of Lender to
enforce, assert or exercise any right, power or remedy Conferred on it in any of the Loan
Documents, or any other action or inaction on the part of Lender;

g. - any voluntary or involuntary bankruptcy, insolvency, reorganization,
arrangement, readjustment, assignment for the benefit of creditors, composition,
receivership, liquidation, marshalling of assets and liabilities or similar events or 
proceedings with respect to Borrower, Guarantor or any other guarantor of Borrower?s
Obligations, as applicable, or any of their respective property or creditors, or any action
taken by any trustee or receiver or by any court in any such proceeding;

h. any merger or consolidation of Borrower into or with any entity, or any
sale, lease or transfer or any of the assets of Borrower, Guarantor or any other guarantor

of Borrower? 3 Obligations to any other person or entity;

i, any change in the ownership of Borrower or any change in the relationship
between Borrower, Guarantor or any Other guarantor of Borrower?s Obligations, or any
termination-of- any such relationship; 

j. my release or discharge by operation of law of Borrower or any other
guarantor of Borrower?s Obligations from any obligation or agreement obntained in any
of the Loan Documents; or

k. any other occurrence, circumstance, happe or event, whether similar

or dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might

constitute a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which otherwise might limit recourse against Borrower or Guarantor.

4. . Waivers. Guarantor unconditionally waives notice of any Of the matters
referred to in Section 3 above, (ii) all notices Which may be required by statute, rule of law or
otherWise, now or hereafter in effect, to preserve intact any rights against Guarantor, including,
without limitation, any demand, presentment and protest, proof of notice of nonpayment under
any of the Loan Documents and notice of any Event of Default or any failure on the part of
Borrower, Guarantor or any other guarantor of Borrower?s Obligations to performer comply
with any covenant, agreement, term or condition of any of the Loan Documents, any right to
the enforcement, assertion or exercise against Borrower, Guarantor or any other guarantor of

 

Borrower?s Obligations of any right or remedy conferred under any of the Loan Documents, (iv)

any requirement of diligence on the part of any person or entity, to the fullest extent permitted
by law and except as otherwise expressly previded in this Guaranty or the other Loan
Documents, any claims based on allegations that Lender has failed to act in a commercially
reasonable manner, (Vi) any requirement to exhaust any remedies or to _mitigate the damages
resulting from any default under any of the Loan Documents, and (Vii) any notice of any sale,
transfer or other disposition of any right, title or interest of Lender under any of the Loan

ocume'uts .

S. Subordination. Guarantor agrees that any and allpresent and future debts and
obligations of Borrower to Guarantor hereby are subordinated to the claims of Lender and hereby
are assigned 'by Guarantor to Lender as security for Borrower?s Obligations and Guarantor?s

obligations under this Guaranty.

6. Sub-roggtion Waiver. Notwithstanding any payment or_ performance by
Guarantor pursuant to this Guaranty, Guarantor shall not be entitled to be: subrogated to any
rights of Lender against Borrower or any other guarantor of Borrower?s Obligations, and
Guarantor waives and releases all rights and claims to indemni?cation, reimbursement and
contribUtion Guarantor now has, or at any time hereafter may have, against. Borrower or
Borrower?s estate until Borrower?s obligations are paid in full and all. periods under applicable
bankruptcy law for the contest of any payment by Guarantor or Borrower as a preferential. or

fraudulentpayrnent have expired. Any claim Guarantor may otherwise have against Borrower Or

any other guarantor of Borrower?s Obligations arising from payments made pursuant to any of
full and complete payment or 

the Loan Documents in all respects shall be subordinate to the
performance arid of Borrower?s. Obligations under this Guaranty and tantor?s
obligations under this Guaranty, and no such payment shall give rise to any clairn' against Lender.
Unless and until Burrower?s Obligations and Guarantor's obligations under this Guaranty have

Guarantor will not assign or otherwise transfer any such claim

 

been paid and performed in full,
to any other person or entity.

7. Reinstatement. The obligations of Guarantor pursuant to this Guaranty shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of my of Borrower?s Obligations or Guarantor?s obligations under this Guaranty is rescinded or
red or returned by Lender upon the insolvency, bankruptcy, dissolution,

otherwise must be resto 
liquidation or reorganization of Guarantor or Borrower or otherwise, all as though such payment

had not been made.

 

8.. Financial Statements. Guarantor hereby represents and Warrants to Lender that

all of the financial statements of Guarantor previously submitted to Lender are true, complete
'al respects, disclose all actual and contingent liabilities, and fairly- present

and correct in all materr
the financial condition of Guarantor, 'and' do not contain any untrue statement of a material fact or

omit to state a fact material to the financial statements submitted or this Guaranty and no

5, from, the dates thereof until the

date hereof. Guarantor shall furnish to Lender annual financial statements for each calendar year
no later than ninety (90) days after the end of such years in a form substantially similar to the
form of financial statements previously submitted by Guarantor to Lender. Within ten (10) days
of filing, Guarantor shall furnish Lender copies of federal tax returns. So long as this guaranty
remains in effect, Guarantor shall provide Lender a ?Certi?cate of Solvency? in the form

attached as Exhibit 

material adverse chance has occurred in the ?nancial stateme

9. Successors and Assigns. This Guaranty shall inure to the benefit of Lender and
its successors and assigns. This Guaranty shall be binding on Guarantor and the heirs, legatees,
successors and assigns of Guarantor.

 

10. No Waiver of Rights. No delay or failure on the part of Lender to exercise any
right, power or privilege under this Guaranty?or any of the other Loan Documents shall Operate
?as ?a waiver thereof,? and no single or partial exercise of any right, poWer or privilege shall
preclude any otheror further exe'ICise thereof or the exercise of any other power or right, or be
deemed to establish a custom or course of dealing or performance between the parties hereto.
The rights and remedies herein provided are cumulative and not exclusive of any rights or
. remedies provided by law. No notice to, ?or demand on, Guarantor in any case shall entitle -

Guarantor to any other or further notice or demand in the same, similar or other circumstance.

 

11. Modi?cation. The terms of this Guaranty may be waived, discharged, or
terminated only by an instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment, modi?cation, waiver or
other change of any of the terms of this Guaranty shall be effective without the prior written

con sent of Lender.

UL).

12. Joinder. Guarantor agrees that any action to, enforce this Guaranty may be

brought against Guarantor without any reimbursement or joinder of Borrower or any other
guarantor of Borrower?s Obligations in such action.

13. Severabilitj. in the event that any provision of this Guaranty is deemed to be
invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any.
administrative agency or any court, Guarantor and Lender shalt negotiate an equitable adjustment
in the provisions of the same in order to effect, to the maximum extent permitted by law, the
purpose of this Guaranly and the vaiidity and enforceability of the remaining provisions, or
portions or applications thereof, shall not be affected thereby and shall remain in full force and
died. 

14'. Applicable Law. This Guaranty shall be governed as to validity, mterpretation,
effect and in all other respects by laws and decisions of the State of Indiana. 



15. Notice. All notices, communications and waivers Under this Guaranty shall be in
writing and shall be delivered in person or (ii) mailed, postage prepaid, either by registered or
certi?ed mail, return receipt requested, or by overnight express carrier, addressed in each

case as follows:

To Lender: Home Federal Savings Bani:
501 Washington Street
P. O- Box 408
Columbus, Indiana 47202?0408
Attn: John F. Schilling
Telephone:- (812) 378-7840
Facsimile: (812) 3784663

With copy to: Locke Reynolds LLP -
201 North Illinois Street, Suite 1000 
Po. Box 44961 . 
Indianapolis Indiana 46244?0961 
Attn: Rex E. Bennett
Telephone: (317) 237?3896
'Facsiinilei (317) 2376900

To Guarantor: Gregory J. Pence
3801 Tupelo Drive
PO. Box 344' . -
Indiana 47202?0344

. With copy to: Bake]: Daniels
300 North Meridian Street
Indianapolis, Indiana 46204
Attn:? IosephM. Scitnia. .
Telephone: (317) 5694680
A Facsimile: (317) 5694800

or to any other address as to any of the parties hereto, as such party shall designate in a written
to the terms of this Section 15 shall be

notice to the other party hereto. All notices sent pursnan
deemed received it personally delivered, or by facsimile with receipt of delivery, then on the

date of delivery, (ii) if sent by overnight, express carrier, then on the next federal banking day
immediately following the day sent, or (1 

'ii) if sent by registered of certi?ed mail, then on the
earlier of the third federal, banking day following the day sent or when actually received. 

. 10. or JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING on HAVING HAD THE OPPORTUNITY TO CONSULT .mrn 

 

COUNSEL KNOWINGLY, . VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF
THE. TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY OF THE
LOAN DOCUIWENTS, OR ANY COURSE OF CONDUCT, DEALING, 
ORAL OR WRITTEN) OR ACTIONS OR EITHER OF THEM. NEITHER
NOR LENDER SHALL SEEK ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN. WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED
TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY EITHER
BORROWER OR LENDER EXCEPT BY A WRITTEN 

BOTH 0F THEM.

10. JURISDICTION. AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT OR PROCEEDINGS INITIATED BY BORROWER- OR
LENDER ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY
OR ANY OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT
OR SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA.
. BORROWER AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN 
ADVANCE TO SUCH TURISDICTION IN ANY ACTION OR PROCEEDING
COIHIENCED BY BORROWER OR LENDER IN ANY OF SUCH COURTS, AND
EACH OF THEM HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS
AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND
THAT SERYICE OF SUCH SUMMONS AND COMPLAINT OR OTHER

- PROCESS OR PAPERS MAY RE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER OR LENDER THE ADDRESS TO WHICH
NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT. BORROWER
AND LENDER WAIVE ANY CLAIM THAT MARION COUNTY, OR THE
SOUTHERN DISTRICT OF. INDIANA IS AN INCONYENIENTFORUM OR AN
IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD BORROWER AND
LENDER, AFTER BEING SO SERVED, FAIL TO APPE ANSWER TO ANY
SERMONS, COMPLAINT, PROCESS, OR PAPERS SO SERVED WITHIN THE
. NTMBER OF DAYS PRESCREED BY LAW AFTER THE MAILING THEREOF,

BORROWER OR LENDER, AS APPROPRIATE, SHALL BE DEEMED IN DEFAULT
AND AN ORDER HDOMENT MAY BE ENTE SAINST BORE REE
OR LENDER, AS APPROPRIATE, AS DEMANDED, OR PRAYED FOR IN SUCH
SDMMONS, COMPLAINT, PROCESS, OR PAPERS. 

 

nty as of the date ?rst

WTTNESS WTIEREOF, Guarantor has executed this Guam
above written. . 

 
   

Gregory. .Pe ce

4754323

EXHIBIT 

CERTIFICATE REGARDING SOLVENCY

Gregory J. Pence, (the ?Guarantor?), makes the following representations to Home Federal

Savings Bank (the ?Lender?) and acknowledges that the Lender is entitled to rely and __Will rely
financial accommodations to KP Oil, Inc, an

upon these representations, in providing certain
Agreement dated of even date herewith, (the

Indiana corporation, pursuant to a. certain Loan
ccit?igreernent?). 

l. The assetsof the Guarantor at a ?fair valuation? within the meaning of the United
States Bankruptcy Code'of 1978, as amended (the ?Code?), exceed the liabilities of
?the Guarantor, including without limitation contingent liabilities to the extent
approPriatefor consideration in determining Whether the Guarantor is ?insolvent?,
within the meaning of the Code, but excluding the Guarantor?s contingent liability
under the Unconditional Unlimited Guaranty (the ?Guaranty?) required to be given

by the Guarantor under die terms of the Agreement.
2. The Guarantor is not insolvent within the meaning of the Code, after taking into
?account its contingent liability under the Guaranty. 

After taking into account its contingent liability under the Guaranty, the Guarantor
has suf?cient capital for the Operation of its business as presently conducted and at
the level of operations" contemplated for the foreseeable future. -

U.)

4- The Guarantor is currently paying its debts as they become due in the ordinary
course of its business. After taking into account its contingent liability under the
Guaranty, the Guarantor believes that it will be able to continue to pay itsvdebts as

they become due in the ordinary course of its business;

Dated: January, 12, 2001

{7

vi f/f) (VFW

Greg ry 3/ Pence

EXHIBIT 

. prosecute collectiOn, enforcement or other remedies against

UNCOMJITIONAL Guam-wry

THIS UNCONDITIONAL UNLMTED GUARANTY (this Guaranty") is dated as
of September 14, 2001, by GREGORY J. FENCE (?Guarantor?) for the ?bene?t of HOW

FEDERAL SAVINGS BANK 
w:

ipal amount of up to Nine Hundred Twelve

A. Lender has agreed to loan the princ
an Indiana

Thousand and 00/100 Dollars (the "Loan") to KP Oil, Inc,
corporation; ("Borrower"). 

B. A condition precedent to Lender?s extension of the Loan to Borrower is the
execution and delivery of (1) this Guaranty, (ii) that certain Mortgage Note of even date herewith
the Loan, and the other Loan

(the "Note") made by Borrower payable to Lender to evidence
Do'cuments (as defined in the Note). 

NOW, TEEREFORE, for good and valuable consideration, the receipt and suf?ciency-
of which hereby are acknowledged, Guarantor hereby agrees as follows: 

Guarantor hereby unconditionally and irrevocably

guarantees to Lender the punctual payment and performance when?. due, whether at stated
maturity or by acceleration or otherwise, (if the indebtedness and other obligations of Borrower.
to Lend evidenced by the Note and any other amounts that may become owing by Borrow7er
rmu the Loan Documents (such indebtedness, obligations and other amounts are hereinafter
referred'to as "Borrower?s Obligations")- Guarantor agrees that this Guaranty is a present and
continuing guaranty of payment and not of collectibility, and that Lender shall not. be required to
Borrower or any other guarantor of
Borrower's Obligations, or to enforce or resort to any collateral for the repayment-of Borrower?s
Obligations or other rights or remedies pertaining thereto, betel-e calling on Guarantor for
payment. Guarantor agrees that if for any reason Borrower shall fail or be unable to pay,
punctually and fully, any of Borrower?s Obligations, Guarantor shall pay such obligations to
Lender in full immediately upon demand. Guarantor agrees that One or more successive actions
may be brought against Guarantor, as often as Lender deems advisable, until all of Borrower's

Obligations are paid and performed in full,

1. Guaranty of Payment.

2. Representations and Warranties. The following shall constitute representations
and warranties of Guarantor and?Guarantor hereby acknowledges that Lender intends to make the

Loan in reliance thereon:

a. Guarantor is- not in default and no event has occurred that with the passage
of time and/ or the giving of notice or both will constitute a default under any agreement
to which Guarantor is a party, the effeCt of which will impair perfonnance by Guarantor

  

of his, her or its obligations under this Guaranty. Ne
this Guaranty nor compliance with the terms and 

applicable law, rule, regulation, judgment, decree or order, or will con?ict with or result

in any breach of any of the terms, covenants, conditions or provisions of any indenture,
mortgage, deed of trust, instrument, document, agreement or contract of any kind that
creates, represents, evidences or provides for any lien, charge or encumbrance upon any
of the prOperty or assets of Guarantor,__or any other ?indenture, mortgage, deed of trust,
instrument, document, agreement or contract of any kind to which Guarantor is a party or
to which Guarantor or the prOperty of Guarantor may be subject.

ither the execution and delivery of
rovisions hereof will Violate any

h. There is not any litigation, arbitration, governmental or administratiye
proceedings, actions, examinations, claims or demands pending, or to Guarantor?s
knowledge, threatened that could adversely affect performance by Guarantor of his, her
or its obligations under this Guaranty.

c. Neither this Guaranty nor any statement or certification as to facts 
previously furnished or required herein to be furnished to Lender by Guarantor, contains
any material inaccuracy or untruth inany representation, covenant or warranty or omits to

state a fact material to this Guaranty.

3. Continuing Guaranty. Guarantor agrees that the obligations of Guarantor,
pursuant to Section 1 above and any other provision of any of the Loan Documents shall be

primary obligations, shall not be subject to any counterclaim, set?off, abatement, deferment or

defense based upon any claim that GuarantOr may have against Lender, Borrower, any other
entity, md shad remain in full force

?darantor of Borrowers ligations or any other person or
arged or affected in any way by, any

5
and effect without regard to, and shall not be released, disch
knowledge thereof),



circumstance or condition (whether or not Guarantor shall have any
including without limitation:

a. any lack of validity or enforceability of any of the Loan Documents;

b. any termination, amendment, modification or other change in any of die
Loan Documents, including, without limitation, any modification of the interest rate(s)

described therein;

c. any furnishing, exchange, substitution or release of any collateral securing

repayment of the Lean, or any failure to perfect any lien in such collaterai;

d. any failure, omission or delay on the part of Borrower, Guarantor, any
other guarantor of Borrower?s Obligations or Lender to conform or comply with any term 
of any of the Loan Documents or any failure of Lender to giye notice of any Event of

Default (as defined in the Note);

MORTGAGE NOTE 

$912,000.00 September 14, 2001
Maturity Date: October 1, 2011 Indianapolis, Indiana

1. FOR VALUE RECEIVED, on or before October 1, 2011, KP OIL, INC., an
Indiana corporation, ("Maker") hereby promises to pay to the order of HOME FEDERAL
SAVINGS BANK, ("Lender"), the principal sum of Nine Hundred Twelve Thousand and
00/100 Dollars or such other principal amount as shall have been disbursed
hereunder pursuant to the terms and conditions of a certain Loan Agreement between Maker and
Lender of even date herewith (the ?Loan Agreement at the place and in the manner hereinafter
provided, together with interest thereon at the rate set forth herein. 

2. Loan Rate. Interest shall accrue on the balance of principal remaining from time
to time unpaid under this Note during each calendar month (whether fuller partial) prior to a
variable per annum rate equal to the ?Index? (as hereinafter de?ned) IRES. Two Hundred
Seventvaive (275) basis points, resulting in an initial rate of Seven and wenty-Eight
Hundredths Percent (the ?Initial Rate?). .The ?Index? shall be the Five Year US.
Treasury Constant Maturities Rate, as published in the weekly Federal Reserve Statistical Release
Form H.15 (519) (or if unavailable, a publication of similar standing and authority in the banking
industry, as determined in the reasonable discretion of Lender), and shall reset on the Reset Date.
The applicable interest rate, as reset from time to time in accordance with the Index, may be
hereinafter referred to as the ?Reset Rate.? On the Reset Date, the interest rate shall reset, and
interest shall accrue on the balance of principal then remaining outstanding under this Note
during each calendar month (whether full or partial) prior to October 1, 2011 (the ?Maturity
Date?), at a variable per annum rate equal to the Index, m?_us Two Hundred Seventy?Five (275)
basis points. The Index shall be the rate of interest in effect as of five (5) days prior to the date
hereof and forty??ve (45) days prior to the Reset Date. Interest shall be computed on the basis of
a year consisting of 360 days and based on the actual number of days during the period for which
interest is being charged. Terms not otherwise defined herein shall have the meanings ascribed

. to them in the Loan Agreement.
3 . Paments. Principal and interest under this Note shall be payable as follows:

Interest accruing between the date hereof and October 1, 2001 shall be
paid by Borrower on the date hereof, at Closing;

Commencing on November 1, 2001, and continuing on the ?rst day
of each succeeding month thereafter until and including October 1, 2006, (the ?Reset
Date?), Berrower shall make equal installments of principal and interest of
Seven Thousand Two Hundred Twenty?Four and 82/100 Dollars the
amount required to fully amortize "the principal balance of the Note over a term of two
hundred forty (240) months at the Initial Rate; 

 Commencing on the Reset Date, and continuing until the Maturity Date,
Borrower shall make equal installments of principal and interest in the amount
required to fully amortize the then outstanding principal balance based upon the then

applicable Reset Rate, and (ii) an amortization period of one hundred eighty (180)

months; and

The entire balance of principal and any accrued and unpaid interest
thereon shall be due and payable on the Maturity Date.

4. Application of Payments. All payments and prepayments (if any) on account of
the indebtedness evidenced by this Note shall be ?rst applied to fees, expenses, costs and other
similar amounts then due and payable to Lender, including, without limitation, any prepayment
premium or late charges due hereunder; second, to accrued and unpaid interest on the unpaid
principal balance of this Note; third, to the payment of principal, due in the month in which the
payment or prepayment is made; fourth, to any outstanding escrows; ?fth, to all other amounts
then due Lender hereunder or under any of the Loan Documents (as hereinafter defined); and
last, to the unpaid principal balance of this Note in the inverse order of maturity. Any
prepayment on account of the indebtedness evidenced by this Note shall not extend or postpone

the due date of any subsequent installment.

5. Default Rate. After maturity or the earlier acceleration of the indebtedness
evidenced by this Note, or if said indebtedness has not been accelerated, during any period in
which an Event of Default (as hereinafter de?ned) exists under this Note or any of the Loan
Documents, Maker shall pay interest on the balance of principal remaining unpaid during any
such period at an annual rate (the "Default Rate") equal to three percent (3 plus the Initial Rate
or Reset Rate, as applicable, then in effect under this Note. The interest accruing under this
paragraph shall be immediately due and payable by Maker to the holder of this Note and shall be
additional indebtedness evidenced by this Note.

6. Late Charge. In the event any payment of interest or principal due hereunder is
not made within ten (10) days after such payment is due in accordance with the terms hereof,
then, in addition to the payment of the ?amount so due, Maker shall pay to Lender a "late charge"
of ?ve cents for each whole dollar so overdue to defray part of the cost of collection and
handling such late payment. Maker agrees that the damages to be sustained by the holder hereof
for the detriment caused by any late payment are extremely dif?cult and impractical to ascertain,
and that the amount of ?ve cents for each one dollar due is a reasonable estimate of such

damages, does not constitute interest, and is not a penalty.

Prepa?nent. This Note may be prepaid, in part, in an amount not exceeding
?fteen percent (15 of the original loan amount during any Loan Year (the ?Permitted
Prepayment?). The ?rst Loan Year shall on the date hereof and end on the ?rst 
anniversary date hereof. The second through ?fth Loan Years shall end on the

second through the ?fth (5m) anniversary dates of the date hereof. Prepayment in excess
of the Permitted Prepayment during the ?rst three (3) Loan Years may be made subject,
however, to a prepayment fee of Three Percent (3 of the unamortized balance so prepaid.
Prepayment in excess of the Permitted Prepayment during the fourth (4m) and ?fth (5m) Loan
Years may be made subject to a prepayment fee of One Percent of the unamortized
balance so prepaid. Following the ?fth (5m) anniversary date hereof, the Loan evidenced
hereby may be prepaid in whole or in part without prepayment fee.

8. Method of Payments. All payments of principal and interest hereunder shall be
paid bycheck or in coin or currency which, at the time or times of payment, is the legal tender
for public and private debts in the United States of America and shall be made at such place as
Lender or the legal holder or holders of this Note may from time to time appoint, and in the
absence of such appointment, then at the of?ces of Lender, 501 Washington Street, PO. Box
408, Columbus, Indiana 472020408. Payment made by check shall be deemed paid on the date
Lender receives such check; provided, however, that if such check is subsequently returned to
Lender unpaid due to insuf?cient funds or otherwise, the payment shall not be deemed to have
been made and shall continue to bear interest until collected. If payment hereunder becomes due
and payable on a Saturday, Sunday or legal holiday under the laws of the State of Indiana, the
due date thereof shall be extended to the next succeeding Business Day (as defined in the Loan
Agreement), and interest shall be payable thereon at the then applicable interest rate during such

extension.

 

9. Security. This Note and any and all other liabilities and obligations and
indebtedness of Maker to Lender arising under the Loan, whether such liabilities, obligation or
indebtedness are now existing or hereafter created, direct or indirect, absolute or contingent, joint.
or several, due or to become due, howsoever created, arising or evidenced, and howsoever
acquired by lender, are secured by, among other things, the Mortgage (as de?ned in the Loan
Agreement) of even date herewith made by Maker to Lender creating a ?rst mortgage lien on
certain real property (the "Premises") legally described inExhibit attached to the Mortgage,
Unconditional Unlimited Guaranty of even date herewith from each of Kiel Bros. Oil Co., Inc,
Theodore C. Kiel and Gregory J. Pence (the "Guarantors," and each Unconditional Unlimited
Guaranty is hereafter referred to individually as a ?Guaranty? and collectively as the
"Guaranties") to Lender, and an Environmental Indemnity Agreement (the "Indemnity
Agreement of even date herewith from Maker and Guarantors to Lender (the Loan Agreement,
the Mortgage, the Guaranties, the Indemnity Agreement and any other document now or
hereafter given to evidence or secure payment of this Note, or delivered to induce Lender to
disburse the proceeds of the Loan, are hereinafter collectively referred to as the "Loan

Documents," as further de?ned in the Loan Agreement). Reference is hereby made to the Loan

Documents (which are incorporated herein by reference as fully, and with the same effect, as if

set forth herein at length) for a legal description of the Premises, a statement of the covenants and
agreements contained therein, a statement of the rights, remedies, and security afforded thereby,

and all matters therein contained.

 

10. Events of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default under this Note:

 

the failure by Maker to make payment of any installment of principal and
interest or any other amount due to Lender under this Note within five (5) days of its due
date, or under any of the other Loan Documents on the date when any such payment is
due, subject to applicable grace and cure periods, in accordance with the terms hereof or

thereof; or

the occurrence of any one or more of the "Events of Default" under the
Loan Agreement, Mortgage or any of the other Loan Documents.

11. Remedies. At the election of the holder hereof, and without notice, the principal
balance remaining unpaid under this Note, and all unpaid interest accrued thereon, shall be and
become immediately due and payable in full upon the occurrence of any Event of Default.
Failure to exercise this Option shall not constitute a waiver of the right to exercise same in the
event of any subsequent Event of Default. holder hereof shall, by any act of omission or
commission, be deemed to waive any of its rights, remedies or powers hereunder or otherwise
unless such waiver is in writing and signed by the holder hereof, and then only to the extent
speci?cally set forth therein. The rights, remedies and powers of the holder hereof, as provided
in this Note, the Loan Agreement, the Mortgage and in all of the other Loan Documents are
cumulative and concurrent, and may be pursued singly, successively or together against Maker,
the Guarantors, the Premises and any other security given at any tinie to secure the repayment
hereof, all at the sole discretion of the holder hereof. If any suit or action is instituted or

attorneys are employed to collect this Note or any part thereof, Maker promises and agrees to
pay all costs of collection, including attorneys? fees and court costs.

12. Covenants and Waivers. Maker and all others who now or may at any time
become liable fOr all or any part of the obligations evidenced hereby, expressly agree hereby to
be jointly and severally bound, and jointly and severally: waive and renounce any and all
homestead, redemption and exemption rights and the bene?t of all valuation and appraisement
laws and privileges against the indebtedness evidenced by this Note or by any extension or
renewal hereof; (ii) waive presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor, and notice of protest; waive any and all notices in connection
with the delivery and acceptance hereof and all other notices in connection with the performance,
default, or enforcement of the payment hereof or hereunder; (iv) waive any and all lack of
diligence and delays in the enforcement of the payment hereof; agree that the liability of each
Maker, guarantor, endorser or obligor shall be unconditional and without regard to the liability of
- any other person or entity for the payment hereof, and shall not in any manner be affected by any
indulgence or forbearance granted or consented to by Lender to any of them with respect hereto;
(vi) consent to any and all extensions of time, renewals, waivers, or modi?cations that may be
granted by Lender with reapect to the payment or other provisions hereof, and to the release of 
any security at any time given for the payment hereof, or any part'thereof, with or without

 

substitution, and to the release of any person or entity liable for the payment hereof; and (vii)
consent to the addition of any and all other makers, endorsers, guarantors, and other obligors for
the payment hereof, and to the acceptance of any and all other security for the payment hereof,
and agree that the addition of any such makers, endorsers, guarantors or other obligors, or
security shall not affect the liability of Maker, any guarantor and all others now liable for all or
any part of the obligations evidenced hereby.

13. Other General Agreements.

(3) Maker agrees that the obligation evidenced by this Note is an exempted
transaction under the Truth In Lending Act, 15 U.S.C., Section 1601, get 

Time is of the essence hereof.

 

This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the statutes, laws and
decisions of the State of Indiana. This Note may not be changed or amended orally but
only by an instrument in writing signed by the party against whom enforcement of the
change or amendment is sought.

Lender shall in no event be construed for any purpose to be a partner, joint
venturer, agent or associate of Maker or of any lessee, operator, concessionaire or
licensee of Maker in the conduct of its business, and by the execution of this Note, Maker
agrees to indemnify, defend, and hold Lender harmless from and against any and all
damages, costs, expenses and liability that may be incurred by Lender as a result of a
claim that Lender is such partner, joint venturer, agent or associate.

This Note has been delivered to Lender in Indianapolis, Indiana and all
funds disbursed to or for the bene?t of Maker will be disbursed in Indianapolis, Indiana.

In the event this Note is executed by more than one party, the obligations
and liabilities of each Maker under this Note shall be joint and several and shall be
binding upon and enforceable against each Maker and their respective successors and
assigns. This Note shall inure to the bene?t of and may be enforced by Lender and its

successors and assigns.

In the event that any provision of this Note is deemed to be invalid by
reason of the Operation of law, or by reason of the interpretation placed thereon by any
administrative agency or any court, Maker and Lender shall negotiate an equitable
adjustment in the provisions of the same in order to effect, to the maximum extent
permitted by law, the purpose of this Note and the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected thereby

and shall remain in full force and effect. -

 

 

 The amount of principal outstanding under the terms of this Note shall be
determined by reference .to the books and records of Lender, which shall be deemed
rima facie to be correct with respect thereto absent manifest error.

14. WAIVER OF JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS NOTE ANY OF THE LOAN
DOCUMENTS, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER
BORROWER LENDER SHALL SEEK TO- CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY

TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER BORROWER OR LENDER EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY BOTH OF THEM.

15. JURISDICTION AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS NOTE OR ANY
OF THE LOAN DOCUNIENTS SHALL BE LITIGATED IN THE CIRCUIT OR
SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTIDERN DISTRICT OF INDIANA. BORROWER
AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO
SUCH .IURISDICTION IN ANY ACTION OR PROCEEDING CONIMENCED BY
BORROWER LENDER IN ANY OF SUCH COURTS, AND EACH OF THEM
HEREBY WAIVES PERSONAL SERVICE OF THE SUMIVIONS AND COMPLAINT,
OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT
SERVICE OF SUCH SUNIIVIONS AND COMPLAINT OR OTHER PROCESS OR
PAPERS NIAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO
BORROWER OR LENDER AT THE ADDRESS TO WHICH NOTICES ARE TO BE
SENT PURSUANT TO THIS AGREEMENT. BORROWER AND LENDER WAIVE
ANY CLAIM THAT MARION COUNTY, INDIANA OR THE SOUTHERN DISTRICT
OF INDIANA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED
ON LACK OF VENUE. SHOULD BORROWER OR LENDER, AFTER BEING SO
SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT,
PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED
BY LAW AFTER THE MAILING THEREOF, BORROWER OR LENDER, AS
APPROPRIATE, SHALL BE DEEMED IN DEFAULT AND AN ORDER 
JUDGMENT MAY BE ENTERED AGAINST BORROWER OR LENDER, AS

 

APPROPRIATE, AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS,
COMPLAINT, PROCESS OR PAPERS. 

IN WITNESS WHEREOF, Maker has executed this ote as of the day and year ?rst
written above.

. BORROWER

KP OIL, Inc., an Indiana Corporation

Bye/147:9

Gregory Pence, President

501359_1

 

 

Locke Reynolds LLP
201 North Illinois Street, Suite 1000

 

PO. 
?q Indianapolis, IN 46244?0961
Lad) Overnight deliveries use zip code 46204
317?237-3 874 317?237?3800
jboldr@locke.com F3X3l7-33f-3900
July 30, 2004
VIA OVERNIGHT MAIL
Ref: 89231134 Date: 07130120214 SHIPPING: 11.25
Mr. Gregory Pence Dep: Jeffrey Boldt ugt: 1 .e LBS SPECIRLSout utZ DING DV: ace TOTRL: 12.09
C01 b118, 47201 Svcs: OVERNIGHT

TRCK: 6486 8851 0570

Re: KP Oil and Kiel Bros. Oil
Our File No. 8923-134

Gentlemen:

We represent HomeFederal Bank. As you may recall, at the time KP Oil, Inc. executed
loan documents in favor of HomeFederal, you executed an Unlimited Unconditional Guaranty in
favor of HomeFederal, which Guaranty secures the. indebtedness of KP Oil to HomeFederal.

In light of the bankruptcies of KP Oil and Kiel Bros. Oil and the request-by these
companies to suspend the required payments on KP Oil's indebtedness, we asked you to
make the payments to HomeFederal as?they became due. To date, you have not
complied with our request.

This letter shall serve as your notice to you that HomeFederal Bank has accelerated the
entire balance of your obligation under your guaranty. As of August 1, 2004, the total amount.
you owe under the three (3) Notes you have guaranteed is not less than Sixteen MillionTen?
Thousand Four Hundred Thirty Seven and 03/100 Dollars This amount is 
broken down as follows:

 

Note 1 Note 2 Note 3

Principal: $13,773,186.90 Principal: $1,178,853.03 Principal: $853,441.03
Interest: $168,993.87 Interest: $14,953.06 Interest: $10,502.05
Escrow: $4,642.24 Late Fee: $504.82 Late Fee: $361.24

Late Fee: $5,988.17 Total Note 2: $1,194,320.91 Total Note 3: $863,304.32

Total Note 1: $13,952,811.80

    

EXHIBIT

4L

    

locks. com

Piease do not hesitate to contact the undersigned if you have any questions regarding this

matter.
Sincerely,
LOCKE REYNOLDS LLP

Jeffrey M. Boldt
JMB 

6?1636_i

 

IN THE MARION SUPERIOR COURT OF INDIANA

HOMEFEDERAL BANK, CAUSE NO. 

Plaintiff, 

v. 

GREGORY J. PENCE, 

Defendant. 

AFFIDAVIT OF FEES

1, Jeffrey M. Boldt, af?rm the truth of the following representations:

1. I am an adult of sound mind, competent to testify to the matters asserted in this
Af?davit.

2. All facts asserted in this Af?davit are within my personal knowledge.

3. I am an associate at the Indianapolis law ?rm Locke Reynolds LLP (?Locke
Reynolds?).

4. Locke Reynolds represents HomeFederal Bank in its dispute with Gregory J.

Pence in the above captioned action.

5. My current rate regarding this matter is $220 per hour.

6. As of August 10, 2005, I have spent 1.5 hours at $170 per hour for a fee of $255
on this matter.

7. Further, as of August 10, 2005, have spent 12.5 hours at $220 per hour for a fee
of $2,750 on this matter.

8. We anticipate spending approximately 16 additional hours of time on this matter,
with anticipated additional fees totaling $3,520.

9. Attorneys? fees consist of both the attorneys? hourly expense and disbursements.

EXHIBIT

i

 

10. Disbursements total $22.58.

11. Locke Reynolds? attorneys? fees on this matter total $6,547.58.

I AFFIRM UNDER THE PENALTIES OF PERJURY THAT THE FOREGOING
REPRESENTATIONS ARE TRUE.

Dated: August 2005.



Jeffrey M. Boldt I
731532_1

release, settlement or extension of time of

e. any waiver, compromise,
bligations or agreements contained

payment or performance or observance the Loan Documents;

der under or in respect of any of the Loan
delay on the part of Lender to
nit in any of the Loan

f. any action or inaction by Len
Documents, any failure, lack of diligence, omission or
enforce, assert or exercise any right, power or remedy conferred 0
Documents, or any other action or inaction on the part of Lender;

g. any voluntary or mvoluntary bankruptcy, insolvency, reorganization,
arrangement, readjustment, assignment for the benefit of creditors, composition,
receivership, liquidation, marshalling of assets and liabilities or similar events or
proceedings with respect to Borrower, Guarantor or any other guarantor of Borrower's
Obligations, as applicable, or any of their reSpective property or any action
taken by any trustee or receiver or by any court in any such proceeding; 

ation of Borrower into or with any entity, or any

11. any merger or consolid
guarantor

sale, lease or transfer of any of the assets of Borrower, Guarantor or any other

of Borrower?s Obligations to any oth?f. Person or entity;
i. any change in the ownership of Borrower or any change in the relationship
between Borrower, Guarantor or any other guarantor of Borrower?s Obligations, or any

termination of any such relationship;

or? elease or discharge by operation of law of Borrower or any other

J. - (LU.
guarantor of Borrower?s Obligations from any obligation or agreement contained in any

. of the Loan Documents; or

occurrence, circumstance, happening or event, whether similar

. it. any othe
or dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might
ischarge of the liabilities of a guarantor or

constitute a legal or equitable ?defense or 
surety or which otherwise might limit recourse against Borrower or Guarantor.

4. Waivers. Guarantor unconditionally waives (1) notice of any of the matters
referred to in Scott 3 above, {ii} all notices which may be reguired by statute, rule of law or
otherwise, now or hereafter in effect, to preserve intact any rights against Guarantor, including,
without limitation, any demand, presentment and protest, proof of notice of nonpayment under
any of the Loan Documents'and noticeof any Event or" Default or any failure on the part of
Borrower, Guarantor or any other guarantor Of Borrower?s Obligations to perform or comply
- with any covenant, agreement, term or condition of any of the'Loan Documents, any right to

the enforcement, assertion or exercise against Borrower, Guarantor or any other guarantor of

onferred under any of the Loan Documents, (iv)
entity, to the fullest extent permitted
in this Guaranty or the other Loan

Borrower?s Obligations of any right or remedy 
any requirement of diligence on the part of any person or
_by law and except as otherwise expressly provided

Documents, any claims based on allegations that Lender has failed to act in a commercially
reasonable manner, (vi) any requirement to exhaust any remedies or to mitigate the damages
resulting from any default under any of the Loan Documents, and (vii) any notice of any sale,
- transfer or other disposition of any right, title or interest of Lender under any of the Loan

Documents.
and all present and future debts and

to the claims of Lender and hereby
Obligations and Guarantor?s

Subordination. Guarantor agrees that any
obligations of Borrower to Guarantor hereby are subordinate
are assigned by Guarantor to Lender as security for Borrower

obligations under this Guaranty.

Notwithstanding any payment or performance by
Guarantor shall not be entitled to be subrogated to any
other guarantor of Borrower?s Obligations, and
claims to indemni?cation, reimbursement and

6. Subrogation Waiver,
Guarantor pursuant to this Guaranty,
rights of Lender against Borrower or any

Guarantor waives and releases all rights and
Contribution Guarantor now has," or at any time hereafter may have, against Borrower or .
Borrower?s estate until Borrower's Obligations are paid in full and 'all periods under applicable
banlctuptcy law for the contest of any payment by Guarantor or Borrower as 'a preferential or 
fraudulent payment have expired- Any claim Guarantor may otherwise have against Borrower or
any other'guarantor of Borrower?s Obligations arising from payments made pursuant to any of?
the Loan Documents in all respects shall be subordinate to the full and complete payment or
*1 rformance and discharge of Borrower?s Obligations under this Gunauty ma Guarantor?s

Lie}.

obligations under this Guaranty, and no such payment shall give riseto any claim against Lender.
Unless and until Borrower?s Obligations and Guarantor?s obligations under this Guaranty have

been paid and performed in full, Guarantor will. not assign or otherwise transfer any such claim

to any other person or entity.

7. Reinstatement. The obligations of Guarantor pursuant to this Guaranty shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of any of Borrower?s Obligaticuis or Guarantor?s obligations under this Guaranty is rescinded or
otherwise must be restored or returned by Lender upon the insolvency, 'bankrIthcy, dissolution,
liquidation or reorganization of Guarantor or Borrower or otherwise, all as though such payment

had not been made.

8. . Financial Statements. Guarantor hereby represents and warrants to Lender that
all of the ?nancial statements of Guarantor previously submitted to Lender are true, complete
and correct in all material respects, disclose all actual and contingent liabilities, and fairly present
the ?nancial condition of Guarantor, and do not contain any untrue statement of a material fact or
omit to state a fact material to the ?nancial statements submitted or this Guaranty and no 

 material adverse change has occurred in the financial statements from the dates thereof until the
date hereof. Guarantor shall furnish to Lender annual ?nancial statements for each calendar year

no later than ninety (90) days after the end of such years in a form substantially similar to the
form of ?nancial statements previously submitted by Guarantor to Lender. Within ten (10) days
of tiling, Guarantor shall furnish Lender copies of federal tax returns. 80 long as this guaranty
remains in effect, Guarantor shall provide Lender a ?Certi?cate of Solvency? in the form

attached as Exhibit 

9. Successors and Assig. This Guaranty shall inure to the benefit of Lender and
This Guaranty shall be binding on Guarantor and the heirs,vlegatees,

 

its successors and assigns-
successors and assigns of Guarantor.

10. No Waiver of Rights. delay or failure on the part of Lender to exercise any
right, power or privilege under this Guaranty or any of the other Loan Documents shall operate
as a waiver thereof, and no single or partial exercise of any right, power or privilege shall
preclude any other or further exercise thereofor the exercise of any other power or right, or be.

deemed to establish a c'ustorn'or course of dealing or performance between the parties hereto.
The rights and remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law. No notice to, or demand on, Guarantor in any case shall entitle

Guarantor to any other or further notice or demand in the same, similar or other circumstance.
11. Modi?cation. The terms of this Guaranty may be waived, discharged, or

terminated only by an instrument in Writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment, modification, Waiver or
other change of my of the terms of this Guaranty shall be effective without the prior written

consent of Lender. 

12. Joinder. Guarantor agrees that any action to enforce this Guaranty may be
brought against Guarantor without any reimbursement or joinder of Berrower or any other
guarantor of Borrower?s Obligations in such action.

13. Severability. In the event that any provision of this Guarantyqis deemed to be
invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any 
administrative agency or any court, Guarantor and Lender shall negotiate an equitable adjustment
in the provisions of the sanie in order to effect, to the maxirhum extent permitted by law, the
purpose or this Guaranty and the validity and e?orceab?ility of the remairnng provisions, or
portions or applications thereof, shall not he affected thereby and shall remain in full force and
effect.

14. Applicable Law. This Guaranty shall?be governed as to validity, interpretation,
effect and in all other reSpeCts by laws and decisions of the State of Indiana- -

 

15. Notice- All notices, communications and waivers under this Guaranty shall be in
writing and shall be'(i) delivered in person or (ii) mailed, postage prepaid, either by registered or
certi?ed mail, return receipt requested, or by overnight express ca 'er, addressed in each

case as follows:

To Lender: - Horne Federal Savings Bank
501 Washington Street
P- O. Box 408
Columbus, Indiana 47202?0408
Attn: John F. Schilling 
Telephone: (812) 3784840
Facsimile: (812) 3784663

With-copy'to; Locke Reynolds LLP .
201 Nerth Street, Suite 1000 
P.O. BOX 44961 
Indianapolis, Indiana 462440961
Attn: Rex 
. . Telephone: (317) 23753896
Facsimile: (317-) 2373900

To Guarantor: Gregory Pence
3801 Tnpelo Drive

PO. Box 344 
Columbus,lndiana 472020344

With copy to: Baker 8: Daniels
300 North Meridian Street
Indianapolis, Indiana 46204
Attn: Joseph M. Scirnia
Telephone: (317) 5694680 .
Facsimile: (317) 569?4800

hereto, as such party shall designate in a written
pursuant tothe terms of this Section 15 shall be
irnile with receipt of .deliVery, then on the

or to any other address as to any of the parties
notice to the other party hereto- All notices sent
deemed received if personally delivered, or by facs

date of dehyery, (ii) if sent by overnight, express carrier, then on the next federal banking day
immediately following the day sent, or if sent by registered or eerti?ed mail, then on the
earlier of the third federal banking day following the day sent or when aemally received.

10. WAIVER .OF JURY TREAL- AND LENDER, AFTER
CONSULTING OR HAVING HAD: THE OPPORTUNITY TO CONSULT WITH

 

COUNSEL HNOWGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF
THE TRANSACTIONS CONTEMPLATED BY THIS GUARANTY OR ANY OF THE
- LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, DEALING, 
(WHETHER ORAL OR WRITTEN) OR ACTIONS OR EITHER OF THEM. NEITHER
NOR LENDER SHALL SEEK ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEIVIED
TO HAVE BEEN MODIFIED IN ANY RESPECT BY EITHER
BORROWER OR LENDER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY

BOTH OF THEM

Io. JURISDICTION AND RENIE BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS OR PROCEEDINGS INTTIATED BE BORROWER OR
LENDER AND ARISING, DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY
OR ANY OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT
OR SUPERIOR OE MARION COUNTY, INDIANA, OR THE UNITED
STATES DISTRICT- COURT- FOR THE SOUTHERN DISTRICT OF INDIANA.
AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN

ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING

COMMENCED BY OR LENDER IN ANY OF COURTS, AND
SERVICE OR THE SUMMONS

EACH OF THEM HEREBY WAIVES PERSONAL
THEREIN, AND

AND. COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUE
?mm? AND OR OTHER

AGREES TRAT SERVICE OR SODA
PROCESSOR. PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER OR LENDER AT THE ADDRESS TO WHICH
NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT. BORROWER
AND LENDER WAIVE ANY CLAIM THAT MARION COUNTY, INDIANA, OR THE
SOUTHERN DISTRICT OF INDIANA IS AN INCONVENIENT FORUM OR AN
IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD BORROWER AND
LENDER, AETER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY
SUMMONS, COMP-LA -, PROCESS, OR PAPERS SERVED WITHIN TTIE
NUMBER OE DAYS PRESCRIBED BY LAW ABTER THE MAILING THEREOF,
BALL BE DEEMED IN DEFAULT

BORROWER OR LENDER, AS APPROPRIATE, 
MIENT NIAY BE AGAINST BORROWER

AND AN ORDER ANDIOR JUDG
OR LENDER, AS APPROPRIATE, AS REMANDED, OR PRAYER ROR IN SUCE
COMPLAINT, PROCESS, OR PAPERS.



 LN EVITNESS WHEREOF, Guarantor has executed this Guaxanty as of the date ?rst
above written.

      

Gregory 1.. Ce -

301315_1

 

STATE OF INDLANA 

COUNTY OF MARION 



said County and State, personally appeared

Before me, a Notary Public, in and for
knowledged the execution of the

Gregory J. Pence, who after having been duly sworn, 21C
foregoing Unconditional Unlimited Guaranty.

to or, 2001.

   

WITNESS my hand and Notarial Seal this 1/ of Sep

  

REX E. gamer? .
STATE OF INDIANA . . Now

RESIDENT 0F JOHNSON camera-r

my COMMISSION EXPIRES: JAN. 26, 2003

 

Notary Poblic Printed

My Commission Expires: 'My County of Residence;



 

 

EXHIBIT 

CERTIFICATE REGARDING SOLVENCY

- Gregory J. Pence, (the ?Gnarantor?), makes the following representations to Home Federal
Savings Bank (the ?Lender?) and acknowledges that the Lender is entitled to rely and will rely?
npon these representations, in providing certain ?nancial accommodations to KP Oil, he, an
Indiana corporation, pursuant to a certain Loan Agreement dated of even date herewith, (the

?Agreement?).

1. The assets of the Guarantor at a ?fair valuation? Within the meaning of the United
. States BankIUptcy Code of 1978, as amended (the ?Code?), exceed the liabilities of
the Guarantor, Without limitation contingent liabilities to. the extent
appropriate for consideration in determining whether the Guarantor is ?insolvent?,
within the meaning of the Code, but excluding the Guarantor?s contingent liability
under the Unconditional Unlimited Guaranty (the to be given
by the Guarantor under the terms of the Agreement

 

2. . The Guarantor is not insolvent?within the meaning of the Code, after taking into 
account its contingent liability under the Guaranty.

3. After taking into account its contingent liability under the Guaranty, the Guarantor
has suf?cient capital for the operation of its business as presently conducted and at
the leyei of operations contemplated for the foreseeable future- 

.4. The Gharantor is currently paying its debts as they become due in the ordinary
coursie of its business. After taking into account its contingent-liability Under the
Guaranty, the Guarantor believes that it will be able to continue to pay its debts as

they become due in the ordinary course of its business.

Dated: September 14, 2001

 

.r/Ab' a
I 

10

 

EXHIBIT 

 

- MORTGAGE NOTE

$5,000,000.00 January 12, 2001
Maturity Date: February 1, 2011 Indianapolis, Indiana

. 1. FOR VALUE RECEIVED, on or before February 1, 2011, KP OIL, INC, an
Indiana cerporation, ("Maker") hereby promises to pay to the order of HOME FEDERAL
SAVINGS BANK, ("Lender"), the principal sum of Fifteen Million and 00! 100 Dollars
or such other principal amount as shall have been disbursed hereunder -
pursuant to the terms and conditions of a certain Loan Agreement between Maker and Lender of
even date herewith (the "Loan Agreement at the place and in the manner hereinafter provided,
together with interest thereon at the rate set forth herein.

2. . Loan Rate. Interest shall accrue on the balance of principal remaining from time
to time unpaid under this Note during each calendar month (whether full or partial) prior to a
variable per annum rate equal to the ?Index? (as hereinafter defined) pins Two Hundred Eighty?
Seven and One?Half (287.5) basis points, resulting in an initial rate of Seven and Six Hundred
Seventy?Five Percent (7.675 (the ?Initial Rate?). The ?Index? shall be the Five
Year Treasury Constant Maturities Rate, as published in the weekly Federal Reserve
Statistical Release Form H15 (519) (or if unavailable, a publication of similar purpose and
authority in the banking industry, as determined in the reasonable discretion of Lender), and shall
reset on the Reset Date. The applicable interest .rate, as reset from time to time in accordance
with the Index, may be hereinafter referred to as the ?Reset Rate.? 'On the Reset Date, the
interest rate shall?reset, and interest shall accrue on the balance of principal then remaining
outstanding under this Note during each calendar month (whether full or partial) prior to
February 1, 2011 (the ?Maturity Date?), at a variable per annum rate equal to the Index, pins
Two Hundred Eighty?Seven and One Half (287.5) basis points; provided, however, that the Reset
Rate shall never be less than Six and Six Hundred Seventy?Five Percent (6.675 
The Index shall be the rate of interest in effectlas? of ?ve (5) days prior to the date hereof and
forty?five (45) days prior to the Reset Date. Interest shall be computed on the basis of a year
consisting of 360 days and based on the actual number of days during the period for. which .
interest is being charged. Terms not otherwise de?ned herein shall have the meanings ascribed
to them in the Loan Agreement.

3. Faments. Principal and interest under this Note shall be payable as follows:

Interest accruing between the date hereof and February 1, 2001 shall be- -
paid by Borrower on the date hereof, at Closing;

Commencing on March 1, 2001, and continuing on the first day of
each succeeding month thereafter until February 1, 2006, (the ?Reset Date Borrower

shall make equal installments of principal and interest in the amount required
to fully amortize the principal balance of the Note over a term of two hundred forty

 

(240) months at the Initial Rate;

Commencing on the Reset Date, and continuing until the Maturity Date,
Borrower shall make equal installments of principal and interest in the amount
required to fully amortize the then outstanding principal balance based upon the then
applicable Reset Rate, and (ii) an amortization period of one hundred eighty (180)

munths; and

The entire balance of principal and any accrued and unpaid interest
thereon shall be due and payable on the Maturity Date. -

4. Application of Payments. All payments and prepayments (if any) on account of
. the indebtedness evidenced by this Note shall be first applied to fees, expenses, costs and other
similar amounts then due and payable?to Lender, including, without limitation any prepayment
premium or late charges due hereunder; second, to accrued and unpaid interest on the unpaid
principal balance of this Note; third, to the payment of principal, due in the month in which the
payment or prepayment is made; fourth, to any outstanding escrows; fifth, to all other amounts
then due Lender hereunder or under any of the Loan D0curnents (as hereinafter defined); and
last, to the unpaid principal balance of this Note in the inverse order of maturity. Any
prepayment on account of the indebtedness evidenced by this Note shall. not extend or postpone
the due date of any Subsequent installment. . -

5. Default Rate. After maturity or the earlier acceleration of the indebtedness
evidenced by this Note, or if said indebtedness has not been accelerated, during any period in
which an Event of Default (as hereinafter defined) exists under this Note or any of the Loan
Documents, Maker shall pay interest on the balance of principal remaining unpaid during any
such period at an annual rate (the "Default Rate?) equal to three percent plus the Initial Rate
or Reset Rate, as applicable, then in effect under this Note. The interest accruing under this
paragraph shall be immediately due and payable by Maker to the holder of this Note and shall be
additional indebtedness evidenced by this Note. I

6. Late Charge. In the event any payment of interest or principal due hereunder is
not made within five (5) days after such payment is due in accordance with the terms hereof,
then, in addition to the payment of the amount so due, Maker shall pay to'Lender a "late charge"
of ?ve cents for each whole dollar so overdue to defray part of the cost of collection and
handling such late payment. Maker agrees that the damages to be sustained by the holder hereof
for the detriment caused by any late payment are extremely dif?cult and impractical to ascertain,
and that the arnciunt of ?ve cents for each one dollar due is a reasonable estimate of such

damages, does not constitute interest, and is not a penalty.

7. Prepament. This Note may be prepaid, in part, in anarnount not exceeding
fifteen percent of the original loan amount during any - Loan Year (the ?Permitted
Prepayment?). The ?rst-Loan Year shall commence on the date hereof and end on the first 

 

 

anniversary date hereof. The second through ?fth Loan Years shall end on the
second through the ?fth (5m) anniversary dates of the date hereof. Prepayment in excess
of the Permitted Prepayment during the ?rst three (3) Loan Years may be made subject,
however, to a prepayment fee of Three Percent (3 of the unamortized balance so prepaid.
Prepayment in excess of the Permitted Prepayment during the fourth (4m) and ?fth Loan
Years may be made subject to a prepayment fee of One Percent of the enamortized
balance so prepaid. Following the ?fth (5m) anniversary date hereof, the Loan evidenced
hereby may be prepaid in whole or in part without prepayment fee.

8. Method of Payments. All payments of principal and interest hereunder shall be
paid by check Or in coin or currency which, at the time or times of payment, is the legal tender
for public and private debts in the United States of America and shall be made at such place as
Lender or the legal holder or holders of this Note may from time to time appoint, and in the
absence of such appointment, then at the of?ces of Lender, 501 Washington Street, PO. Box
408, Columbus, Indiana 47202?0408. Payment made by check shall be deemed paid on the date
Lender receives such check; provided, however, that if such check is subsequently returned to
Lender unpaid due to insuf?cient funds or otherwise, the payment shall not be deemed to have
been made and shall continue to bear interest until collected. If payment hereunder becomes due
and payable on a Saturday, Sunday or legal holiday under the laws of the State of Indiana, the
due date thereof shall .be extended to the next succeeding Business Day (as de?ned in the Loan
Agreement), and interest shall be payable thereon at the then applicable interest rate during such

extension.

 

9. Securig. This Note and any and all other liabilities and obligations and
indebtedness of Maker to Lender arising under the Loan, Whether such liabilities, obligation or
indebtedness are nowexisting or hereafter created, direct or indirect, absolute or contingent, joint
or several, due or to become due, howsoever created, arising or evidenced, and howsoever
acquired by Lender, are secured by, among other things, the Mortgages (as de?ned in the Loan
Agreement) of even date herewith made by Maker to Lender creating a ?rst mortgage lien on
certain real property, (the "Premises") legally described in Exhibit attached to the
Mortgages, Unconditional Unlimited Guaranty of even date herewith from each of Kiel Bros. Oil 
Inc., Theodore C. Kiel and Gregory J. Pence (the "Guarantors," and each Unconditional
Unlimited Guaranty is hereafter referred to individually as a ?Guaranty? and collectively as the
"Guaranties") to Lender, and an Environmental Indemnity Agreement (the ?Indemnity
Agreement") of even date herewith from Maker and Guarantors to Lender (the Mortgage, the
Guaranties, the indemnity Agreement and any other document now or hereafter given to evidence
or secure payment of ?this Note, or delivered to induce Lender to disburse the proceeds of the
Loan, are hereinafter collectively referred to as the "Loan?Documents," as further de?ned in the
Loan Agreement). Reference- is hereby made to the Loan Documents (which are incorporated
herein by reference as fully, and with the same effect, as if set forth herein at length) for a legal
description of the Premises, a statement of the covenants and agreements contained therein, a
statement of the rights, remedies, and security afforded thereby, and all matters therein

contained.

 

10. Events of Default. The occurrence of any one or more of the following events
shall constitute an Event of Default? under this Note:

. the failure by Maker to make payment of any installment of principal and
interest or any other amount due to Lender under this Note within five (5) days of its due
date, or under any of the other Loan Documents on the date when any such payment is
due, subject to applicable grace and cure periods, in accordance with the terms hereof or

thereof; or

the occurrence of any one or more of the "Events of Default" under the
Loan Agreement, Mortgage or any of the other Loan Docurnents. 

11 . Remedies. . At the election of the holder hereof, and without notice, the principal
balance remaining unpaid under this Note, and all unpaid interest accrued thereon, shall be and
become immediately due and payable in full upon the occurrence of any Event of Default.
Failure to exercise this Option shall not constitute a waiver of the right to exercise same in the
event of any subsequent Event of Default. No holder hereof shall, by any act of omissionvor
commission, be deemed to waive any of its rights, remedies or powers hereunder or otherwise
unless such waiver is in writing and signed by the holder hereof, and then only to the extent
speci?cally set forth therein. The rights,'remedies and powers of the holder hereof, as provided
in this Note, the Loan Agreement, the Mortgage and in all of the other Loan Documents are
cmnulative and concurrent, and may be pursued singly, successively or together against Maker,
the Guarantors, the Premises and any other security given at any time to secure the repayment
hereof, all at the sole discretion of the holder hereof. If any suit or action is instituted or
attorneys are employed to collect this Note or any part thereof, Maker promises and agrees to
pay all costs of collection, including attorneys? fees and court costs.

12. Covenants and Waivers. Maker and all others who now or may at any time
become liable for-all or any part of the obligations evidenced hereby, capressly agree hereby to
be jointly and severally bound, and jointly and severally: Cr) waive and renounce any and all
homestead, redemption and exemption rights and the bene?t of all valuation and appraisement
laws and privileges against the indebtedness evidenced by this Note or by any extension or
renewal hereof; (ii) waive presentment and demand for payment, netices of nonpayment and of
dishonor, protest of dishonor, and notice of protest; waive any and al notices in connection
with the delivery and acceptance hereof and all other notices in connection with the performance,
default, or enforcement of the payment hereof or hereunder; (iv) waive any and all lack of
diligence and delays in the enforcement of the payment hereof; agree that the liability of each
Maker, guarantor, endorser or obligor shall be unconditional and without regard to the liability of
any other person or entity fer the payment hereof, and shall not in any manner be affected by any
indulgence or forbearance granted or consented to by Leader to any of them with respect hereto;
(vi) consent to any and all extensions of time, renewals, waivers, or modifications that may be
granted by Lender with respect to the payment or other provisions hereof, and to the release of

 

 

 

any security at any time given for the payment hereof, or any part thereof, With or without
substitution, and to the release of any person or entity liable for the payment hereof; and (vii)
consent to the addition of any and all other makers, endorsers, guarantors, and other obligors for
the payment hereof, and to the acceptance of any and all other security for the payment hereof,
and agree that the addition of any such makers, endorsers, guarantors or other obligors, or
security shall not affect the liability of Maker, any guarantor and all others now liable for all or
any part of the obligations evidenced hereby. 

.13. Other General Agreements.

(3) Maker agrees that the obligation evidenced by this Note is an exempted
transaction under the Truth In Lending Act, 15 U.S.C.., Section 1601, e: sgq.

Time is of the essence hereof.

This Note is governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the statutes, laws and
decisions of the State of Indiana. This Note may not be changed or amended orally but
only by an instrument in writing signed by the party against whom enforcement of the
change or amendment is sought.- 

Lender shall in no event be construed for any purpose to be a partner, joint
venturer, agent or associate of Maker or of any lessee, operator, concessionaire or
licensee of Maker in the conduct of its business, and by the execution of this. Note, Maker
agrees to indemnify, defend, and hold'Lender harmless from and against any and all
damages, costs, expenses and liability that may be incurred by Lender as a result of a
claim that Lender is such partner, joint venturer, agent or associate.

This Note has been delivered to Lender in Indianapolis, Indiana and all
funds disbursed to or for the bene?t of Maker will be disbursed in Indianapolis Indiana.

In the event this Note is executed by more than one party, the obligations
and liabilities of each Maker under this Note shall be joint and several and shall be
binding upon and enforceable against each Maker and their respective successors and
assigns. This Note shall inure to the bene?t of and may be enforced by Lender and its 

successors and assigns.

In the event that any provision of this Note is deemed to be invalid by
reason of the operation of law, or by reason of the interpretation placed thereon by any
administrative agency or any court, Maker, and Lender shall negotiate an equitable
adjustment in the provisions of the same in order to effect, to the maximum extent
permitted by law, the purpose of this Note and the validity and enforceability of the

 

remaining provisions, or portions or applications thereof, shall not be affected thereby
and shall remain in full force and effect.

The amount of principal outstanding under the terms of this Note shall be
determined by reference to the books and records of Lender, which shall be deemed

prima facie to be correct With respect thereto absent manifest 

14. WAIVER OF. JURY TRIAL. BORROWER AND LENDER, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT EITHER OF THEM MAY HAVE To A TRIAL BY A JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS NOTE OR ANY OF THE LOAN
DOCUMENTS, OR ANY COURSE .OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER
BORROWER NOR LENDER . SHALL SEEK To BY
COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER BORROWER OR LENDER EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY BOTH OF THEM. 

15. JURISDICTION AND VENUE. BORROWER AND LENDER HEREBY
AGREE THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY BORROWER OR
LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS NOTE OR ANY
OF THE LOAN DOCUMENTS SHALL BE LITIGATED IN THE CIRCUIT OR
SUPERIOR COURT OF MARION COUNTY, INDIANA, OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA. BORROWER
AND LENDER HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY
BORROWER 0R LENDER IN ANY OF SUCH COURTS, AND EACH OF THEM
HEREBY WAIVES PERSONAL SERVICE OF AND COMPLAINT,
OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT
SERVICE OF SUCH SUWONS AND CONIPLAINT OR OTHER PROCESS OR
PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED ADDRESSED TO
BORROWER 0R LENDER AT THE WHICH NOTICES ARE TO BE
SENT PURSUANT TO THIS AGREEMENT. BORROWER AND LENDER WAIVE
ANY CLAIM THAT MARION COUNTY, INDIANA OR THE SOUTHERN DISTRICT
OF INDIANA IS AN INCONVENIENT FORUIVI OR AN IWROPER FORUM BASED
ON LACK OF VENUE. SHOULD BORROWER OR LENDER, AFTER BEING SO
SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUIVIIVIONS, 
PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED
BY LAW AFTER THE MAILING THEREOF, OR LENDER, AS

 

APPROPRIATE, SHALL BE DEEMED IN DEFAULT AND AN ORDER ANDXOR
JUDGMENT MAY BE ENTERED AGAINST BORROWER OR LENDER, AS
AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS,
COMPLAINT, PROCESS OR PAPERS.

IN WITNESS WHEREOF, Maker has executed this Note as of the day and year ?rst
written above.



KP OIL, Ino, an Indiana Corporation

By: #47 IO Q?h

Gfegory?f Pe/?ce, President

4755711

 

EXHIBIT 

 

IN THE MARION SUPERIOR COURT OF INDIANA

   

Defendant.

HOMEFEDERAL BANK, CAUSE N0(1)
GREGORY J. PENCE, Quarrgi??t Etta?
MARION COURT


BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
AGAINST GREGORY J. PENCE

I. FACTS AND BACKGROUND

Plaintiff, HomeFederal Bank (?HomeFederal?), is a state chartered bank. (Affidavit of
Charles R. Farber, 1] (hereinafter ?Farber Defendant, Gregory J. Pence is an

individual who resides in Bartholomew County, Indiana. (Answer 2).

On or about January 12, 2001, Pence executed an Unconditional Unlimited Guaranty (the
"First Guaranty") in favor of HomeFederal. (Answer 11 5; Farber Aff. 5, First Guaranty). The
First Guaranty, guarantees the indebtedness of KP Oil, Inc. Oil") to HomeFederal and
Paragraph 1 of the First Guaranty contains the following language:

Guarantor hereby unconditionally and irrevocably guarantees to
Lender the punctual payment and performance when due, whether
at stated maturity or by acceleration or otherwise, of the
indebtedness and other obligations of Borrower to Lender
evidenced by the Note and any other amounts that may become
owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter
referred to as "Borrower's Obligations").

(Answer 1] 6; Farber Aff. 1] 7; First Guaranty 1] 1). Paragraph 1 of the First Guaranty also

contains the following language: AUG 1 2 2005

Guarantor agrees that if for any reason Borrower shall fail to or be
unable to pay, punctually and fully, any of Borrower's Obligations,
Guarantor shall pay such obligations to Lender in full immediately
upon demand. Guarantor agrees that one or more successive

 

 

 

 

actions may be brought against Guarantor, as often as Lender
deems advisable, until all of Borrower's Obligations are paid and
performed in full.

(Farber Aff. 11 8; First Guaranty 11 1).

On or about September 14, 2001, Pence executed another Unconditional Unlimited
Guaranty (the "Second Guaranty") in favor of HomeFederal. (Answer 11 9; Farber Aff. 1] 9,
Second Guaranty). The Second Guaranty, guarantees the indebtedness of KP Oil, Inc. to
HomeFederal and Paragraph 1 of the Second Guaranty contains the following language:

Guarantor hereby unconditionally and irrevocably guarantees to
Lender the punctual payment and performance when due, whether
at stated maturity or by acceleration or otherwise, of the
indebtedness and other obligations of Borrower to Lender
evidenced by the Note and any other amounts that may become
owing by Borrower under the Loan Documents (such
indebtedness, obligations and other amounts are hereinafter
referred to as "Borrower's Obligations").

(Answer 11 11; Farber Aff. 11 11; Second Guaranty 111). The Second Guaranty also contains the
following language:

Guarantor agrees that if for any reason Borrower shall fail to or be

unable to pay, punctually and fully, any of Borrower?s Obligations,

Guarantor shall pay such obligations to Lender in full immediately

upon demand. Guarantor agrees that one or more successive

actions may be brought against Guarantor, as often as Lender

deems advisable, until all of Borrower's Obligations are paid and
performed in ?ill.

(Farber Aff. 1] 12; Second Guaranty 111).
The First Guaranty and the Second Guaranty shall be referred to hereinafter as the ?Pence
Guaranties."
HorneFederal and certain other creditors for which HorneFederal acts agent, loaned
money to KP Oil, which loan is evidenced by the following:
a. Mortgage Note ("Note dated January 12, 2001, in the amount of
$15,000,000.00. (Farber Aff. 11 Note and

2

 

 

b. Mortgage Note ("Note dated September 14, 2001, in the amount of
$912,000.00. (Farber Aff. 1] Note 2).

KP Oil ?led bankruptcy and defaulted on its obligation to repay Note 1 and Note 2.
(Answer 1]1] 15-17; Farber Aff. 1] 13). HomeFederal received a distribution of $12,500,000.00
from KP Oil's bankruptcy estate, which amount was not suf?cient to retire the amounts owing
under Note 1 and Note 2. (Father Aff. 1] 14). As of August 8, 2005, the total amount which
remains due and owing under the loans guaranteed by the Pence Guaranty is not less than
$3,879,104.76. (Farber Aff. 1] 15). By correspondence dated July 30, 2004, HomeFederal
provided notice to Pence of his obligations under the Pence Guaranties. (Answer 1] l9; Farber
Aff. 1] 16; Pence Letter). Pence has failed to make any payments under the Pence Guaranties.
(Answer 1]21; Farber Aff. 1] 17). Pence's failure to make any payments under the Pence Guaranty
is a breach of the Pence Guaranty. (Answer 1]22; Farber Aff. 1]18). It should be very clear that
Pence admits the fact of his breach in Paragraph 22 of his Answer. (Answer 1]22). All
conditions precedent to the bringing of the instant action have been performed, have occurred, or
have been waived. (Answer 1]23). Pence's obligation under the Pence Guaranties is not less than
$3,879,104.76, plus interest accruing after August 8, 2005 at the per diem rate of $609.93, plus
attorneys' fees and costs. (Farber Aff. 1] 19).

HomeFederal has incurred attorneys' fees and costs related to the enforcement of the
Pence Guaranties in the amount of $6,547.58. (Af?davit of Attorneys' Fees 1] 11).

II. LEGAL ANALYSIS

This case is a simple action to enforce the terms of two guaranties executed by Pence,
which guarantee the indebtedness of KP Oil to HomeFederal.
Generally, construction of a written contract is a question of law for which summary

judgment is particularly appropriate. Mortgage Credit Services. Inc. v. Equifax Credit

3

 

 

Information Services, 766 810 (Ind. Ct. App. 2002). Interpretation of a guaranty is

 

governed by the same rules applicable to other contracts. Noble Romans, Inc. v. Ward, 760
1132 (Ind. Ct. App. 2002).

Pursuant to Note 1 and Note 2, KP Oil was obligated to repay the money it borrowed
from HomeFederal and the other lenders for whom HomeFederal acts as agent. (See Farber
Af?davit, 11 3, 3A. and 3B, and Note 1 and Note 2 which are attached thereto as Exhibits A and
B). KP Oil has failed to repay the entire amount of money it borrowed from HomeFederal and
the other lenders for whom HomeFederal acts as agent. (Farber Aff. 11 13 and 1] l4). Pence
executed guaranties which secured and guaranteed the obligations of KP Oil to HomeFederal and
the other lenders for whom HomeFederal acts as agent. (Answer 1[ 5 and 11 9; Farber Aff. 11 5
and 1[ 9). Pence has failed to make payments under, and thereby has breached his obligations
under, the Pence Guaranties (Farber Aff. 11 17 and 11 18). Moreover, Pence admits the fact of his
breach of the Pence Guaranties in Paragraph 22 of his Answer. (Answer 11 22). Therefore, Pence
must now answer for that debt.

The facts in this case are undisputed, and lead to one conclusion: HomeFederal is
entitled to Judgment as a matter of law on the Pence Guaranties against Gregory J. Pence in the
principal amount of not less than $3,879,104.76, plus attorney fees and costs in the amount of
$6,547.58, for a total of $3,885,652.34, plus interest at the per diem rate of $609.93 from August
9, 2005 to the date of this Judgment, plus interest on the unpaid judgment at the statutory rate

until paid in full.

LOCKE REYNOLDS LLP

By: ?-lR 

Jeffrey M. oldtW22702-49
Attorney for Plaintiff, HomeFederal Bank

CERTIFICATE OF SERVICE

Service of the foregoing was made by placing a copy of the same into the United States
Mail, ?rst class postage prepaid, this 12 day of August, 2005, addressed to:

R. C. Richmond, 

SOMMER BARNARD ATTORNEYS PC
3500 One Indiana Square

Indianapolis, IN 46204

0143/

Jeffrey M. Bloldt 

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961

3 1 7-237-3 800

Fax: 317-237-3900
jboldt@locke.com

729115_1

STATE OF INDIANA IN THE MARION SUPERIOR COURT

SS:
COUNTY OF MARION CAUSE NO. 
m, ?can 
HOMEFEDERAL BANK 151, A Ia 
Plaintiff, OCT 1 8 2005 Q13)
vs. Wm? 13'1" mpg?

MARION uncut COURT
GREGORY J. PENCE, 



SATISFACTION AND RELEASE OF JUDGMENT
FOR VALUABLE CONSIDERATION, the receipt and suf?ciency of which are hereby
acknowledged, plaintiff HomeFederal Bank, an Indiana ?nancial institution, by counsel, hereby
acknowledges that the Summary Judgment entered herein on September 30, 2005 has been fully
paid and satis?ed and should be released, and the Clerk is hereby authorized and directed to


endorse said satisfaction and release upon the record, this /6 day of October, 2005:

011/ 

Jeffery M. BoIdt, 4322762149
LOCKE REYNOLDS, LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244?0961

Attorneys for HomeFederal Bank

OCTI 9 2005

CERTIFICATE OF SERVICE

The undersigned hereby certi?es that a copy of the foregoing has been served this i 9
day of October, 2005, by ?rst?class United States mail, postage prepaid, upon the following
counsel of record:

R. C. Richmond, 

SOMMER BARNARD ATTORNEYS, PC
One Indiana Square, Suite 3500

Indianapolis, IN 46204
mi. [a 

Jeffery M. 

263999_1

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Forrn# 269







CASE TYPE 

 

Pending but no Judicial Action Required
Case disposed by Jury Trial

Case disposed by Bench Trial

Case disposed by default judgment
Case disposed by guilty plea/admission
Case has been dismissed

Disposed of

Violations Bureau

titer

 

Disposed by Bench Disposition

Transferred to issue Docket (Probate)

Claim transferred to issue Docket has been disposed.
Referred to ADR (for open cases)

Referred to ADR (for redocketed cases)

Referred to DRCB (for open cases)

Referred to DRCB (for redocketed cases)

Under advisement (for open cases)

Under advisement (for redocketed cases)

Venued to (for open cases)

Venued to (for redocketed cases)

New Cause No. (for open cases)

New Cause No. (for redocketed cases)

Set Case Status to



IN THE MARION SUPERIOR COURT OF INDIANA

 

HOMEFEDERAL BANK, CAUSE NO. 

Plaintiff, 

V- 

GREGORY J. PENCE, 

Defendant. 
SUMMARY JUDGMENT

 

Plaintiff, HomeFederal Bank, by counsel, pursuant to Trial Rule 56, has moved for

summary judgment against Defendant, Gregory J. Pence.

The Court has considered the designated evidence and briefs ?led by the parties. The
parties have appeared by counsel and the Court has heard oral arguments.

IT IS SO ORDERED, there being cause shown, that there are no genuine issues of
material fact and HomeFederal Bank is entitled to judgment as a matter of law against
Defendant, Gregory J. Pence. HomeFederal Bank's Motion for Summary Judgment is therefore
GRANTED, and there being no just reason for delay, entry of ?nal judgment in favor of
HomeFederal Bank and against Gregory J. Pence is hereby ORDERED in the principal amount
of $3,879,104.76, plus attorney fees and costs in the amount of $6,547.58, for a total of
$3,885,652.34, plus interest at the per diem rate of $609.93 from August 9, 2005 to the date of
this Judgment, plus interest on the unpaid judgment at the statutory rate until paid in full.

r'3 3 mug
. t3 but 
DATED?jw. Ha it 


Judge, Marion Superior Court of Indiana
Room No. 5

at:


-

at?

 

 

Distribution:

?i Richmond, Jeffrey M. Boldt
SOMMER BARNARD ATTORNEYS PC LOCKE REYNOLDS LLP
3500 One Indiana Square 201 North Illinois Street, Suite 1000
Indianapolis, IN 46204 PO. Box 44961

Indianapolis, IN 46244-0961

7291193

 

IN THE MARION SUPERIOR COURT OF INDIANA

 

HOMEFEDERAL BANK, 

Plaintiff, ..

V- an; t? 2305
.08.
GREGORY J. FENCE, awrg??fE/A
mam manna COURT
Defendant. 

ORDER SETTING HEARING ON MOTION FOR SUMMARY JUDGMENT

The Court, having received the Motion for Summary Judgment and related documents

?led by Plaintiff, HomeFederal Bank, hereby sets this matter for a Hearing 32 

2005 at i: #111. The Hearing will bill held at 200 E. Washington Street,

Indianapolis, Indiana, 46204.

Date: if

 

Judge, Wounty Superior Cm
DISTRIBUTION:

LOCKE REYNOLDS LLP

Attn: Jeffrey M. Boldt

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961

R. C. Richmond, 

SOMMER BARNARD ATTORNEYS PC
3500 One Indiana Square

Indianapolis, IN 46204

AUG 17 2005

732274_1

 

IN THE MARION SUPERIOR COURT OF INDIANA

    
   

HOMEFEDERAL BANK, CAUSE NO. 
. 
PlaintiffGREGORY J. FENCE, QMni?? ?wm
martini draf- 4E
Defendant. COURT

DESIGNATION OF EVIDENCE IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT

Plaintiff, HomeFederal Bank, by counsel, pursuant to Rule 56 of the Indiana Rules of
Trial Procedure, hereby designates the following evidence in support of its Motion for Summary

Judgment:

1. Plaintiff, HomeFederal Bank's Complaint (exhibits not attached).
2. Defendant, Gregory J. Pence's Answer.
3. Af?davit of Charles R. Farber and the exhibits attached thereto:
A. First Guaranty Agreement;
B. Second Guaranty Agreement;
C. Note 1; and
D. Note 2.

4. Letter from counsel for HomeFederal Bank to Gregory J. Pence dated July 30,

2004 ("Pence Letter").

AUG 1 2 2005

5. Af?davit of Attomeys' Fees.

LOCKE REYNOLDS LLP



Jeffrey M. Boldt #2270249
Attorney for Plaintiff, Home-Federal Bank

CERTIFICATE OF SERVICE

Service of the foregoing was made by placing a copy of the same into the United States
Mail, ?rst class postage prepaid, this 12th day of August, 2005, addressed to:

R. C. Richmond, 

SOMIVIER BARNARD ATTORNEYS PC
3500 One Indiana Square

Indianapolis, IN 46204

0/4/3/

Jeffrey M. Bo'ldt I

LOCKE REYNOLDS LLP

201 North Illinois Street, Suite 1000
PO. Box 44961

Indianapolis, IN 46244-0961
317-237-3800

Fax: 317-237-3900
jboldt@locke.com

729120_1