Promissory Note

PROMISSORY NOTE


$3,150,000.00 Newark, New Jersey
May ___, 2005


FOR VALUE RECEIVED, ABLE ENERGY, INC., (the "BORROWER"), jointly and severally, hereby promises to pay to the order of NORTHFIELD SAVINGS BANK (the "BANK"), at its offices at 1410 St. Georges Avenue, Avenel, New Jersey 07001, or such other place as Bank shall designate in writing from time to time, the principal sum of Three Million One Hundred Fifty Thousand and 00/100 ($3,150,000.00) (the "LOAN") in United States Dollars, together with interest thereon as hereinafter provided.


1. INTEREST RATE. Interest shall be charged on the outstanding principal balance from the date hereof until the full amount of principal due hereunder has been paid at a rate equal to [6.25%/7.00%] (the "Initial Rate") for the first [five (5)/ten(10)] years (the "Initial Term"), which rate shall, on every fifth (5th) anniversary of the date hereof (each, a "Reset Date"), be redetermined at 300 basis points over the Five (5) Year Treasury Rate rounded to the nearest 1/8th, but shall not be lower than the Initial Rate (the Initial Rate as so redetermined, the "Interest Rate"). Interest shall be calculated daily on the basis of the actual number of days elapsed over a 360 day year. [OPTION TO BE DETERMINED BY BORROWER]


2. PAYMENT OF PRINCIPAL AND INTEREST. Principal and interest shall be due and payable in consecutive monthly installments (each, a "Monthly Payment") of _________________ Dollars ($_____________) during the Initial Term, commencing on July 1, 2005, and continuing on the 1st day of each month thereafter (each, a "Payment Date"). Upon the first and each successive Reset Date, the Monthly Payment shall be redetermined based on the then-applicable Interest Rate. All unpaid principal and accrued interest thereon and all other amounts payable hereunder shall be due and payable on June 1, 2030 (the "Maturity Date"). [TO BE DETERMINED UPON ELECTION OF INTEREST OPTION BY BORROWER]


3. APPLICATION OF PAYMENTS. Except as otherwise specified herein, each payment or prepayment, if any, made under this Note shall be applied to pay late charges, accrued and unpaid interest, principal, escrows (if any), and any other fees, costs and expenses which Borrower is obligated to pay under this Note, in such order as Bank may elect from time to time in its sole discretion.


4. TENDER OF PAYMENT. All payments on this Note are payable on or before 2:00 p.m. on the due date thereof, at the office of Bank specified above and shall be credited on the date the funds become available lawful money of the United States. All sums payable to Bank which are due on a day on which Bank is not open for business shall be paid on the next succeeding business day and such extended time shall be included in the computation of interest.


5. LATE CHARGE. In the event that any installment of principal or interest required to be made by Borrower under this Note shall not be received by Bank on or before its due date, Borrower shall pay to Bank, on demand, a late charge of five percent (5%) of such delinquent payment. The foregoing right is in addition to, and not in limitation of, any other rights which Bank may have upon Borrower's failure to make timely payment of any amount due hereunder.


PREPAYMENT. This Note may be prepaid in whole or in part, together with accrued interest on the amount prepaid and all other sums then due under this Note and the Mortgage (as hereinafter defined) to the date of such prepayment, without penalty or premium. Prepayments shall be applied on account of payments of principal in inverse order of the stated maturities thereof.


6. SECURITY FOR THE NOTE.


6.1. This Note is executed and delivered in accordance with a commercial transaction described herein. As security for the payment of the monies owing under this Note, Borrower has delivered or has caused to be delivered to Bank the following (each a "LOAN DOCUMENT" and collectively with this Note and any other guaranty, document, certificate or instrument executed by Borrower or any


other obligated party in connection with the Loan, together with all amendments, modifications, renewals or extensions thereof, the "LOAN DOCUMENTS"): (a) a Mortgage and Security Agreement (the "MORTGAGE") on certain real property and the improvements situated thereon in the Township of Rockaway, County of Morris, State/Commonwealth of New Jersey, as more fully described in the Mortgage (the "PROPERTY"); and (b) an Absolute Assignment of Leases and Rents (the "ASSIGNMENT OF LEASES") assigning all of the assignor's rights as lessor under all leases affecting the Property.


6.2. Borrower hereby grants to Bank a continuing security interest in all property of Borrower, now or hereafter in the possession of Bank, as security for the payment of this Note and any other liabilities of Borrower to Bank, which security interest shall be enforceable and subject to all the provisions of this Note, as if such property were specifically pledged hereunder.


7. DEFAULT RATE. From and after the Maturity Date or from and after the occurrence of an Event of Default hereunder, irrespective of any declaration of maturity, all amounts remaining unpaid or thereafter accruing hereunder, shall, at Bank's option, bear interest at a default rate of four percent (4%) per annum above the interest rate then in effect as set forth herein (the "DEFAULT RATE"), or the highest permissible rate under applicable usury law, whichever is less. Such default rate of interest shall be payable upon demand, but in no event later than when scheduled interest payments are due, and shall also be charged on the amounts owed by Borrower to Bank pursuant to any judgments entered in favor of Bank with respect to this Note.


8. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Bank as follows:


8.1. ORGANIZATION, POWERS. Borrower (i) is (a) an adult individual and is SUI JURIS, or (b) a corporation, general partnership, limited partnership, or limited liability company (as indicated below), duly organized, validly existing and in good standing under the laws of the state of its organization, and is authorized to do business in each other jurisdiction wherein its ownership of property or conduct of business legally requires such authorization; (ii) has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated; and (iii) has the power and authority to execute, deliver and perform, and by all necessary action has authorized the execution, delivery and performance of, all of its obligations under each Loan Document to which it is a party.


8.2. EXECUTION OF LOAN DOCUMENTS. Each of the Loan Documents to which Borrower is a party has been duly executed and delivered by Borrower. Execution, delivery and performance of each of the Loan Documents to which Borrower is a party will not: (i) violate any of its organizational documents, provision of law, order of any court, agency or other instrumentality of government, or any provision of any indenture, agreement or other instrument to which it is a party or by which it or any of its properties is bound; (ii) result in the creation or imposition of any lien, charge or encumbrance of any nature, other than the liens created by the Loan Documents; and (iii) require any authorization, consent, approval, license, exemption of, or filing or registration with, any court or governmental authority.


8.3. OBLIGATIONS OF BORROWER. Each of the Loan Documents to which Borrower is a party is the legal, valid and binding obligation of Borrower, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization or other laws or equitable principles relating to or affecting the enforcement of creditors' rights generally. Borrower is obtaining the Loan for commercial purposes.


8.4. LITIGATION. There is no action, suit or proceeding at law or in equity or by or before any governmental authority, agency or other instrumentality now pending or, to the knowledge of Borrower, threatened against or affecting Borrower or any of its properties or rights which, if adversely determined, would materially impair or affect: (i) the value of any collateral securing this Note; (ii) Borrower's right to carry on its business substantially as now conducted (and as now contemplated); (iii) its financial condition; or (iv) its capacity to consummate and perform its obligations under the Loan Documents to which Borrower is a party.


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8.5. NO DEFAULTS. Borrower is not in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained herein or in any material agreement or instrument to which it is a party or by which it or any of its properties is bound.


8.6. NO UNTRUE STATEMENTS. No Loan Document or other document, certificate or statement furnished to Bank by or on behalf of Borrower contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein and therein not misleading. Borrower acknowledges that all such statements, representations and warranties shall be deemed to have been relied upon by Bank as an inducement to make the Loan to Borrower.


9. COVENANTS.


9.1. OPERATING ACCOUNTS. Borrower shall maintain its primary operating accounts at Bank.


9.2. FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATE.


9.2.1. Borrower shall furnish to Bank the following financial
information, in each instance prepared in accordance with generally
accepted accounting principles consistently applied:


(a) Not later than ninety (90) days after the end of
each fiscal year, annual financial statements of Borrower
including, without limitation, statements of financial
condition, income and cash flows, a reconciliation of net worth,
a listing of all contingent liabilities, notes to financial
statements and any other information requested by Bank, audited
by a certified public accountant acceptable t ...