Exhibit 10.12


 


TERM NOTE 4 (with reducing revolver feature)


 


	
  Note Date:

  	
  June 23,
  2003

  	
   

  	
  $5,000,000.00 

  
	
  Maturity
  Date:

  	
  June 1, 2008

  	
   

  	
   

  



 


FOR
VALUE RECEIVED, LSCP, L.P., an Iowa limited
partnership (“BORROWER”) promises to pay to the order of First National Bank of
Omaha (“BANK”), at its principal office or such other address as BANK or holder
may designate from time to time, the principal sum of Five Million and No/100
Dollars ($5,000,000.00), or the amount shown on the BANK’s records to be
outstanding, plus interest (calculated on the basis of actual days elapsed in a
360-day year) accruing each day on the unpaid principal balance at the annual
interest rates defined below.  Absent
manifest error, the BANK’s records shall be conclusive evidence of the principal
and accrued interest owing hereunder.


 


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


 


INTEREST
ACCRUAL.  Interest
on the principal amount outstanding shall accrue based on a one month LIBOR
+380 bps.  Interest shall be calculated
on the basis of a 360-day year, counting the actual number of days elapsed.


 


REVOLVING
FEATURE.  The
BORROWER may reborrow, on a revolving basis, that principal amount repaid on
this promissory note which remains at a variable interest rate.  Pursuant to this revolving loan feature the
BANK will lend the BORROWER, from time to time until maturity of this note such
sums in integral multiples of $10,000.00 as the BORROWER may request by
reasonable same day notice to the BANK, received by the BANK not later than
11:00 A.M. on Friday, or the next BUSINESS DAY thereafter, each week but which
shall not exceed in the aggregate principal amount at any one time
outstanding, $5,000,000.00.  The
BORROWER may borrow, repay and reborrow hereunder, from the date of this
AGREEMENT until the maturity of this note, said amount or any lesser sum which is $10,000.00
or an integral multiple thereof.


 


INCENTIVE
PRICING.  The
interest rate applicable to this promissory note is subject to reduction after
a date six months subsequent to CONSTRUCTION COMPLETION DATE, based on the
business results of BORROWER.  In the
event that BORROWER maintains the following ratios, measured monthly, the
interest rates will adjust accordingly:


 

















 


	
  If INDEBTEDNESS
  to NET WORTH

  is:

  	
   

  	
  Interest
  rate will be:

  
	
  Greater than
  1.30 : 1.00

  	
   

  	
  One month
  LIBOR plus 380 basis points

  
	
  Greater than 1.10 : 1.00, but less than or equal to
  1.30 : 1.00

  	
   

  	
  One month
  LIBOR plus 355 basis points 

  
	
  Greater than .90 : 1.00, but less than or equal to 1.10 : 1.00

  	
   

  	
  One month
  LIBOR plus 330 basis points

  
	
  Greater than .70: 1.00, but less than or equal to .90 : 1.00

  	
   

  	
  One month
  LIBOR plus 305 basis points

  
	
  Less than or
  equal to .70 : 1:00

  	
   

  	
  One month
  LIBOR plus 280 basis points

  



 


Following repayment of TERM
NOTE 3, when regular quarterly principal payments are applied to this note, the
amount available to be borrowed under the revolving loan feature will be
correspondingly reduced, so that the maximum amount outstanding under this
promissory note will decrease
accordingly.


 


REPAYMENT
TERMS.  Interest
and Principal shall be due and payable in the amounts described in the AGREEMENT, which will be
applied to this Note and an additional Note, in the manner described in the
AGREEMENT.  Any remaining principal
balance, plus any accrued but
unpaid interest, shall be fully due and payable on June 1, 2008, if not
sooner paid.


 


PRE
PAYMENT.  The
BORROWER may prepay this promissory note in full or in part at any time.  Provided, however, a condition of any
prepayment is that a fee shall be paid to BANK sufficient to make BANK whole
for any expenses related to breaking fixed interest rates.  Each prepayment may be applied in inverse order of maturity or as the BANK in its sole discretion may deem
appropriate.  Such prepayment shall not
excuse the BORROWER from making subsequent payments each quarter until the
indebtedness is paid in full.  No
payment of EXCESS CASH FLOW shall be the cause of a payment to BANK for
interest rate breakage fees or otherwise result in any prepayment fee.


 


ADDITIONAL TERMS AND CONDITIONS.  The LOAN AGREEMENT,
and any amendments or substitutions, contains additional terms and conditions,
including default and acceleration provisions, which are incorporated into this
promissory note by reference.  The
BORROWER agrees to pay all costs of collection, including reasonable attorneys
fees and legal expenses incurred by the BANK if this promissory note is not paid as provided above.  This promissory note shall be governed by
the substantive laws of the State of Nebraska.


 


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


 


(signatures on next page)


 

















 


	
   

  	
   

  	
  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 Cherokee

  	
  )

  	
   

  	
   

  



 


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


 


	
  [SEAL]

  	
   

  	
  /s/ Becky J.
  Nothem

  	
   

  
	
   

  	
  Notary
  Public

  



 

















 


SCHEDULE I to Third Amendment to Construction Loan Agreement


 


AMORTIZATION SCHEDULE - US
Rule, 360 Day Year


	
  #

  	
   

  	
  Date

  	
   

  	
  Principal

  	
   

  
	
  1

  	
   

  	
  01-Sep-03

  	
   

  	
  323,497.83

  	
   

  
	
  2

  	
   

  	
  01-Dec-03

  	
   

  	
  323,268.13

  	
   

  
	
  2003 Totals

  	
   

  	
   

  	
   

  	
  646,765.96

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  01-Mar-04

  	
   

  	
  326,602.11

  	
   

  
	
  4

  	
   

  	
  01-Jun-04

  	
   

  	
  328,297.76

  	
   

  
	
  5

  	
   

  	
  01-Sep-04

  	
   

  	
  331,720.81

  	
   

  
	
  6

  	
   

  	
  01-Dec-04

  	
   

  	
  336,777.45

  	
   

  
	
  2004 Totals

  	
   

  	
   

  	
   

  	
  1,323,398.13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  01-Mar-05

  	
   

  	
  341,810.48

  	
   

  
	
  8

  	
   

  	
  01-Jun-05

  	
   

  	
  342,254.96

  	
   

  
	
  9

  	
   

  	
  01-Sep-05

  	
   

  	
  345,823.54

  	
   

  
	
  10

  	
   

  	
  01-Dec-05

  	
   

  	
  350,872.34

  	
   

  
	
  2005 Totals

  	
   

  	
   

  	
   

  	
  1,380,761.32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  01-Mar-06

  	
   

  	
  355,894,25

  	
   

  
	
  12

  	
   

  	
  01-Jun-06

  	
   

  	
  356,798.55

  	
   

  
	
  13

  	
   

  	
  01-Sep-06

  	
   

  	
  360,518.77

  	
   

  
	
  14

  	
   

  	
  01-Dec-06

  	
   

  	
  365,559.39

  	
   

  
	
  2006 Totals

  	
   

  	
   

  	
   

  	
  1,438,770.96

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  01-Mar-07

  	
   

  	
  370,569.71

  	
   

  
	
  16

  	
   

  	
  01-Jun-07

  	
   

  	
  371,953.15

  	
   

  
	
  17

  	
   

  	
  01-Sep-07

  	
   

  	
  375,831.38

  	
   

  
	
  18

  	
   

  	
  01-Dec-07

  	
   

  	
  380,863,49

  	
   

  
	
  2007 Totals

  	
   

  	
   

  	
   

  	
  1,499,217.73

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
   

  	
  01-Mar-08

  	
   

  	
  384,791.46

  	
   

  
	
  20

  	
   

  	
  01-Jun-08

  	
   

  	
  Entire remaining balance due