Exhibit 10.11


 


TERM NOTE 3(variable rate)


 


	
  Note Date:

  	
  June 23,
  2003

  	
   

  	
  $10,732,500.00

  
	
  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 Ten Million Seven Hundred Thirty-Two
Thousand Five Hundred and No/100 Dollars ($10,732,500.00), 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 three month LIBOR
+380 bps.  Interest shall be calculated
on the basis of a 360-day year, counting the actual number of days elapsed.


 


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

  	
   

  	
  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

  



 


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


 

















PREPAYMENT.  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.


 


	
   

  	
  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, 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