Document:

Exhibit
10.23.8

 

EIGHTH AMENDMENT

 

TO

 

LEASE AGREEMENT

 

AND

 

REAFFIRMATION OF GUARANTY

 

By and Among

 

The Ports of Indiana

 

Aventine Renewable Energy-Mt Vernon, LLC

 

And

 

Aventine Renewable Energy Holdings, Inc.

 

 

EIGHTH  AMENDMENT TO LEASE AGREEMENT

AND REAFFIRMATION OF GUARANTY

 

THIS EIGHTH AMENDMENT TO LEASE
AGREEMENT AND REAFFIRMATION OF GUARANTY (“Eighth Amendment”)
is made and entered into this 10th day of December, 2009 by and among the PORTS
OF INDIANA, a body corporate and politic existing under the laws of the State
of Indiana and formerly known as the Indiana Port Commission (the “Ports”), AVENTINE RENEWABLE ENERGY-MT VERNON, LLC a Delaware
Limited Liability Company (“Lessee”, and
together the “Parties”) and AVENTINE RENEWABLE
ENERGY HOLDINGS, INC. (“Guarantor”).

 

RECITALS:

 

A.            The Ports is charged with the
management and operation of the Ports of Indiana, including the Port of
Indiana-Mount Vernon, in Posey County, Indiana (the “Port”).

 

B.            The Parties entered into a certain
Lease Agreement dated October 31, 2006, which was executed by the Office
of the Attorney General and the Office of the Governor on January 19, 2007
and January 24, 2007 respectively (the “Original
Lease”), which Original Lease was amended by (i) a certain
First Amendment to Lease Agreement and Reaffirmation of Guaranty dated June 14,
2007 among the Parties and Guarantor, (ii) a certain Second Amendment to
Lease Agreement and Reaffirmation of Guaranty dated October 18, 2007 among
the Parties and Guarantor, (iii) a certain Third Amendment to Lease
Agreement and Reaffirmation of Guaranty dated December 20, 2007 among the
Parties and Guarantor, (iv) a certain Fourth Amendment to Lease Agreement
and Reaffirmation of Guaranty dated June 19, 2008, (v) a certain
Fifth Amendment to Lease Agreement and Reaffirmation of Guaranty dated December 18,
2008 among the Parties and Guarantor; and, (vi) a certain Sixth Amendment
to Lease Agreement and Reaffirmation of Guaranty among the Parties and
Guarantor dated February 12, 2009, (vii) a certain Seventh Amendment
to Lease Agreement dated April 23, 2009 (said Original Lease as amended is
herein referred to as the “Lease”),
whereby the Ports leased to Lessee and Lessee leased from the Ports that
certain real estate described in the Lease, located at the Port of
Indiana-Mount Vernon, a port managed and operated by the Ports in Posey County, Indiana.

 

C.            The Lessee represents, covenants,
and warrants that the following Events of Default have occurred under the Lease
and that, to the best of its knowledge, there are no other Events of Default or
defaults (which with the passage of time or giving of notice would constitute
Events of Default) by the Lessee under the Lease which have not been cured
prior to the date hereof:

 

(i)                                     Lessee has failed to timely
complete construction of Phase One and timely commence production of ethanol
for Phase One;

 

(ii)           Lessee has permitted or otherwise
failed to timely cure the imposition of mechanics liens on the property; and

 

 

(iii)                               Lessee has filed a voluntary
petition for relief under the United States Bankruptcy Code.

 

D.            Subject to the Lessee obtaining a
final order authorizing the assumption of the Lease, as amended, pursuant to Section 365
of the Bankruptcy Code, the Parties have agreed to amend the Lease to reschedule
the completion and commencement of production of ethanol for Phase One;
establish criteria for the completion and commencement of production for Phase
Two; extend the cure period for Section 4.09; extend the deadline for the
employment of 50 full time positions at the facility;  insert a waiver by the Ports of certain
occurrences as Events of  Default; extend
the date which the As Built Survey is to be completed; amend the Minimum
Guaranteed Wharfage and the payment dates therefore; and make non-material
amendments to accomplish the Parties’ agreement.

 

E.             Guarantor is joining in the
execution of this Eighth Amendment solely for purposes of consenting to all
provisions of this Eighth Amendment and ratifying, confirming and reaffirming
its obligations under that certain Lease Guaranty dated as of October 31,
2006 (the “Lease Guaranty”).

 

F.             On April 7, 2009, Lessee and
Guarantor, together with the latter’s affiliated entities, filed voluntary
petitions for relief under chapter 11 of title 11 of the United States Code in
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”).

 

G.            Lessee has advised the Ports that it
wishes to assume the Lease, as amended, under Section 365 of the
Bankruptcy Code and the Guarantor has advised the Ports that it wishes to
assume the Lease Guaranty.

 

H.            Lessee, the Ports and Guarantor have
each had substantial participation in the preparation of this Eighth Amendment
which shall become effective upon entry of a final non-appealable Order of the
Bankruptcy Court (i) authorizing the Lessee’s and Guarantor’s entry into
this Eighth Amendment, and (ii) assuming the Lease and the Guaranty.

 

I.              At a properly convened public
meeting of the Commission of the Ports, the duly authorized officers have approved
the execution and delivery of this Eighth Amendment.

 

NOW,
THEREFORE, in consideration of the foregoing premises, the mutual undertakings
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Ports, Lessee and
Guarantor (solely for purposes of its agreement to the provisions of Paragraphs
9 and 13 below) hereby agree as follows:

 

1.  Section 3.04(a) of
the Lease shall be deleted in its entirety and replaced with the following:

 

In addition to the Basic Rent and the tariff charges provided in Sections
3.02 and 3.03, Lessee shall pay or cause to be paid to the Commission wharfage
payments on no less than Two Hundred Twenty Million (220,000,000) gallons of
ethanol per year (equal to 721,600 tons) (the “Minimum Guaranteed Ethanol Wharfage”) and Six Hundred Eighty
Five Thousand fifty four (685,054) tons of DDG’s per year (the tons of DDG’s 

 

 

generated from the production of 220 million gallons of ethanol) (the “Minimum Guaranteed DDG’s Wharfage”;
together with the Minimum Guaranteed Ethanol Wharfage, is defined as the “Minimum Guaranteed Wharfage”).

 

2.  Section 3.04(b) of
the Lease shall be deleted in its entirety and replaced with the following:

 

The Project shall have a two-phased production build out. Phase One
equals 110 million gallon annual capacity; Phase Two equals 110 million gallon
annual capacity; for a total Project annual capacity of 220 million gallons of
ethanol. The Phase One 110 million gallon annual production of ethanol shall
begin (other than for purposes of testing operations) on or before December 31,
2010. All references to the Project in the Lease shall be subject to Section 4.01(b).

 

Notwithstanding the substantial completion and commence production
obligations for Phase One and Phase Two as stated in this Eighth Amendment,
commencing January 1, 2010, Lessee shall pay the Minimum Guaranteed
Wharfage as defined herein, whether or not either phase of the Project is
commenced or completed, and whether or not production has commenced.
Notwithstanding the foregoing the Parties acknowledge that the Phase One
Minimum Guaranteed Wharfage, as defined in the Third Amendment to Lease
Agreement and Reaffirmation of Guaranty, commenced December 1, 2008 and
shall remain due and payable through December 31, 2009.

 

3.  Section 4.01(b) of
the Lease shall be deleted in its entirety and replaced with the following:

 

Lessee shall cause both (i) substantial completion of Phase One of
the Project with a capacity of 110 million gallons of ethanol and (ii) the
commencement of production of  ethanol
from Phase One (other than for the purposes of testing operations) to occur on
or before December 31, 2010.

 

The construction of Phase Two of the Project, with its capacity to
produce an additional 110 million gallons of ethanol, remains a priority
project for Lessee.  However, due to the
present economic conditions as it relates to ethanol, and the bankruptcy of
Lessee, Guarantor, and the latter’s affiliated entities, Lessee is unable to
set a firm date for substantial completion and commence production for Phase
Two.  Lessee and Guarantor do however
agree that following the completion of Phase One, and the 110 million gallon
partially completed ethanol plant identified as Aurora West (NE), Lessee will
not construct any new ethanol facility prior to the construction and the
commencement of production of Phase Two of the Project. Upon Lessee commencing
construction of Phase Two the Parties shall negotiate a new substantial
completion and commence production date for Phase Two, which date shall not
change the commencement of the Minimum Guaranteed Wharfage payments set forth
in Section 3.04(b).  Said date is to
be negotiated in good faith between the Parties and shall not exceed 24 months
following the date the construction of Phase Two is commenced.  Lessee agrees to prosecute with due diligence
all of Lessee’s Work.

 

 

4.  Section 4.01(c) of
the Lease shall be deleted in its entirety.

 

5.  Section 4.09
of the Lease shall be deleted in its entirety and replaced with the following:

 

In the event Lessee fails to meet its obligations under this Article, the
Commission shall be entitled to any remedies the Commission has under Article XI
hereof.  In addition, the Commission may
(but shall not be obligated to), after providing Lessee ninety (90) days prior
written notice and opportunity to cure (unless Lessee commences within such
time to cure such failure and thereafter diligently prosecutes such cure to
completion), take over and complete construction in accordance with the Plans
and Specifications, with such changes as the Commission may, in its reasonable
discretion, deem appropriate (provided the character and scope of the Project
remains materially unchanged), all at the risk, cost and expense of the
Lessee.  If the Commission elects to
complete the construction of the Project, Lessee shall promptly pay to the
Commission the cost of such completion as reasonably estimated by the
Commission, provided that Lessee shall also be liable to reimburse the
Commission on demand for any reasonable costs incurred in excess of such
estimate.

 

If the Commission elects to take
over and complete the Project as provided in the preceding paragraph, it  may assume or reject any contracts
entered into by Lessee in connection with the Project, and may enter into
additional or different contracts for services, labor and for materials
required, in the reasonable judgment of the Commission, to complete
construction, and may pay, compromise and settle all claims in connection
therewith.  Upon the Commission’s
election to take over and complete construction, Lessee hereby assigns all of
its rights in the contract with the contractor and any subcontractors or
material suppliers it may have or enter into in the future in completing the
Project to the Commission, and all its rights in the Plans and Specifications
and all other contracts in connection with the Project, all subject to any
prior assignment to any Mortgagee, and subject to any consents to such
assignment as may be required from third parties, such assignment or
assignments to be accepted and become effective only in the event the
Commission shall proceed with the remedies afforded herein.  Any contract entered into by Lessee shall
provide that it is assignable to any Mortgagee and the Commission, or may be
terminated by any Mortgagee or the Commission, if a Mortgagee exercises its
rights under its Mortgage or the Commission exercises it rights under this
Section, such rights of the Commission being subject and subordinate to such
rights of a Mortgagee.

 

6.  Section 11.01(h) of
the Lease shall be deleted in its entirety and replaced with the following:

 

Lessee fails, by January 1, 2012, together with its Affiliates,
agents, suppliers, contractors and sub-contractors, to actively employ the
equivalent of at least 50 full time workers at the Leased Premises and such
failure shall not be cured within thirty (30) days after written notice thereof
by the Commission to the Lessee;

 

7.  A new
paragraph (d) shall be added to Section 13.06 and read as follows:

 

 

(d)           The parties hereto
recognize and agree that the Event of Default identified in recital C(i) above
has been rendered moot and nullified by this Eight Amendment.  Moreover, the Commission hereby waives as an
Event of Default Lessee’s filing of bankruptcy, as more particularly described
in Recital F above.  Notwithstanding this
specific limited waiver and except as set forth in Section 13.06(e) below,
the Ports expressly does not waive any rights or remedies it has in connection
with any prior failures of Lessee to comply with the terms and conditions of
the Lease, as amended by this Eighth Amendment, despite its failure to take any
action to date with respect to same.

 

8.  A new
paragraph (e) shall be added to Section 13.06 and read as follows:

 

(e)           On January 30,
2009, Val-Fab, Inc. recorded a mechanic’s lien on the Improvements in the
amount of $29,962.00.  On February 10,
2009, Kiewit Energy Company recorded a mechanic’s lien on the Improvements in
the amount of $8,291,215.00.  On February 11,
2009, J.E. Shekell recorded a mechanic’s lien on the Improvements in the amount
of $169,482.26.  On March 6, 2009,
Precision Piping and Mechanical, Inc. recorded a mechanic’s lien on the
Improvements in the amount of $223,177.36. 
On March 6, 2009, National Steel Erection, Inc. recorded a
mechanic’s lien on the Improvements in the amount of $2,433,315.87 (the
aforementioned liens together with any additional mechanics liens currently
recorded with respect to the real property subject of the Lease shall be
referred to as the “Existing Liens”). 
Subject to the provisions of this Section 13.06(e), the Ports
hereby waives the presence of the Existing Liens as an Event of Default.  Provided, however, the Lessee
shall be required to ensure the removal and release of the Existing Liens from
the real property subject of the Lease by the earliest of (i) sixty (60)
days from the date of the entry of an Order confirming a Chapter 11 Plan of the
Lessee, (ii) June 1, 2010, or (iii) the date that the holder of
an Existing Lien commences an action to enforce its lien and/or foreclose or
impair the interests of the Ports in the real property subject of the Lease or
the improvements on the real property. 
To the extent that the Lessee has failed to ensure the removal and
release of the Existing Liens in accordance with this Section 13.06(e),
the presence of the Existing Liens shall become an Event of Default.

 

Lessee
agrees and acknowledges that neither the assumption of the Lease pursuant to Section 365
of the Bankruptcy Code nor this Amendment shall relieve the Lessee from its
obligation to keep the real property subject of the Lease free from any
mechanic’s liens hereinafter arising or asserted.  Further, Lessee agrees, acknowledges, and
affirms all of its obligations under Section 4.06 of the Lease.

 

9.  Paragraph
5 of the Fourth Amendment to the Lease added a new paragraph to Section 1.01
of the Lease.  In part the new paragraph
obligated the Lessee to provide an “As Built
Survey”.  Paragraph 4 of the
Sixth Amendment to the Lease stated that the Parties agreed that the As Built
Survey is to be performed when the project is at a stage when the actual
boundaries are readily identifiable, including all necessary easements and
rights of way, but in no event later than December 31, 2009.  The Parties now agree that the As Built
Survey is to be performed by Lessee and submitted to the Ports within 90 days
of the substantial completion and commence production date of Phase One or April 1,
2011, whichever is the first to occur.

 

 

10.  Guarantor
hereby consents to the amendments to the Lease made by this Eighth Amendment
and agrees that such amendments shall not affect, impair, discharge, relieve or
release Guarantor of its obligations under the terms of the Lease Guaranty, and
that such Lease Guaranty shall be deemed to reference the Lease as amended
hereby.  Guarantor hereby ratifies,
confirms and reaffirms in all respects, the Lease Guaranty, and agrees that
said Lease Guaranty shall continue in full force and effect.

 

11.  The Ports
and Lessee agree that the above and foregoing Recitals are true, correct and
complete and are hereby incorporated and made a part of this Eighth Amendment
as if completely and fully set forth herein. 
Capitalized terms used in this Eighth Amendment without definition shall
have the meanings set forth in the Lease as previously amended, except that any
internal references in the Lease to the word “Lease”
shall mean the Lease, as previously and hereby amended, wherever the context so
requires in order to give meaning to this Eighth Amendment.

 

12.  Lessee
and the Ports hereby affirm, reaffirm and confirm that as of the date hereof
the Lease is in full force and effect and that the Lease has not been modified
or amended (except as provided in this Eighth Amendment).  Lessee hereby affirms, reaffirms and confirms
that except for the Events of Default described in this Eighth Amendment, all
of the Ports’ and Lessee’s obligations accrued to date have been
performed.  Each of Lessee and the Ports
hereby ratify the provisions of the Lease on behalf of themselves and their
respective successors and assigns and agree to attorn and be bound to each
other and their respective successors and assigns as to all of the terms,
covenants and conditions of the Lease, as amended hereby.  This Eighth Amendment shall be incorporated
into and made a part of the Lease and all provisions thereof not expressly
modified or amended hereby shall remain in full force and effect.  Nothing contained in this Eighth Amendment
(except, as applicable, for the specific amendments to the Lease set forth in
this Eighth Amendment) shall release or relieve Lessee or Ports from their
respective obligations or liabilities under the Lease accruing prior to the
date hereof, provided, however, the Lessee agrees and acknowledges that as of
the date of the execution of this Eighth Amendment the Ports has fully complied
with the terms and conditions of the Lease.

 

13.  Except as
expressly amended and modified by this Eighth Amendment the Lease shall
otherwise remain in full force and effect, the parties hereto hereby ratifying
and confirming the same.  This Eighth
Amendment, together with the Lease, is the complete understanding between the
parties and supersedes all other prior agreements and representations
concerning its subject matter.  To the
extent of any inconsistency between the Lease and this Eighth Amendment, the
terms of this Eighth Amendment shall control.

 

14.  This
Eighth Amendment is subject to the terms and conditions of Article X of
the Debtors’ Joint Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code dated as of December 4, 2009
(as amended, modified and/or supplemented, the “Plan”)) and the entry of
the Confirmation Order (as defined in the Plan) by the Bankruptcy Court (i) authorizing
the Lessee’s and the Guarantor’s entry into this Eighth Amendment and
assumption of the Lease and the Guaranty, and (ii) otherwise approving
this Eighth Amendment.

 

15. 
Immediately following the signature page of this Eighth Amendment
is the Addendum of State required contract provisions previously executed by
the Parties.  The Parties 

 

 

reaffirm the covenants and affirmations contained in said Addendum and
incorporate the same into this Eighth Amendment.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Eighth Amendment as of
the day, and month and year first above-written.

 

(Remainder of Page left blank, signature Pages to follow)

 

 

	
   

  	
   

  	
  PORTS
  OF INDIANA

  
	
   

  	
   

  	
  “Ports”

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Jay K. Potesta

  	
   

  	
  By:

  	
  /s/
  Ken Kaczmarek

  
	
   

  	
  Jay
  K. Potesta, Secretary-Treasurer

  	
   

  	
   

  	
  Ken
  Kaczmarek, Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AVENTINE
  RENEWABLE ENERGY-

  
	
   

  	
   

  	
  MT
  VERNON, LLC

  
	
   

  	
   

  	
  “Lessee”

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Christopher A Nichols

  	
   

  	
  /s/
  George T. Henning, Jr.

  
	
  (Signature)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Christopher
  A Nichols - Secretary

  	
   

  	
  George
  T. Henning, Jr.

  
	
  (Printed
  name and title)

  	
   

  	
  (Printed
  name and title) Interim CEO & President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AVENTINE
  RENEWABLE ENERGY

  
	
   

  	
   

  	
  HOLDINGS, INC.

  
	
   

  	
   

  	
  “Guarantor”

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Christopher A Nichols

  	
   

  	
  /s/
  George T. Henning, Jr.

  
	
  (Signature)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Christopher
  A Nichols - Secretary

  	
   

  	
  George
  T. Henning, Jr. 

  
	
  (Printed
  name and title)

  	
   

  	
  (Printed
  name and title) Interim CEO & President

  
	
   

  	
   

  	
   

  
	
  Approved
  as to form and legality

  	
   

  	
   

  
	
  This
  11 day of DEC, 2009

  	
   

  	
   

  
	
   

  	
   

  	
  APPROVED

  
	
  /s/
  [ILLEGIBLE]

  	
   

  	
  DATE:
  

  	
  1-5-2010

  
	
  For
  Gregory F. Zoeller

  	
   

  	
  /s/
  Mitchell E. Daniels, Jr.

  
	
  Attorney
  General of Indiana

  	
   

  	
  For
  The Honorable Mitchell E. Daniels, Jr.

  
	
   

  	
   

  	
  Governor
  of Indiana

  
						

 

This
instrument was prepared by David W. Haniford, General Counsel, Ports of
Indiana, 150 W. Market St. Ste. 100 Indianapolis IN 46204-2845 Telephone: (317)
232-9204.

 

I
affirm, under the penalties for perjury, that I have taken reasonable care to
redact each Social Security number in this document, unless required by
law.  David W. Haniford, Attorney at Law.Exhibit 10.37

 

HOME FEDERAL BANK

Short-Term Incentive Plan

(as amended and restated
effective July 1, 2010)

 

1.             Purpose

 

The
purpose of the Home Federal Bank (“the Bank”) Short-Term Incentive Plan is to
reward senior managers of the Bank for the attainment of corporate objectives.
The Plan is designed to motivate, reward and retain key executives. This Plan
was approved by the Personnel, Compensation and Benefits Committee of the Board
of Directors to be effective July 1, 2010.

 

2.                                       Participation

 

The
Short-Term Incentive Plan is for selected management staff of Home Federal
Bank. Participation in this Plan will be recommended by the Chairman and CEO
and approved by the Personnel, Compensation and Benefits Committee of the Board
of Directors. Participation in any one year does not guarantee the
participation in future years or at the same award level.

 

New
hires to the Corporation and individuals promoted to assignments which by
virtue of their responsibilities may be otherwise eligible to participate in
this Plan may only participate with the approval of the Chairman and CEO. The
Plan Year is the Corporation’s fiscal year.

 

3.                                       Performance
Measure, Award Levels and Award Payment

 

The
annual performance measure, award levels and award payment provisions are identified
in Addendum I. Unless otherwise specifically provided in Addendum I, payment
shall be in a lump sum within 21⁄2 months after the close of the Plan Year.

 

4.                                       Termination
of Employment

 

If
during the fiscal year of the Bank, a plan participant terminates his or her
employment or if the Bank terminates the employment of the plan participant
during that same period, all rights to an Award under the plan for that year
are forfeited. If the employment of a plan participant terminates after the end
of the fiscal year but before the benefits are paid, no such rights are
forfeited. Notwithstanding the provisions hereof, in the event of death,
disability, retirement, or for those individuals who participate in the Plan
and have executed a Change in Control Agreement with the Bank, the provision of
paragraph 5 shall apply.

 

5.                                       Death,
Disability, Retirement, and Change in Control

 

If
a Plan participant dies, becomes disabled, retires, or is entitled to benefits
under a Change in Control Agreement during a Plan Year, the plan participant or
the plan participant’s designated beneficiary shall receive an incentive
payment for the partial year based on the number of months from the start of
the Plan Year (or if later, from the first day of the month coincident with or
next following the participant’s date of participation in the Plan) to the last
day of the month in which the death, disability, retirement, or the Date of
Termination as defined in the Change in Control Agreement, occurs, but only to
the extent that an incentive payment is otherwise earned for the Plan Year.

 

6.                                       Beneficiary
Designation

 

Any
incentive payment following the death of a participant shall be paid to such
person or persons, or other legal entity, as the participant may have
designated in writing and delivered to Home Federal Bank. The participant may
from time to time revoke or change any such designation by writing to Home
Federal Bank. If there is no unrevoked designation on file at the participant’s
death, or if the person or persons designated therein shall have all
pre-deceased the participant, such distribution shall be made to the
participant’s estate.

 

 

7.                                       Administration
and Interpretation of the Plan

 

The
Plan shall be administered by the Chairman and CEO of the Bank whose actions
will be subject to the approval of the Personnel, Compensation and Benefits
Committee in material matters. The role of the Committee shall be to approve
the Home Federal Bank’s Short-Term Incentive Plan, approve the annual target
goal, approve Plan participants and (at the end of the Plan Year) approve the
distribution of the incentive payment to all participants. The Plan
Administrator is charged with the effective administration of the Plan
including the interpretation in instances where the Plan is silent.

 

The
Personnel, Compensation and Benefits Committee reserves the right, from time to
time, to prescribe rules and regulations at such time and in such manner
as it may deem appropriate.

 

8.                                       Amendment/Termination
of Plan

 

The
Plan may be amended and shall be interpreted by the Personnel, Compensation and
Benefits Committee, and its interpretation shall be final and binding on
participant and all other parties of interest. The Plan may be terminated at
any time as the Personnel, Compensation and Benefits Committee of the Board of
Directors approves. Plan participants will be notified as soon as possible in
the event of an amendment or termination occurs.

 

9.                                       Employment

 

The
Plan is not intended as an Employment Agreement. The Plan does not restrict the
rights of the Bank to terminate the employment of a Plan participant at any
time and without any obligation under the Plan.

 

10.                                 Legal
Requirements

 

The
Plan will be administered in accordance with all federal, state and local
statutory requirements.

 

11.                                 Effective
Date

 

This
Amendment and Restatement becomes effective July 1, 2010.

 

*  *  *  *  *

 

The
undersigned, an authorized executive officer of the Bank, certifies that this
is the Home Federal Bank Amended and Restated Short-Term Incentive Plan amended
and restated effective July 1, 2010.

 

	
   

  	
  HOME
  FEDERAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  

  
	
   

  	
   

  	
  Curtis
  L. Hage

  
	
   

  	
  Its:

  	
  Chairman
  and CEO

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