**Exhibit 10.11**

 

**TERM NOTE 3(variable rate)**

 
| Note Date:      | June 23,  2003 |   | $10,732,500.00 |
|-----------------|---------------------|--------|----------------|
| Maturity  Date: | June 1, 2008   |   |           |

 

**FORVALUE RECEIVED,  LSCP,  L.P., **an Iowa limited partnership (“BORROWER”)promises to pay to the order of First National Bank of Omaha (“BANK”), at itsprincipal office or such other address as BANK or holder may designate fromtime to time, the principal sum of Ten Million Seven Hundred Thirty-TwoThousand Five Hundred and No/100 Dollars ($10,732,500.00), or the amount shownon the BANK’s records to be outstanding, plus interest (calculated on the basisof actual days elapsed in a 360-day year) accruing each day on the unpaidprincipal balance at the annual interest rates defined below.  Absent manifest error, the BANK’s recordsshall be conclusive evidence of the principal and accrued interest owinghereunder.

 

This promissory note isexecuted pursuant to a Construction Loan Agreement (“CONSTRUCTION LOANAGREEMENT”) between BORROWER and BANK dated as of July  25,  2002, which, together will all amendmentsthereto, is collectively called the “AGREEMENT”.  All capitalized terms not otherwise defined in this note shallhave the meanings provided in the CONSTRUCTION LOAN AGREEMENT.

 

**INTERESTACCRUAL. **Intereston the principal amount outstanding shall accrue based on a three month LIBOR+380 bps.  Interest shall be calculatedon the basis of a 360-day year, counting the actual number of days elapsed.

 

**INCENTIVEPRICING. **Theinterest rate applicable to this promissory note is subject to reduction aftera date six months subsequent to CONSTRUCTION COMPLETION DATE, based on thebusiness results of BORROWER.  In theevent that BORROWER maintains the following ratios, measured monthly, theinterest rates will adjust accordingly:

 
| **If  INDEBTEDNESS to NET WORTH  is:**                          |   | **Interest  rate will be:**              |
|-----------------------------------------------------------------|--------|------------------------------------------|
|                                                            |   |                                     |
| Greater than  1.30 : 1.00                                       |   | three month  LIBOR plus 380 basis points |
| Greater than 1.10 : 1.00, but less than or equal to 1.30 : 1.00 |   | three month  LIBOR plus 355 basis points |
| Greater than .90 : 1.00, but less than or equal to 1.10 : 1.00  |   | three month  LIBOR plus 330 basis points |
| Greater than .70 : 1.00, but less than or equal to .90 : 1.00   |   | three month  LIBOR plus 305 basis points |
| Less than or  equal to .70 : 1:00                               |   | three month  LIBOR plus 280 basis points |

** **

**REPAYMENTTERMS. **Interestand Principal shall be due and payable in the amounts described in theAGREEMENT, which will be applied to this Note and an additional Note, in themanner described in the AGREEMENT.  Anyremaining principal balance, plus any accrued but unpaid interest, shall befully due and payable on June 1, 2008, if not sooner paid

 

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**PREPAYMENT. **The BORROWER mayprepay this promissory note in full or in part at any time.  Provided, however, a condition of anyprepayment is that a fee shall be paid to BANK sufficient to make BANK wholefor any expenses related to breaking fixed interest rates.  Each prepayment may be applied in inverseorder of maturity or as the BANK in its sole discretion may deem appropriate.  Such prepayment shall not excuse the BORROWERfrom making subsequent payments each quarter until the indebtedness is paid infull.  No payment of EXCESS CASH FLOWshall be the cause of a payment to BANK for interest rate breakage fees orotherwise result in any prepayment fee.

 

**ADDITIONALTERMS AND CONDITIONS. **TheLOAN AGREEMENT, and any amendments or substitutions, contains additional termsand conditions, including default and acceleration provisions, which areincorporated into this promissory note by reference.  The BORROWER agrees to pay all costs of collection, includingreasonable attorneys fees and legal expenses incurred by the BANK if thispromissory note is not paid as provided above. This promissory note shall be governed by the substantive laws of theState of Nebraska.

 

**WAIVEROF PRESENTMENT AND NOTICE OF DISHONOR. **BORROWERand any other person who signs, guarantees or endorses this promissory note, tothe extent allowed by law, hereby waives presentment, demand for payment,notice of dishonor, protest, and any notice relating to the acceleration of thematurity of this promissory note.

 
|           | LSCP, L.P.,  an Iowa Limited Partnership  by Little Sioux Corn Processors, L.L.C., Its  General Partner |
|----------------|---------------------------------------------------------------------------------------------------------|
|           |                                                                                                    |
|           |                                                                                                    |
|           | By:                                                                                                     | /s/ Daryl J.  Haack |   |
|           | Daryl J. Haack, President of Little   Sioux Corn Processors, L.L.C.                                     |
|           |                                                                                                    |
|           |                                                                                                    |
| STATE OF  IOWA | )                                                                                                       |   |
|           | ) ss.                                                                                                   |   |
| COUNTY OF Iowa | )                                                                                                       |   |

 

On this 20 day of June , 2003, before me, theundersigned, a Notary Public, personally appeared Daryl J. Haack, President of Little Sioux Corn Processors,L.L.C., General Partner of LSCP, L.P., onbehalf of said entity, who executed the foregoing instrument, and acknowledgedthat he executed the same as his voluntary act and deed.

 
| [SEAL] |           | /s/ Becky J. Nothem |   |
|--------|----------------|---------------------|--------|
|   | Notary  Public |

 

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