Document:

ex_frmsubagmt.htm

EXHIBIT 10.64

SUBSCRIPTION AGREEMENT

Dated as of April 15, 2013

	
Subscriber Information

 

Name:

Address:                   

  

  

  

Email:                   

 

	
Total Investment

 

$                          

 

 

 

Communication Intelligence Corporation

c/o SG Phoenix LLC, as Administrative Agent

110 East 59th Street, Suite 1901

New York, NY 10022

Re:           Series D Preferred Stock Unit Purchase

Ladies and Gentlemen:

Reference is hereby made to the confidential private placement memorandum (the “Memorandum”), dated as of April 15, 2013, of Communication Intelligence Corporation, a Delaware corporation (the “Company”).

Pursuant to the Memorandum and to subscription agreements in the form of this agreement (each a “Subscription Agreement,” and, collectively, the “Subscription Agreements”), the Company proposes to issue to accredited investors up to 1,000,000 units (the “Units”), consisting of up to $5,000,000 in shares of the Company’s preferred stock, at a purchase price of $5.00 per Unit (the “Offering”). As described in greater detail below, new investors, including the undersigned (each an “Investor,” and collectively, the “Investors”) at an initial closing (the “Initial Closing”) and for each Unit will be issued (i) four (4) shares of Series D-2 Convertible Preferred Stock (the “Series D-2 Preferred Stock”), which shares are convertible into shares of the Company’s common stock, $0.01 par value per share (“Common Stock”), at a conversion price equal to $0.05 per share (subject to adjustment), and (ii) one (1) share of Series D-1 Convertible Preferred Stock (the “Series D-1 Preferred Stock”), which shares are convertible into shares of the Company’s Common Stock at a conversion price equal to $0.0225 per share (subject to adjustment). The Series D-1 Preferred Stock and Series D-2 Preferred Stock are referred to collectively herein as the “Series D Preferred Stock.” The Company may conduct additional closings (including the Initial Closing, each a “Closing”) until a maximum of $5 million has been received prior to June 14, 2013 (the “Termination Date”). The Company may extend the Termination Date, without notice and at its sole discretion, for an additional sixty (60) days.

  

  

EXHIBIT 10.64

1. Subscription.  The undersigned hereby executes and delivers this Subscription Agreement and subscribes for and agrees to purchase a number of units consisting of four (4) shares of Series D-2 Preferred Stock and one (1) share of Series D-1 Preferred Stock at a price of $5.00 for each Unit, for an aggregate amount $____________ (the “Total Amount of Investment”).  The Total Amount of Investment should be remitted to SG Phoenix LLC, as administrative agent (“SG Phoenix” or the “Administrative Agent”), upon execution and delivery of this Subscription Agreement.  The Total Amount of Investment is payable either by check made out to “CIC Series D Escrow”, or by wire transfer using the following instructions:

Citibank N.A. (New York, NY)

Attn.:  Brian Fontanella (Citi Private Bank)

ABA# 021000089

Account Name: CIC SERIES D ESCROW

Account # 4971737775

Any subscription not received and accepted by the Termination Date will be deemed refused and SG Phoenix will return the Total Amount of Investment to the undersigned.

2. Subscription Instruments.  The undersigned is delivering to the Company a copy of this Subscription Agreement duly completed and executed by the undersigned.

3. Conditions to Closings.

(a)           Conditions of Investors’ Obligations at Closing.  The obligations of each Investor under this Subscription Agreement are subject to the fulfillment, on or prior to the date of a Closing, of each of the following conditions, any of which may be waived in whole or in part by the Administrative Agent in its sole and absolute discretion:

(i)           Performance.  The Company shall have performed and complied in all material respects with all agreements, obligations and conditions contained in this Subscription Agreement that are required to be performed or complied with by it with respect to a Closing on or prior to the date of a Closing.

(ii)           Minimum Subscription Amount.  The Company shall have received subscriptions for the purchase of at least $100,000 of Units prior to the Initial Closing.

(iii)           No Material Adverse Change.  No material adverse change with respect to the Company’s business, properties, prospects or condition (financial or otherwise) shall have occurred between December 31, 2012, and the date of a Closing.

  

  

EXHIBIT 10.64

 

(iv)           Consents and Waivers. The Company shall have obtained all consents or waivers necessary to execute and perform its obligations under this Subscription Agreement with respect to the lawful sale and issuance of the Notes on or prior to the date of a Closing.

(v)           Governmental Approvals.  Except for the notices required or permitted to be filed after the date of a Closing pursuant to applicable federal and state securities laws, the Company shall have obtained all governmental approvals required in connection with the lawful sale and issuance of the Series D Preferred Stock at a Closing.

(vi)           Secretary’s Certificate.  On or prior to the date of a Closing, the Company shall have delivered to the Administrative Agent, on behalf of the Investors, a certificate executed by the Secretary of the Company dated as of the date of such Closing certifying with respect to (A) a copy of the Company’s Certificate of Incorporation and its Bylaws in effect on such date and that the Company is not in violation of or default under any provision of its Certificate of Incorporation or Bylaws as of and on the date of such Closing and (B) Board resolutions of the Company authorizing the lawful sale and issuance of the Series D Preferred Stock.

(b)           Conditions to Obligations of the Company.  The Company’s obligation to issue and sell the Units at Closing is subject to the fulfillment, to the Company’s reasonable satisfaction, on or prior to the date of such Closing, of the following conditions, any of which may be waived in whole or in part by the Company:

(i)           Representations and Warranties.  The representations and warranties made by each Investor in Section 5 shall be true and correct when made, and shall be true and correct on the date of a Closing with the same force and effect as if they had been made on and as of the same date.

(ii)           Tender of Funds by Investors.  Each Investor shall have delivered to the Administrative Agent such Investor’s Total Amount of Investment.

(iii)           Consents and Waivers. The Company shall have obtained all consents or waivers necessary to execute and perform its obligations under this Subscription Agreement with respect to the lawful sale and issuance of the Units on or prior to the date of a Closing.

4. Representations and Warranties.  In connection with the undersigned’s subscription, the undersigned hereby represents and warrants as follows:

(a)           (i)           The undersigned acknowledges that the undersigned has carefully reviewed the Memorandum and the Company’s presentations and SEC filings provided along with the Memorandum, including but not limited to the Company Overview presentation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC on March 29, 2013 and the Company’s most recent Definitive Proxy Statement on Schedule 14A, filed with the SEC on October 22, 2012.

  

  

EXHIBIT 10.64

 

(ii)           The undersigned has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of an investment in the Company and making an informed investment decision with respect thereto.  The undersigned has obtained sufficient information to evaluate the merits and risks of the investment and to make such a decision.

(iii)           The undersigned is an “Accredited Investor” (as such term is defined in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”)).

(b)           The undersigned has had access to all documents, records and books of the Company which the undersigned (or the undersigned’s advisor) considers necessary or appropriate to make an informed decision pertaining to this investment.  Additionally, the undersigned has been provided the opportunity to ask questions and receive answers concerning the terms and provisions of the Series D Preferred Stock and to obtain any additional information which the Company possesses, or can acquire without unreasonable effort or expense that is relevant to the undersigned’s investment decision.  To the extent the undersigned has not sought information regarding any particular matter, the undersigned represents that he, she or it had and has no interest in doing so and that such matters are not material to the undersigned in connection with this investment.

(c)           The undersigned (i) has adequate means of providing for the undersigned’s current needs and possible personal contingencies and those of the undersigned’s family, if applicable, in the same manner as the undersigned would have been able to provide prior to making the investment contemplated herein, (ii) has no need for liquidity in this investment, (iii) is aware of and able to bear the risks of the investment for an indefinite period of time and (iv) presently, based on existing conditions, is able to afford a complete loss of such investment.

(d)           The undersigned recognizes that an investment in the Series D Preferred Stock (the “Securities”) involves significant risks and the undersigned may lose his, her or its entire investment in the Securities.

(e)           The undersigned understands that the Securities are “restricted securities” as that term is defined pursuant to Rule 144 of the Securities Act, and have not been registered under the Securities Act or under certain state securities laws in reliance upon exemptions therefrom for nonpublic offerings.  The undersigned understands that the Securities must be held indefinitely unless the sale thereof is subsequently registered under the Securities Act and under certain state securities laws or an exemption or exemptions from such registration are available.  The undersigned understands that the Company is under no obligation to register the Securities under the Securities Act or any other applicable securities law and that the undersigned has no right to require such registration.

  

  

EXHIBIT 10.64

 

(f)           The Securities are being purchased solely for the undersigned’s account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, and no other person has a direct or indirect beneficial interest in such Securities.  The undersigned represents that the undersigned has no agreement, understanding, commitment or other arrangement with any person and no present intention to sell, transfer or assign any Securities.

(g)           The undersigned agrees not to sell or otherwise transfer the Securities or the underlying shares of Common Stock unless they are registered under the Securities Act and under any applicable state securities laws, or an exemption or exemptions from such registration are available.

(h)           The undersigned has all requisite legal capacity and power to enter into this Subscription Agreement which constitutes a valid and binding agreement of the undersigned enforceable against the undersigned in accordance with its terms; and the person signing this Subscription Agreement on behalf of the undersigned is empowered and duly authorized to do so.  The undersigned, if a corporation, partnership, trust or other entity, is authorized and otherwise duly qualified to purchase and hold the Securities and to enter into this Subscription Agreement and such entity has not been formed for the specific purpose of acquiring the Securities in the Company unless all of its equity owners qualify as accredited individual investors.

(i)           All information which the undersigned has provided to the Administrative Agent and the Company concerning the undersigned, the undersigned’s financial position and knowledge of financial and business matters, or, in the case of a corporation, partnership, trust or other entity, concerning such knowledge of the person making the investment decision on behalf of such entity, including all information contained in this Subscription Agreement, is true, correct and complete as of the date set forth on the signature page hereof, and if there should be any adverse change in such information prior to the subscription being accepted, the undersigned will immediately provide the Company with such information.

(j)           The offering and sale of the Securities to the undersigned were not made through any advertisement in printed media of general and regular paid circulation, radio or television or any other form of advertisement, or as part of a general solicitation.

(k)           The undersigned shall pay all sales, transfer, income, use, and similar taxes arising out of or in connection with the Securities in accordance with all applicable laws.

5. Confidentiality.  The undersigned hereby acknowledges and agrees that the Term Sheet and the information contained in this Subscription Agreement may contain material information about the Company that has not been disclosed to the public generally.  The undersigned understands that it and its representatives could be subject to fines, penalties and other liabilities under applicable securities laws if the undersigned or any of its representatives trades in the Company’s securities while in possession of any material, non-public information concerning the Company.  The undersigned agrees to 

 

  

  

EXHIBIT 10.64

 

keep such information confidential and not to trade, and not to allow any of its representatives to trade, in the Company’s securities until such time as the undersigned or such representatives are no longer prohibited from so trading under all applicable securities laws (whether because the Company publicly disclosed all material information about the Company contained in the Memorandum and this Subscription Agreement or otherwise).

6. Indemnification.  The undersigned agrees to indemnify and hold harmless the Company and its stockholders, officers, directors, employees, advisors, attorneys and agents (including the Administrative Agent) (the “Indemnitees”) from and against all liability, damage, losses, costs and expenses (including reasonable attorneys’ fees and court costs) which they may incur by reason of any breach of the representations and warranties and agreements made by the undersigned herein or in any document provided by the undersigned to the Company.

7. Market Standoff Provision.  The undersigned hereby agrees that, if so requested in writing by the Company or any managing underwriter (the “Managing Underwriter”) in connection with any registration of the offering by the Company of any securities of the Company under the Securities Act, the undersigned shall not sell or otherwise transfer any securities of the Company during the 180-day period (or such other period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the “Market Standoff Period”) following the effective date of a registration statement of the Company filed under the Securities Act.  The Company may impose stop-transfer instructions with respect to the Securities subject to the foregoing restrictions until the end of such Market Standoff Period.

8. Legend.  The undersigned understands and agrees that the Company will cause the legend set forth below, or a legend substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Securities (or the securities underlying the Securities), together with any other legend that may be required by federal or state securities laws:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SAID ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OF HYPOTHECATION DOES NOT VIOLATE THE PROVISIONS THEREOF.

9. Additional Action.  The undersigned shall, upon the request of the Administrative Agent or the Company, from time to time, execute and deliver promptly to the Administrative Agent or the Company all instruments and documents of further assurances or otherwise, and will do any and all such acts and things, as may be reasonably required to carry out the obligations of the undersigned hereunder and to consummate the transactions contemplated hereby.

  

  

EXHIBIT 10.64

 

10. Miscellaneous.

(a)           The undersigned agrees not to transfer or assign this Subscription Agreement, or any of the undersigned’s interest herein, and further agrees that the transfer or assignment of the Securities acquired pursuant hereto shall be made only in accordance with all applicable laws.  The covenants, representations and warranties contained in this Subscription Agreement shall be binding on the undersigned’s heirs, legal representatives, successors and assigns and shall inure to the benefit of the Company and the Indemnitees and their respective successors and assigns.

(b)           The undersigned agrees that subject to any applicable state law, the undersigned may not cancel, terminate or revoke this Subscription Agreement or any agreement of the undersigned made hereunder and that this Subscription Agreement shall survive the acceptance hereof by the Company as well as the death or disability of the undersigned and shall be binding upon the undersigned’s heirs, executors, administrators, successors and assigns.

(c)           This Subscription Agreement, together with the Exhibits attached hereto, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by all parties hereto.

(d)           This Subscription Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of New York, without regard to its conflicts of law rules.  Each of the parties hereto hereby irrevocably consents to the (non-exclusive) jurisdiction of the courts of the State of New York and of any Federal court located therein in connection with any suit, action or other proceeding arising out of or relating to this Subscription Agreement and waives any objection to venue in the State of New York.

(e)           Within five (5) days after receipt of a written request from the Company, the undersigned agrees to provide such information, to execute and deliver such documents and to take, or forbear from taking, such actions as may be necessary to comply with any and all laws and ordinances to which the Company is subject.

(f)           For the convenience of the parties, any number of counterparts hereof may be executed and each such executed counterpart shall be deemed an original, but all such counterparts together shall constitute one and the same instrument.

(g)           This Subscription Agreement may be executed by the undersigned manually or by electronic signature and transmitted by facsimile, e-mail or electronically to the Administrative Agent, and if so executed and transmitted this Subscription Agreement will be for all purposes as effective as if the parties had delivered an executed original Subscription Agreement.

[Balance of page intentionally left blank]

 

  

  

EXHIBIT 10.64

 

SUBSCRIBER SIGNATURE PAGE

IN WITNESS WHEREOF, the undersigned has duly executed this Subscription Agreement as of the date first above written.

	
Total Amount of Investment

 

 

 

 

 

Number of Units

 

 

 

 

 

Shares of Series D-1 Preferred Stock

 

 

 

 

 

Shares of Series D-2 Preferred Stock

 

 

 

 

	
For Individuals:

 

 

 

Print Name Above

 

 

 

 

Sign Name Above

 

 

 

Social Security Number

 

For Entities:

 

 

 

Print Name of Entity Above

 

 

 

By:      

Name:

Title:

 

 

 

Employer Identification Number

  or Tax ID Number

 

  

  

EXHIBIT 10.64

SUBSCRIPTION ACCEPTANCE

IN WITNESS WHEREOF, the undersigned hereby accepts the subscription on behalf of the Company in accordance with the terms of the foregoing Subscription Agreement as of the date first above written.

SG PHOENIX LLC, as Administrative Agent

By:                                                                

Name:           Andrea Goren

Title:           MemberExhibit 4.1

FIFTH AMENDMENT TO LOAN AGREEMENT

THIS FIFTH AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made effective as of August 9, 2013, by and between IRET PROPERTIES, A NORTH DAKOTA LIMITED PARTNERSHIP, a North Dakota limited partnership (the "Borrower"), and FIRST INTERNATIONAL BANK & TRUST, a North Dakota state bank (the "Lender").

RECITALS

A.            Borrower and Lender are parties to that certain Loan Agreement, dated August 12, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the "Loan Agreement"), providing for a credit facility from the Lender to the Borrower (the "Loan"), which is evidenced by that certain Revolving Promissory Note, dated August 12, 2010, payable to the Lender in the amount of the Loan (as amended, restated, supplemented or otherwise modified from time to time, the "Note").

B.            Borrower and Lender entered into that First Amendment to Loan Agreement, dated August 25, 2011, that Second Amendment to Loan Agreement, dated November 8, 2011, that Third Amendment to Loan Agreement, dated June 15, 2012, and that Fourth Amendment to Loan Agreement, dated August 10, 2012, by which the parties modified certain terms and conditions of the Loan Agreement.

C.            Borrower and Lender wish to further amend the Loan Agreement as provided herein.

D.            Pursuant to Section 7.11 of the Loan Agreement, all amendments must be contained in a written agreement signed by the Borrower and the Lender.

NOW THEREFORE, in consideration of the premises and their mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.            Definitions.  Unless the context clearly requires otherwise, capitalized terms used herein and not defined herein shall have the meanings given to them in the Loan Agreement.

2.            Amendments to Loan Agreement.  The Loan Agreement is hereby amended as follows:

	
(a)

	
Section 2.04 of the Loan Agreement is hereby deleted in its entirety and restated as follows:

Section 2.04                          Revolving Credit Facility Term.  The initial term of the Revolving Credit Facility will be the Revolving Credit Facility Initial Term.  The Revolving Credit Facility will terminate at the expiration of the Revolving Credit Facility Initial Term if the Lender, in its sole discretion, delivers to the Borrower a Revolving Credit Facility Termination Notice on or before October 12, 2012.  If the Lender does not deliver a Revolving Credit Facility Termination Notice on or before October 12, 2012, the term of Revolving Credit Facility will continue for successive Revolving Credit Facility Renewal Terms.  During the first Revolving Credit Facility Renewal Term, if the Lender, in its sole discretion, delivers to the Borrower a Revolving Credit Facility Termination Notice on or before October 31, 2013, the Revolving Credit Facility will terminate at the expiration of the first Revolving Credit Facility Renewal Term.  After October 31, 2013 and during the first or any subsequent Revolving Credit Facility Renewal Term, Lender has the right, in its sole discretion, to terminate the Revolving Credit Facility by providing a Revolving Credit Facility Termination Notice at least twelve (12) months prior to the date of termination.

	
(b)

	
Exhibit C-6 is hereby deleted in its entirety.

	
(c)

	
The term "Property(ies)" as used in the Loan Agreement is hereby deleted in its entirety and restated as follows:

"Property(ies)" – The real properties described on Exhibit C-1 through Exhibit C-5, Exhibit C-7 through Exhibit C-10, Exhibit C-13, Exhibit C-15 through Exhibit C-17, Exhibit C-19 through Exhibit C-25 and Exhibit C-27 through Exhibit C-29 attached hereto, which are collateral for the Obligations, together with Eligible Additional Real Properties which become collateral for the Obligations and such other real and personal property from time to time securing the Obligations.

	
(d)

	
Exhibit A attached to this Amendment is hereby incorporated as Exhibit C-29 to the Loan Agreement.

3.            Conditions Precedent.  This Amendment shall be subject to the condition precedent that the Lender shall have received the following, each satisfactory to the Lender in form and substance:

	
(a)

	
This Amendment, duly executed by the Borrower;

	
(b)

	
Satisfactory evidence that all corporate and other proceedings that are necessary in connection with this Amendment have been taken to the Lender's and its counsel's satisfaction and the Lender and such counsel shall have received all such counterpart originals or certified copies of such documents as the Lender may request;

	
(c)

	
Payment of all of Lender's fees and costs associated with this Amendment; and

	
(d)

	
Such other information and documents as may reasonably be required by the Lender and its counsel in connection with this Amendment.

4.            No Other Amendments Intended.  Except as expressly provided hereby, all of the terms and provisions of the Loan Agreement and the other Loan Documents are and shall remain in full force and effect and are hereby ratified and confirmed by the Borrower.  The amendments contained herein shall not be construed as a waiver or amendment of any other provision of the Loan Agreement or the other Loan Documents or for any purpose except as expressly set forth herein or a consent to any further or future action on the part of the Borrower or the other Credit Parties that would require the waiver or consent of the Lender.

5.            No Impairment of Lien.  Any and all collateral described in the Mortgages and the transactions contemplated thereunder and thereby shall remain subject to the lien, charge or encumbrance of the Mortgages and nothing in this Amendment shall affect the lien of the Mortgages or the other Loan Documents on such collateral or the priority of such liens over any other liens, charges, encumbrances or conveyances, nor release or change the liability of any party who may now be or after the date of this Amendment, become liable, primarily or secondarily, under the Loan Documents.  Borrower agrees to execute any instruments Lender reasonably determines to be necessary to maintain a perfected security interest in any of such collateral.

6.            Representations and Warranties.  The Borrower hereby represents and warrants to the Lender (before and after giving effect to this Amendment) that:

2

	
(a)

	
Corporate Authority.  The Borrower has the limited partnership power and authority, and the legal right, to execute, deliver and perform this Amendment and to obtain extensions of credit under the Loan Agreement as amended by this Amendment (the "Amended Loan Agreement").

	
(b)

	
Corporate Action.  The Borrower has taken all necessary limited partnership action to authorize the execution, delivery and performance of this Amendment and to authorize the extensions of credit on the terms and conditions of the Amended Loan Agreement.

	
(c)

	
Organizational Documents.  The Organizational Documents constitute all of the organizational documents of Borrower and each Credit Party and are in full force and effect and have not been amended or modified.

	
(d)

	
Qualification of Undersigned.  The undersigned officer of Borrower is duly qualified and acting in such official capacity on behalf of Borrower, is familiar with the facts herein represented and warranted, and is duly authorized to represent and warrant the same and make this Amendment.

	
(e)

	
Consents.  No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required in connection with this Amendment, the extensions of credit under the Amended Loan Agreement or the execution, delivery, performance, validity or enforceability of this Amendment, or the performance, validity or enforceability of the Amended Loan Agreement, except consents, authorizations, filings and notices which have been obtained or made and are in full force and effect.

	
(f)

	
Representations and Warranties in Loan Documents.  Each of the representations and warranties made by any Credit Party herein or in or pursuant to the Loan Documents is true and correct on and as of the date of this Amendment as if made on and as of such date (except that any representation or warranty which by its terms is made as of an earlier date shall be true and correct as of such earlier date).

	
(g)

	
Enforceability.  This Amendment constitutes the legal, valid and binding obligation of Borrower enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting the enforcement of creditors' rights generally.

	
(h)

	
No Defaults.  No Default or Event of Default has occurred and is continuing, or will result from this Amendment or any extension of credit under the Amended Loan Agreement.

	
(i)

	
No Defenses.  Borrower hereby represents and warrants that: (i) as of the date hereof, it has no defenses or rights of setoff against the enforcement by the Lender of its obligations under the Loan Documents; and (ii) no events have occurred which, with the giving of notice or passage of time, or both, would entitle it to any such defenses or rights of setoff.

	
(j)

	
Financial Information.  The financial statements heretofore delivered to Lender in connection with this Amendment and the other Loan Documents are true and correct in all material respects and fairly present the financial condition of the subjects thereof, and there have been no material adverse changes in the condition or prospects, financial or otherwise, of the subjects thereof since the dates of such financial statements.

	
(k)

	
Lender Not in Default.  Lender is not in default under the Loan Documents or any instrument executed in connection with the Loan Documents, and no condition exists which, with the giving of notice or lapse of time, or both, would constitute a default by Lender thereunder.  Any default or purported default of Lender in connection with the Loan Documents arising prior to the execution of this Amendment, whether known or unknown, is waived by Borrower.

7.            Release.  In consideration of the covenants of this Amendment, Borrower hereby releases and discharges Lender, and each of its predecessors, successors and assigns, and each and all of its or their directors, officers, employees, attorneys, accountants, consultants, and other agents, of and from any and all claims, causes of action,

3

 obligations, costs, damages, judgments, and liabilities, of whatever kind or nature, in law, equity or otherwise, whether known or unknown, which it may have had or now has, in connection with the Loan to and including the date of this Amendment.  This release shall be binding upon the Borrower and its subsidiary and affiliated entities and all trustees and receivers.  Borrower acknowledges that it has entered into the foregoing release freely and voluntarily upon its own information and investigation and after consultation with legal counsel of its own choosing.  The foregoing release shall operate as a full and complete release between and among the parties notwithstanding the discovery of any different or additional facts.

8.            Counterparts.  This Amendment may be executed in any number of counterparts, all of which shall constitute one and the same agreement, and any party hereto may execute this Amendment by signing and delivering one or more counterparts. Delivery of an executed counterpart of this Amendment by email or other electronic means shall be effective as delivery of an original executed counterpart of this Amendment.

9.            Expenses.  Borrower agrees to reimburse Lender upon demand for all reasonable out-of-pocket expenses incurred by Lender in connection with the Loan, the Loan Documents and this Amendment including, but not limited to, legal expenses and attorneys' fees sustained by Lender in connection with the preparation of this Amendment, the administration of the Loan or the exercise of any right or remedy available to Lender under the Loan Documents as amended hereby (whether or not suit is commenced) or otherwise at law or in equity.

(Signature pages follow.)

4

BORROWER'S SIGNATURE PAGE

TO

FIFTH AMENDMENT TO LOAN AGREEMENT

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives as of the day and year first set forth above.

BORROWER:

IRET PROPERTIES, A NORTH DAKOTA LIMITED PARTNERSHIP,

a North Dakota limited partnership

BY:  ITS GENERAL PARTNER:

IRET, INC.,

a North Dakota corporation

By:/s/ Michael A. Bosh                                                                                    

      Name:  Michael A. Bosh

      Its:  Executive Vice President and

Assistant Secretary

5

LENDER'S SIGNATURE PAGE

TO

FIFTH AMENDMENT TO LOAN AGREEMENT

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized representatives as of the day and year first set forth above.

LENDER:

FIRST INTERNATIONAL BANK & TRUST,

a North Dakota state bank

By:/s/ Stacey J. Diehl                                                                                    

Stacey J. Diehl, Senior Vice President

6

EXHIBIT A

PROPERTY DESCRIPTION

STARLUME BLOOMINGTON

2000 W 94th St., Bloomington, Minnesota

Lot 1, Block 1, Contour Plastic 1st Addition, Hennepin County, Minnesota

Abstract

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