Document:

ex10_5.htm

    NOTICE
OF FINAL AGREEMENT

    

    
      	
              Principal

              $50,000

            	
              Loan
      Date

              01-06-2004

            	
              Maturity

              01-01-2009

            	
              Loan
      No

              0000000018

            	
              Call/
      Coll

            	
              Account

              0010255221

            	
              Officer

              ***

            	
              Initials

            
	
              References
      in the shaded area are for Lender's use only and do not limit the
      applicability of this document to any particular loan or
item.

              Any
      item above containing " * " has been omitted due to text length
      limitations.

            

    

    

    

    
      	
              Borrower:      ZNOMICS,
      INC.

                                      2611
      SW 3RD ST STE 200

                                      PORTLAND,
      OR 97201

            	
              Lender:         Washington
      Mutual Bank, FA

                                      Business
      Lending – Seattle

                                      3200
      Southwest Freeway, Suite HOU1547

                                      Houston,
      TX 77027

            
	
              ORAL
      AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
      FORBEAR

              FROM
      ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
      LAW.

              

              By
      signing this document each Party acknowledges receipt of the above notice.
      In addition (and not as a limitation on the legal effect of the
      notice), by signing this document each Party represents and agrees that:
      (a) The written
      Loan Agreement represents the final agreement between the Parties,
      (b) There are no
      unwritten oral agreements between the Parties, and (c) The written Loan
      Agreement may not be contradicted by evidence of any prior.
      contemporaneous, or subsequent oral agreements or understanding of the
      Parties. As used in this Notice, the following terms have the following
      meanings:

              

              Loan.
      The term “Loan” means the following described loan: a Variable Rate
      Nondisclosure Loan to a Corporation for $50,000.00 due on January 1,
      2009. The reference rate (annual interest rate, adjusted daily, published
      from time to time in The Wall Street Journal as the "Prime Rate" in
      the "Money Rates" section, as of any date of determination, currently
      4.000%) is added to the margin of 2.000%. resulting in an initial
      rate of 6.000.

              

              Loan
      Agreement. The term "Loan Agreement" means one or more promises,
      promissory notes, agreements, undertakings, security agreements,
      deeds of trust or other documents, or commitments, or any combination of
      those actions or documents, relating to the Loan, including without
      limitation the following:

              

              LOAN
      DOCUMENTS

               

            

    

    
      	
              Corporate
      Resolution: ZNOMICS, INC.

              Promissory
      Note

              WA
      Commercial Guaranty: ROGER D CONE

              Disbursement
      Request and Authorization

              Notice
      of Final Agreement

               

            	
              Business
      Loan Agreement

              WA
      Commercial Guaranty: RICHARD A SESSIONS

              USA
      Patriot Act - IMPORTANT INFORMATION ABOUT

              PROCEDURES
      FOR OPENING A NEW ACCOUNT

               

            

    

    

    Parties.
The term "Parties" means Washington Mutual Bank, FA and any and all entities or
individuals who are obligated to repay the loan or have pledged property as
security for the Loan, including without limitation the following:

    

    Borrower:
ZNOMICS, INC.

    Guarantor
1 : RICHARD A SESSIONS

    Guarantor
2: ROGER D CONE

     

    Each
Party who signs below, other than Washington Mutual Bank, FA, acknowledges,
represents, and warrants to Washington Mutual Bank, FA that it has
received, read and understood this Notice of Final Agreement. This Notice is
dated January 6, 2004.

    

    
       

      
        	BORROWER:	 
	 	 
	ZNOMICS,
      INC.	 
	 	 
	By:  /s/ Richard A
      Sessions    	By:  /s/ Roger D. Cone
	Richard
      A Sessions, CEO of Znomics, Inc.	Roger D. Cone,
      President/CSO of Znomics, Inc.
	 	 
	GUARANTOR:	 
	 	 
	X  /s/ Richard A Sessions	 
	 	 
	GUARANTOR:	 
	 	 
	X  /s/ Roger D. Cone	 
	 	 
	LENDER:	 
	 	 
	WASHINGTON MUTUAL
      BANK, FA	 
	 	 
	X  /s/ Jennifer Randsy	 
	Authorized
      Signer	 

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    BUSINESS
LOAN AGREEMENT

    

    
      	
              Principal

              $50,000

            	
              Loan
      Date

              01-06-2004

            	
              Maturity

              01-01-2009

            	
              Loan
      No

              0000000018

            	
              Call/
      Coll

            	
              Account

              0010255221

            	
              Officer

              ***

            	
              Initials

            
	
              References
      in the shaded area are for Lender's use only and do not limit the
      applicability of this document to any particular loan or
item.

              Any
      item above containing " * " has been omitted due to text length
      limitations.

            

    

    

    

    
      	
              Borrower:      ZNOMICS,
      INC.

                                      2611
      SW 3RD ST STE 200

                                      PORTLAND,
      OR 97201

            	
              Lender:          Washington
      Mutual Bank, FA

                                      Business
      Lending – Seattle

                                      3200
      Southwest Freeway, Suite HOU1547

                                      Houston,
      TX 77027

            

    

    

    

    THIS
BUSINESS LOAN AGREEMENT dated January 6, 2004, is made and executed between
ZNOMICS, INC. ("Borrower") and Washington Mutual Bank, FA ("Lender") on the
following terms and conditions. Borrower has received prior commercial loans
from Lender or has applied to Lender for a commercial loan or loans or
other financial accommodations, including those which may be described on any
exhibit or schedule attached to this Agreement ("Loan"). Borrower
understands and agrees that: (A) in granting, renewing, or extending any Loan,
Lender is relying upon Borrower's representations, warranties, and
agreements as set forth in this Agreement; (B) the granting, renewing, or
extending of any Loan by Lender at all times shall be subject to Lender's
sole judgment and discretion; and (C) all such Loans shall be and remain
subject to the terms and conditions of this Agreement.

    

    TERM. This Agreement shall be
effective as of January 6, 2004, and shall continue in full force and effect
until such time as all of Borrower's Loans in favor of Lender have been
paid in full, including principal, interest, costs, expenses, attorneys' fees,
and other fees and charges, or until such time as the parties may agree in
writing to terminate this Agreement.

    

    CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's
obligation to make the initial Advance and each subsequent Advance under
this Agreement shall be subject to the fulfillment to Lender's satisfaction
of all of the conditions set forth in this Agreement and in the
Related Documents.

    

    Loan Documents. Borrower shall
provide to Lender the following documents for the Loan: (1) the Note;
(2) guaranties; (3) together with all such Related Documents as Lender
may require for the Loan; all in form and substance satisfactory to Lender and
Lender's counsel.

    

    Borrower's Authorization.
Borrower shall have provided in form and substance satisfactory to Lender
properly certified resolutions, duly authorizing the execution and delivery
of this Agreement, the Note and the Related Documents. In addition, Borrower
shall have provided

    such
other resolutions, authorizations, documents and instruments as Lender or its
counsel, may require.

    

    Payment of Fees and Expenses.
Borrower shall have paid to Lender all fees, charges, and other expenses which
are then due and payable as specified in this Agreement or any Related
Document.

    

    Representations and
Warranties. The representations and warranties set forth in this
Agreement, in the Related Documents, and in any document or certificate
delivered to Lender under this Agreement are true and correct.

    

    No Event of Default. There
shall not exist at the time of any Advance a condition which would constitute an
Event of Default under this Agreement or under any Related
Document.

    

    REPRESENTATIONS AND
WARRANTIES. Borrower represents and warrants to Lender, as of the date of
this Agreement, as of the date of each disbursement of loan proceeds, as of
the date of any renewal, extension or modification of any Loan, and at all times
any lndebtedness exists:

    

    Organization. Borrower is a
corporation for profit which is, and at all times shall be, duly organized,
validly existing, and in good standing under and by virtue of the laws of
the State of Delaware. Borrower is duly authorized to transact business in all
other states in which Borrower is doing business, having obtained all
necessary filings, governmental licenses and approvals for each state in which
Borrower is doing business. Specifically, Borrower is, and at all times
shall be, duly qualified as a foreign corporation in all states in which the
failure to so qualify would have a material adverse effect on its business
or financial condition. Borrower has the full power and authority to own
its properties and to transact the business in which it is presently
engaged or presently proposes to engage. Borrower maintains an office
at 261 1 SW 3RD ST STE 200, PORTLAND, OR 97201. Unless Borrower has
designated otherwise in writing, the principal office is the office at which
Borrower keep its books and records including its records concerning the
Collateral. Borrower will notify Lender prior to any change in the location
of Borrower's state of organization or any change in Borrower's name. Borrower
shall do all things necessary to preserve and to keep in full force and
effect its existence, rights and privileges, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to Borrower and
Borrower's business activities.

    

    Assumed Business Names. Borrower has
filed or recorded all documents or filings required by law relating to all
assumed business names used by Borrower. Excluding the name of Borrower,
the following is a complete list of all assumed business names under which
Borrower does business: None.

    

    Authorization. Borrower's
execution, delivery, and performance of this Agreement and all the Related
Documents have been duly authorized by all necessary action by Borrower and
do not conflict with, result in a violation of, or constitute a default under
(1) any provision of Borrower's articles of incorporation or organization,
or bylaws, or any agreement or other instrument binding upon Borrower
or (2) any law, governmental regulation, court decree, or order applicable
to Borrower or to Borrower's properties.

    

    Financial Information. Each of
Borrower's financial statements supplied to Lender truly and completely
disclosed Borrower's financial condition as of the date of the statement,
and there has been no material adverse change in Borrower's financial condition
subsequent to the date of the most recent financial statement supplied to
Lender. Borrower has no material contingent obligations except as disclosed
in such financial statements.

    

    Legal Effect. This Agreement
constitutes, and any instrument or agreement Borrower is required to give under
this Agreement when delivered will constitute legal, valid, and binding
obligations of Borrower enforceable against Borrower in accordance with their
respective terms.

    

    Properties. Except as
contemplated by this Agreement or as previously disclosed in Borrower's
financial statements or in writing to Lender and as accepted by Lender, and
except for property tax liens for taxes not presently due and payable, Borrower
owns and has good title to all of Borrower's properties free and clear of
all Security Interests, and has not executed any security documents or financing
statements relating to such properties. All of Borrower's properties are
titled in Borrower's legal name, and Borrower has not used or filed a
financing statement under any other name for at least the last five (5)
years.

    

    Hazardous Substances. Except
as disclosed to and acknowledged by Lender in writing, Borrower represents and
warrants that: (1) During the period of Borrower's ownership of Borrower's
Collateral, there has been no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance by any person
on, under, about or from any of the Collateral. (2) Borrower has no knowledge
of, or reason to believe that there has been (a) any breach or violation of any
Environmental Laws; (b) any use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance on, under,
about or from the Collateral by any prior owners or occupants of any of the
Collateral; or (c) any actual or threatened litigation or claims of any kind by
any

    person
relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent
or other authorized user of any of the Collateral shall use, generate,
manufacture, store, treat, dispose of or release any Hazardous Substance on,
under, about or from any of the Collateral; and any such activity shall be
conducted in compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation all Environmental
Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to
make such inspections and tests as Lender may deem appropriate to determine
compliance of the Collateral with this section of the Agreement. Any inspections
or tests made by Lender shall be at Borrower's expense and for Lender's purposes
only and shall not be

    construed
to create any responsibility or liability on the part of Lender to Borrower or
to any other person. The representations and warranties contained herein are
based on Borrower's due diligence in investigating the Collateral for hazardous
waste and Hazardous Substances. Borrower hereby (1) releases and waives any
future claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (2) agrees to
indemnify and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Agreement or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release of a hazardous waste or substance on the
Collateral. The provisions of this section of the Agreement, including the
obligation to indemnify, shall survive the payment of the lndebtedness and the
termination, expiration or satisfaction of this Agreement and shall not be
affected by Lender's acquisition of any interest in any of the Collateral,
whether by foreclosure or otherwise.

    

    Litigation and Claims. No
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Borrower is pending or threatened,
and no other event has occurred which may materially adversely affect Borrower's
financial condition or properties, other than litigation, claims, or other
events, if any, that have been disclosed to and acknowledged by Lender in
writing.

    

    Taxes. To the best of
Borrower's knowledge, all of Borrower's tax returns and reports that are or were
required to be filed, have been

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BUSINESS
LOAN AGREEMENT

    

    
      	
              Loan
      No: 0000000018

            	
              (Continued)

            	
              Page
      2

            

    

    

    filed,
and all taxes, assessments and other governmental charges have been paid in
full, except those presently being or to be contested by Borrower in good
faith in the ordinary course of business and for which adequate reserves have
been provided.

    

    Lien Priority. Unless
otherwise previously disclosed to Lender in writing, Borrower has not entered
into or granted any Security Agreements, or permitted the filing or
attachment of any Security lnterests on or affecting any of the Collateral
directly or indirectly securing repayment of Borrower's Loan and Note, that
would be prior or that may in any way be superior to Lender's Security lnterests
and rights in and to such Collateral.

    

    Binding Effect. This
Agreement, the Note, all Security Agreements (if any), and all Related Documents
are binding upon the signers thereof, as well as upon their successors,
representatives and assigns, and are legally enforceable in accordance with
their respective terms.

    

    AFFIRMATIVE COVENANTS.
Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect, Borrower will:

    

    Notices of Claims and
Litigation.
Promptly inform Lender in writing of (1) all material adverse
changes in Borrower's financial condition, and (2) all existing and all
threatened litigation, claims, investigations, administrative proceedings or
similar actions affecting Borrower or any Guarantor which could materially
affect the financial condition of Borrower or the financial condition of any
Guarantor.

    

    Financial Records. Maintain
its books and records in accordance with GAAP, applied on a consistent basis,
and permit Lender to examine and audit Borrower's books and records at all
reasonable times.

    

    Financial Statements. Furnish
Lender with such financial statements and other related information at such
frequencies and in such detail as Lender may reasonably
request.

    

    Additional Information.
Furnish such additional information and statements, as Lender may request from
time to time.

    

    Insurance. Maintain fire and
other risk insurance, public liability insurance, and such other insurance as
Lender may require with respect to Borrower's properties and operations, in
form, amounts, coverages and with insurance companies acceptable to Lender.
Borrower, upon request of Lender, will deliver to Lender from time to time
the policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled or diminished
without at least ten (10)
days prior written notice to Lender. Each insurance policy also
shall include an endorsement providing that coverage in favor of Lender will not
be impaired in any way by any act, omission or default of Borrower or any
other person. In connection with all policies covering assets in which Lender
holds or is offered a security interest for the Loans, Borrower will
provide Lender with such lender's loss payable or other endorsements as Lender
may require.

    

    Insurance Reports. Furnish to
Lender, upon request of Lender, reports on each existing insurance policy
showing such information as Lender may reasonably request, including
without limitation the following: (1) the name of the insurer;
(2) the risks insured; (3) the amount of the policy; (4) the properties
insured; (5) the then current property values on the basis of which insurance
has been obtained, and the manner of determining those values; and (6) the
expiration date of the policy. In addition, upon request of Lender (however
not more often than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value or
replacement cost of any Collateral. The cost of such appraisal shall be paid by
Borrower.

    

    Guaranties. Prior to
disbursement of any Loan proceeds, furnish executed guaranties of the Loans in
favor of Lender, executed by the guarantors named below, on Lender's forms,
and in the amounts and under the conditions set forth in those
guaranties.

    

    
      	
              Names of
      Guarantors

            	
              Amounts

            
	
              RICHARD
      A SESSIONS

            	
              $50,000.00

            
	
              ROGER
      D CONE

            	
              $50,000.00

            

    

    

    Other Agreements. Comply with
all terms and conditions of all other agreements, whether now or hereafter
existing, between Borrower and any other party and notify Lender
immediately in writing of any default in connection with any other such
agreements.

    

    Loan Proceeds. Use all Loan
proceeds solely for Borrower's business operations, unless specifically
consented to the contrary by Lender in writing.

    

    Taxes, Charges and Liens. Pay
and discharge when due all of its indebtedness and obligations, including
without limitation all assessments, taxes, governmental charges, levies and
liens, of every kind and nature, imposed upon Borrower or its properties,
income, or profits, prior to the date on which penalties would attach, and
all lawful claims that, if unpaid, might become a lien or charge upon any of
Borrower's properties, income, or profits.

    

    Performance. Perform and
comply, in a timely manner, with all terms, conditions, and provisions set forth
in this Agreement, in the Related Documents, and in all other instruments
and agreements between Borrower and Lender. Borrower shall notify Lender
immediately in writing of any default in connection with any
agreement.

    

    Operations. Maintain executive
and management personnel with substantially the same qualifications and
experience as the present executive and management personnel; provide
written notice to Lender of any change in executive and management personnel;
conduct its business affairs in a reasonable and prudent
manner.

    

    Environmental Studies.
Promptly conduct and complete, at Borrower's expense, all such investigations,
studies, samplings and testings as may be requested by Lender or any
governmental authority relative to any substance, or any waste or by-product of
any substance defined as toxic or a hazardous substance under applicable
federal, state, or local law, rule, regulation, order or directive, at or
affecting any property or any facility owned, leased or used by
Borrower.

    

    Compliance with Governmental
Requirements. Comply with all laws, ordinances, and regulations, now or
hereafter in effect, of all governmental authorities applicable to the
conduct of Borrower's properties, businesses and operations, and to the use or
occupancy of the Collateral, including without limitation, the Americans
With Disabilities Act. Borrower may contest in good faith any such law,
ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Borrower has notified Lender
in writing prior to doing so and so long as, in Lender's sole opinion,
Lender's interests in the Collateral are not jeopardized. Lender
may require Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.

    

    Inspection. Permit employees
or agents of Lender at any reasonable time to inspect any and all Collateral for
the Loan or Loans and Borrower's other properties and to examine or audit
Borrower's books, accounts, and records and to make copies and memoranda
of Borrower's books, accounts, and records. If Borrower now or at any time
hereafter maintains any records (including without limitation computer
generated records and computer software programs for the generation of such
records) in the possession of a third party, Borrower, upon request of
Lender, shall notify such party to permit Lender free access to such records at
all reasonable times and to provide Lender with copies of any records it
may request, all at Borrower's expense.

    

    Compliance Certificates.
Unless waived in writing by Lender, provide Lender at least annually, with a
certificate executed by Borrower's chief financial officer, or other
officer or person acceptable to Lender, certifying that the representations and
warranties set forth in this Agreement are true and correct as of the date
of the certificate and further certifying that, as of the date of the
certificate, no Event of Default exists under this Agreement.

    

    Environmental Compliance and
Reports. Borrower shall comply in all respects with any and all
Environmental Laws; not cause or permit to exist, as a result of an
intentional or unintentional action or omission on Borrower's part or on the
part of any third party, on property owned and/or occupied by Borrower, any
environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions
of a permit issued by the appropriate federal, state or local
governmental authorities; shall furnish to Lender promptly and in any event
within thirty (30) days after receipt thereof a copy of any notice,
summons, lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional
or unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to
the environment and/or other natural resources.

    

    Additional Assurances. Make,
execute and deliver to Lender such promissory notes, mortgages, deeds of trust,
security agreements, assignments, financing statements, instruments,
documents and other agreements as Lender or its attorneys may reasonably request
to evidence and secure the Loans and to perfect all Security
Interests.

    

    LENDER'S EXPENDITURES. If any
action or proceeding is commenced that would materially affect Lender's interest
in the Collateral or if Borrower fails to comply with any provision of this
Agreement or any Related Documents, including but not limited to Borrower's
failure t discharge or pay when due any amounts Borrower is required to
discharge or pay under this Agreement or any Related Documents, Lender on
Borrower's behalf may (but shall not be obligated to) take any action that
Lender deems appropriate, including but not limited to discharging
or paying all taxes, liens, security interests, encumbrances and other
claims, at any time levied or placed on any Collateral and paying all costs
for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid
by Lender to the date of repayment by Borrower. All such expenses will
become a part of the Indebtedness and, at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and
be apportioned among and be payable with any installment payments to become
due during either (1) the term of any applicable insurance policy;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BUSINESS
LOAN AGREEMENT

    

    
      	
              Loan
      No: 0000000018

            	
              (Continued)

            	
              Page
      3

            

    

    

    or (2)
the remaining term of the Note; or (C) be treated as a balloon payment which
will be due and payable at the Note's maturity.

    

    NEGATIVE COVENANTS. Borrower
covenants and agrees with Lender that while this Agreement is in effect,
Borrower shall not, without the prior written consent of
Lender:

    

    lndebtedness
and Liens. (1) Except for trade debt incurred in the normal course of business
and indebtedness to Lender contemplated by this Agreement, create, incur or
assume indebtedness for borrowed money, including capital leases, (2) sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3)
sell with recourse any of Borrower's accounts, except to
Lender.

    

    Continuity of
Operations. (1) Engage in any business
activities substantially different than those in which Borrower is presently
engaged, (2) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change its name, dissolve or transfer or
sell Collateral out of the ordinary course of business, or (3) pay any
dividends on Borrower's stock (other than dividends payable in its
stock), provided, however that notwithstanding the foregoing, but only so
long as no Event of Default has occurred and is continuing or would result
from the payment of dividends, if Borrower is a "Subchapter S Corporation" (as
defined in the Internal Revenue Code of 1986, as amended), Borrower may pay
cash dividends on its stock to its shareholders from time to time in amounts
necessary to enable the shareholders to pay income taxes and make estimated
income tax payments to satisfy their liabilities under federal and state law
which arise solely from their status as Shareholders of a Subchapter S
Corporation because of their ownership of shares of Borrower's stock,
or purchase or retire any of Borrower's outstanding shares or alter or
amend Borrower's capital structure.

    

    Loans, Acquisitions and
Guaranties. (1) Loan, invest in or advance money or assets, (2)
purchase, create or acquire any interest in any other enterprise or entity,
or (3) incur any obligation as surety or guarantor other than in the ordinary
course of business.

    

    CESSATION OF ADVANCES. If
Lender has made any commitment to make any Loan to Borrower, whether under this
Agreement or under any other agreement, Lender shall have no obligation to make
Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is
in default under the terms of this Agreement or any of the Related
Documents or any other agreement that Borrower or any Guarantor has
with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or
becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of
any Guarantor, or in the value of any Collateral securing any Loan; or (Dl
any Guarantor seeks, claims or otherwise attempts to limit, modify
or

    revoke
such Guarantor's guaranty of the Loan or any other loan with Lender; or (E)
Lender in good faith deems itself insecure, even though no Event of Default
shall have occurred.

    

    RIGHT OF SETOFF. To the extent
permitted by applicable law. Lender reserves a right of setoff in all Borrower's
accounts with Lender (whether checking, savings, or some other account).
This includes all accounts Borrower holds jointly with someone else and all
accounts Borrower may open in the future. However, this does not include
any IRA or Keogh accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and
all such accounts.

    

    DEFAULT. Each of the following
shall constitute an Event of Default under this Agreement:

    

    Payment Default. Borrower
fails to make any payment when due under the Loan.

    

    Other Defaults. Borrower fails
to comply with or to perform any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents or to comply
with or to perform any term, obligation, covenant or condition contained in any
other agreement between Lender and Borrower.

    

    Default in Favor of Third
Parties. Borrower or any Grantor defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's or any Grantor's property or Borrower's or any Grantor's
ability to repay the Loans or perform their respective obligations under this
Agreement or any of the Related Documents.

    

    False Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower or
on Borrower's behalf under this Agreement or the Related Documents is false
or misleading in any material respect, either now or at the time made or
furnished or becomes false or misleading at any time
thereafter.

    

    Insolvency. The dissolution or
termination of Borrower's existence as a going business, the insolvency of
Borrower, the appointment of a receiver for any part of Borrower's
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

    

    Defective Collateralization. This
Agreement or any of the Related Documents ceases to be in full force and effect
(including failure of any collateral document to create a valid and
perfected security interest or lien) at any time and for any
reason.

    

    Creditor or Forfeiture Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of
Borrower or by any governmental agency against any collateral securing the
Loan. This includes a garnishment of any of Borrower's accounts, including
deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for
the dispute.

    

    Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the
lndebtedness or any Guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any Guaranty of the lndebtedness.
In the event of a death, Lender, at its option, may, but shall not be
required to, permit the Guarantor's estate to assume unconditionally
the obligations arising under the guaranty in a manner satisfactory to
Lender, and, in doing so, cure any Event of Default. Change in Ownership.
Any change in ownership of twenty-five percent (25%) or more of the common stock
of Borrower.

    

    Adverse Change. A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the Loan is
impaired. Insecurity. Lender in good faith believes itself
insecure.

    

    Right to Cure. If any default,
other than a default on Indebtedness, is curable and if Borrower or Grantor, as
the case may be, has not been given a notice of a similar default within
the preceding twelve (12) months, it may be cured (and no Event of Default will
have occurred) if Borrower or Grantor, as the case may be, after receiving
written notice from Lender demanding cure of such default: (1) cure the
default within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiate steps which Lender deems in
Lender's sole discretion to be sufficient to cure the default and
thereafter continue and complete all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.

    

    EFFECT OF AN EVENT OF DEFAULT.
If any Event of Default shall occur, except where otherwise provided in this
Agreement or the Related Documents, all commitments and obligations of
Lender under this Agreement or the Related Documents or any other agreement
immediately will terminate (including any obligation to make further Loan
Advances or disbursements), and, at Lender's option, all indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic
and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity,
or otherwise. Except as may be prohibited by applicable law, all of
Lender's

    rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude
pursuit of any other remedy, and an election to make expenditures or to take
action to perform an obligation of Borrower or of any Grantor shall not
affect Lender's right to declare a default and to exercise its rights and
remedies.

    

    MISCELLANEOUS PROVISIONS. The
following miscellaneous provisions are a part of this Agreement:

    

    Amendments. This Agreement,
together with any Related Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this Agreement. No
alteration of or amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged or bound by
the alteration or amendment.

    

    Attorneys' Fees; Expenses.
Borrower agrees to pay upon demand all of Lender's costs and expenses, including
Lender's attorneys' fees and Lender's legal expenses, incurred in
connection with the enforcement of this Agreement. Lender may hire or pay
someone else to help enforce this Agreement, and Borrower shall pay the
costs and expenses of such enforcement. Costs and expenses include
Lender's attorneys' fees and legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including effor.ts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Borrower also shall pay all court costs and such
additional fees as may be directed by the court.

    

    Caption Headings. Caption
headings in this Agreement are for convenience purposes only and are not to be
used to interpret or define the provisions of this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    BUSINESS
LOAN AGREEMENT

    
      	
              Loan
      No: 0000000018

            	
              (Continued)

            	
              Page
      4

            

    

    

    

    Consent to Loan Participation.
Borrower agrees and consents to Lender's sale or transfer, whether now or later,
of one or more participation interests in the Loan to one or more
purchasers, whether related or unrelated to Lender. Lender may provide, without
any limitation whatsoever, to any one or more purchasers, or potential
purchasers, any information or knowledge Lender may have about Borrower or
about any other matter relating to the Loan, and Borrower hereby waives any
rights to privacy Borrower may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation interests, as
well as all notices of any repurchase of such participation interests.
Borrower also agrees that the purchasers of any such participation interests
will be considered as the absolute owners of such interests in the Loan and
will have all the rights granted under the participation agreement or
agreements governing the sale of such participation interests. Borrower
further waives all rights of offset or counterclaim that it may have now or
later against Lender or against any purchaser of such a participation
interest and unconditionally agrees that either Lender or such purchaser
may enforce Borrower's obligation under the Loan irrespective of the
failure or insolvency of any holder of any interest in the Loan.
Borrower further agrees that the purchaser of any such participation
interests may enforce its interests irrespective of any personal claims
or defenses that Borrower may have against Lender.

    

    Governing
Law. This Agreement will be governed by, construed and enforced in accordance
with federal law and the laws of the State of

    Washington.
This Agreement has been accepted by Lender in the State of
Washington.

    

    No Waiver by Lender. Lender
shall not be deemed to have waived any rights under this Agreement unless such
waiver is given in writing and signed by Lender. No delay or omission on
the part of Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver by Lender of a provision of this
Agreement shall not prejudice or constitute a waiver of Lender's right otherwise
to demand strict compliance with that provision or any other provision of
this Agreement. No prior waiver by Lender, nor any course of dealing
between Lender and Borrower, or between Lender and any Grantor, shall constitute
a waiver of any of Lender's rights or of any of Borrower's or any Grantor's
obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.

    

    Notices. Subject to applicable
law, and except for notice required or allowed by law to be given in another
manner, any notice required to be given under this Agreement shall be given
in writing, and shall be effective when actually delivered, when actually
received by telefacsimile (unless otherwise required by law), when
deposited with a nationally recognized overnight courier, or, if mailed,
when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near
the beginning of this Agreement. Any party may change its address for
notices under this Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party's
address. For notice purposes, Borrower agrees to keep Lender informed at
all times of Borrower's current address. Subject to applicable law, and except
for notice required or allowed by law to be given in another manner, if
there is more than one Borrower, any notice given by Lender to any Borrower is
deemed to be notice given to all Borrowers.

    

    Severability. If a court of
competent jurisdiction finds any provision of this Agreement to be illegal,
invalid, or unenforceable as to any circumstance, that finding shall not
make the offending provision illegal, invalid, or unenforceable as to any other
circumstance. If feasible, the offending provision shall be considered
modified so that it becomes legal, valid and enforceable. If the offending
provision cannot be so modified, it shall be considered deleted from this
Agreement. Unless otherwise required by law, the illegality, invalidity, or
unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this
Agreement.

    

    Subsidiaries and Affiliates of
Borrower. To the extent the context of any provisions of this Agreement
makes it appropriate, including without limitation any representation,
warranty or covenant, the word "Borrower" as used in this Agreement shall
include all of Borrower's subsidiaries and affiliates. Notwithstanding the
foregoing however, under no circumstances shall this Agreement be construed to
require Lender to make any Loan or other financial accommodation to any of
Borrower's subsidiaries or affiliates.

    

    Successors and Assigns. All
covenants and agreements contained by or on behalf of Borrower shall bind
Borrower's successors and assigns and shall inure to the benefit of Lender
and its successors and assigns. Borrower shall not, however, have the right to
assign Borrower's rights under this Agreement or any interest therein,
without the prior written consent of Lender.

    

    Survival of Representations and
Warranties. Borrower understands and agrees that in making the Loan,
Lender is relying on all representations, warranties, and covenants made by
Borrower in this Agreement or in any certificate or other instrument delivered
by Borrower to Lender under this Agreement or the Related Documents.
Borrower further agrees that regardless of any investigation made
by Lender, all such representations, warranties and covenants will survive
the making of the Loan and delivery to Lender of the Related Documents,
shall be continuing in nature, and shall remain in full force and effect until
such time as Borrower's lndebtedness shall be paid in full, or until this
Agreement shall be terminated in the manner provided above, whichever is the
last to occur.

    

    Time is of the Essence. Time
is of the essence in the performance of this Agreement.

    

    DEFINITIONS. The following
capitalized words and terms shall have the following meanings when used in this
Agreement. Unless specifically stated to the contrary, all references to
dollar amounts shall mean amounts in lawful money of the United States of
America. Words and terms used in the singular shall include the plural, and
the plural shall include the singular, as the context may require. Words and
terms not otherwise defined in this Agreement shall have the meanings
attributed to such terms in the Uniform Commercial Code. Accounting words and
terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement:

    

    Advance. The word "Advance"
means a disbursement of Loan funds made, or to be made, to Borrower or on
Borrower's behalf on a line of credit or multiple advance basis under the
terms and conditions of this Agreement.

    

    Agreement. The word
"Agreement" means this Business Loan Agreement, as this Business Loan Agreement
may be amended or modified from time to time, together with all exhibits
and schedules attached to this Business Loan Agreement from time to
time.

    

    Borrower. The word "Borrower"
means ZNOMICS, INC., and all other persons and entities signing the Note in
whatever capacity.

    

    Collateral. The word
"Collateral" means all property and assets granted as collateral security for a
Loan, whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in the
form of a security interest, mortgage, collateral mortgage, deed of trust,
assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage,
chattel trust, factor's lien, equipment trust, conditional sale, trust
receipt, lien, charge, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest
whatsoever, whether created by law, contract, or otherwise.

    

    Environmental Laws. The words
"Environmental Laws" mean any and all state, federal and local statutes,
regulations and ordinances relating to the protection of human health or
the environment, including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other
applicable state or federal laws, rules, or regulations adopted pursuant
thereto.

    

    Event of Default. The words
"Event of Default" mean any of the events of default set forth in this Agreement
in the default section of this Agreement.

    

    GAAP. The word "GAAP" means
generally accepted accounting principles.

    

    Grantor. The word "Grantor"
means each and all of the persons or entities granting a Security Interest in
any Collateral for the Loan, including without limitation all Borrowers
granting such a Security Interest.

    

    Guarantor. The word
"Guarantor" means any guarantor, surety, or accommodation party of any or all of
the Loan.

    

    Guaranty. The word "Guaranty"
means the guaranty from Guarantor to Lender, including without limitation a
guaranty of all or part of the Note.

    

    Hazardous Substances. The
words "Hazardous Substances" mean materials that, because of their quantity,
concentration or physical, chemical or infectious characteristics, may cause or
pose a present or potential hazard to human health or the environment
when improperly used, treated, stored, disposed of, generated,
manufactured, transported or otherwise handled. The words
"Hazardous Substances" are used in their very broadest sense and include
without limitation any and all hazardous or toxic substances, materials
or waste as defined by or
listed under the Environmental Laws. The term "Hazardous Substances" also
includes, without limitation, petroleum and petroleum by-products or any
fraction thereof and asbestos.

    

    Indebtedness. The word
"Indebtedness" means the indebtedness evidenced by the Note or Related
Documents, including all principal and interest together with all other
indebtedness and costs and expenses for which Borrower is responsible under this
Agreement or under any of the Related Documents.

    

    Lender. The word "Lender"
means Washington Mutual Bank, FA, its successors and assigns.

    

    Loan. The word "Loan” means
any and all loans and financial accommodations from Lender to Borrower whether
now or hereafter existing, and however evidenced, including without limitation
those loans and financial accommodations described herein or described
on any exhibit or schedule attached to this Agreement from time to
time.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    BUSINESS
LOAN AGREEMENT

    
      	
              Loan
      No: 0000000018

            	
              (Continued)

            	
              Page
      5

            

    

    

    Note. The word "Note" means
the Note executed by ZNOMICS, INC. in the principal amount of $50,000.00 dated
January 6, 2004, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and substitutions for the
note or credit agreement.

    

    Permitted Liens. The words
"Permitted Liens" mean (1) liens and security interests securing Indebtedness
owed by Borrower to Lender; (2) liens for taxes, assessments, or similar
charges either not yet due or being contested in good faith; (3) liens of
materialmen, mechanics, warehousemen, or carriers, or other like liens
arising in the ordinary course of business and securing obligations which are
not yet delinquent; (4) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in
the ordinary course of business to secure indebtedness outstanding on ,the
date of this Agreement or permitted to be incurred under the paragraph of
this Agreement titled "Indebtedness and Liens"; (5) liens and security interests
which, as of the date of this Agreement, have been disclosed to and
approved by the Lender in writing; and (6) those liens and security interests
which in the aggregate constitute an immaterial and insignificant monetary
amount with respect to the net value of Borrower's assets.

    

    Related Documents. The words
"Related Documents" mean all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages, and all other
instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Loan.

    

    Security Agreement. The words
"Security Agreement" mean and include without limitation any agreements,
promises, covenants, arrangements, understandings or other agreements,
whether created by law, contract, or otherwise, evidencing, governing,
representing, or creating a Security Interest.

    

    Security Interest. The words
"Security Interest" mean, without limitation, any and all types of collateral
security, present and future, whether in the form of a lien, charge,
encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop
pledge, chattel mortgage, collateral chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien or title
retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by
law, contract, or otherwise.

    

    BORROWER
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND
BORROWER AGREES TO ITS TERMS. THlS BUSINESS LOAN AGREEMENT IS DATED JANUARY
6, 2004.

     

    
      	BORROWER:	 
	 	 
	ZNOMICS,
      INC.	 
	 	 
	By:  /s/ Richard A
      Sessions    	By:  /s/ Roger D. Cone
	Richard
      A Sessions, CEO of Znomics, Inc.	Roger D. Cone,
      President/CSO of Znomics, Inc.
	 	 
	LENDER:	 
	 	 
	WASHINGTON
      MUTUAL BANK, FA	 
	 	 
	By: ___________________
Authorized
      Signature	 

    

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    PROMISSORY
NOTE

    

    
      	
              Principal

              $50,000

            	
              Loan
      Date

              01-06-2004

            	
              Maturity

              01-01-2009

            	
              Loan
      No

              0000000018

            	
              Call/
      Coll

            	
              Account

              0010255221

            	
              Officer

              ***

            	
              Initials

            
	
              References
      in the shaded area are for Lender's use only and do not limit the
      applicability of this document to any particular loan or
item.

              Any
      item above containing " * " has been omitted due to text length
      limitations.

            

    

    

    

    
      	
              Borrower:     ZNOMICS,
      INC.

                                      2611
      SW 3RD ST STE 200

                                      PORTLAND,
      OR 97201

            	
              Lender:          Washington
      Mutual Bank, FA

                                      Small
      Business Lending – Seattle

                                      3200
      Southwest Freeway, Suite HOU1547

                                      Houston,
      TX 77027

               

            	 
	PrincipalAmount:$
      50,000.00	
              Initial
      Rate: 6.000%

            	
              Date
      of Note: January 6, 2004

            

    

    

    
    

    PROMISE
TO PAY. ZNOMICS. INC. ("Borrower") promises to pay to Washington Mutual Bank, FA
("Lender"), or order, in lawful money of the United States of America. the
principal amount of Fifty Thousand & 00/100
Dollars ($50,000.00). together with interest on the unpaid
principal balance from January 6, 2004, until paid in full.

    

    PAYMENT.
Subject to any payment changes resulting from changes in the Index, Borrower
will pay this loan in 69 principal payments of $833.33 each and one final
principal and interest payment of $837.84. Borrower's first principal payment is
due February 1. 2004, and all subsequent principal payments are due on the same
day of each month after that. In addition, Borrower will pay regular monthly
payments of all accrued unpaid interest due as of each payment date,
beginning February 1, 2004, with all subsequent interest payments to be due on
the same day of each month after that. Borrower's final payment due January
1, 2009, will be for all principal and all accrued interest not yet paid. Unless
otherwise agreed or required by applicable law, payments will be applied first
to accrued unpaid interest, then to principal, and any remaining amount to any
unpaid collection costs and late charges. The annual interest rate for this Note
is computed on a 3651360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender's address shown above
or at such other place as Lender may designate in writing.

    

    VARIABLE INTEREST RATE. The
interest rate on this Note is subject to change from time to time based on
changes in an independent index which is the annual interest rate, adjusted
daily, published from time to time in The Wall Street Journal as the "Prime
Rate" in the "Money Rates" section, as of any date of determination (the
"lndex"). The lndex is not necessarily the lowest rate charged by Lender on its
loans. If the lndex becomes unavailable during the term of this loan,
Lender may designate a substitute index after notice to Borrower. Lender will
tell Borrower the current lndex rate upon Borrower's request. The interest
rate change will not occur more often than each day. Borrower understands
that Lender may make loans based on other rates as well. The lndex currently is 4.000% per
annum. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 2.000 percentage points over the Index, resulting in an
initial rate of 6.000% per annum. NOTICE:
Under no circumstances will the interest rate on this Note be more than the
maximum rate allowed by applicable law.

    

    PREPAYMENT. Borrower may pay
without penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments under the payment
schedule. Rather, early payments will reduce the principal balance due and
may result in Borrower's making fewer payments. Borrower agrees not to send
Lender payments marked "paid in full", "without recourse", or similar
language. If Borrower sends such a payment, Lender may accept it
without losing any of Lender's rights under this Note, and Borrower will
remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or
other payment instrument that indicates that the payment
constitutes "payment in full" of the amount owed or that is tendered with
other conditions or limitations or as full satisfaction of a disputed amount
must be mailed or delivered to: Commercial Loan Servicing-Houston, HOU
1547, P.O. Box 2485 Houston, TX 77252-2406.

    

    LATE CHARGE. If a payment is 10 days or more late, Borrower
will be charged 5.000% of the
unpaid portion of the regularly scheduled payment.

    

    INTEREST AFTER DEFAULT. Upon
default, including failure to pay upon final maturity, Lender, at its option,
may, if permitted under applicable law, increase the variable interest rate
on this Note to 8.000 percentage points over the Index. The interest rate will
not exceed the maximum rate permitted by applicable law.

    

    DEFAULT. Each of the following
shall constitute an event of default ("Event of Default") under this
Note:

    

    Payment Default. Borrower
fails to make any payment when due under this Note.

    

    Other Defaults. Borrower fails
to comply with or to perform any other term, obligation, covenant or condition
contained in this Note or in any of the related documents or to comply with
or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

    

    Default in Favor of Third
Parties. Borrower or any Grantor defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other
agreement, in favor of any other creditor or person that may materially affect
any of Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the related
documents.

    

    False Statements. Any
warranty, representation or statement made or furnished to Lender by Borrower or
on Borrower's behalf under this Note or the related documents is false or
misleading in any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.

    

    Insolvency. The dissolution or
termination of Borrower's existence as a going business, the insolvency of
Borrower, the appointment of a receiver for any part of Borrower's
property, any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

    

    Creditor or Forfeiture
Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of
Borrower or by any governmental agency against any collateral securing the
loan. This includes a garnishment of any of Borrower's accounts, including
deposit accounts, with Lender. However, this Event of Default shall not
apply if there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor
or forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for
the dispute.

    

    Events Affecting Guarantor.
Any of the preceding events occurs with respect to any Guarantor of any of the
indebtedness or any Guarantor dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the
indebtedness evidenced by this Note. In the event of a death, Lender, at
its option, may, but shall not be required to, permit the Guarantor's estate
to assume unconditionally the obligations arising under the guaranty in a
manner satisfactory to Lender, and, in doing so, cure any Event
of Default.

    

    Change In Ownership. Any
change in ownership of twenty-five percent (26%) or more of the common stock of
Borrower.

    

    Adverse Change. A material adverse change
occurs in Borrower's financial condition, or Lender believes the prospect of
payment or performance of this Note is impaired.

    

    Insecurity. Lender in good faith
believes itself insecure.

    

    Cure Provisions. if any
default, other than a default in payment is curable and if Borrower has not been
given a notice of a breach of the same provision of this Note within the
preceding twelve (12) months, it may be cured (and no event of default will have
occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (1) cures the default within fifteen (15) days; or
(2) if the cure requires more than fifteen (15) days, immediately initiates
steps which Lender deems in Lender's sole discretion to be sufficient to
cure the default and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as reasonably
practical.

    

    LENDER'S RIGHTS. Upon default,
Lender may declare the entire unpaid principal balance on this Note and all
accrued unpaid interest immediately due, and then Borrower will pay that
amount.

    

    ATTORNEYS' FEES; EXPENSES.
Lender may hire or pay someone else to help collect this Note if Borrower does
not pay. Borrower will pay Lender that amount. This includes, subject to
any limits under applicable law, Lender's attorneys' fees and Lender's legal
expenses, whether or not there is a lawsuit, including attorneys' fees,
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), and appeals. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums
provided by law.

    

    GOVERNING
LAW. This Note will be governed by, construed and enforced in accordance with
federal law and the laws of the State of

    Washington.
This Note has been accepted by Lender in the State of Washington.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    PROMISSORY
NOTE

    
      	
              Loan
      No: 0000000018

            	
              (Continued)

            	
              Page
      2

            

    

    

    

    DISHONORED ITEM FEE. Borrower will pay a fee to
Lender of $20.00 if Borrower makes a payment on Borrower's loan and the check
or preauthorized charge with which Borrower pays is later
dishonored.

    

    RIGHT OF SETOFF. To the extent
permitted by applicable law, Lender reserves a right of setoff in all Borrower's
accounts with Lender (whether checking, savings, or some other account).
This includes all accounts Borrower holds jointly with someone else and all
accounts Borrower may open in the future. However, this does not include
any IRA or Keogh accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and
all such accounts.

    

    SUCCESSOR INTERESTS. The terms
of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal
representatives, successors and assigns, and shall inure to the benefit of
Lender and its successors and assigns.

    

    GENERAL PROVISIONS. Lender may
delay or forgo enforcing any of its rights or remedies under this Note without
losing them. Borrower and any other person who signs, guarantees or
endorses this Note, to the extent allowed by law, waive presentment, demand for
payment, and notice of dishonor. Upon any change in the terms of this Note,
and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall
be released from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom
the modification is made. The obligations under this Note are joint and
several.

    

    PRIOR
TO SIGNING THlS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THlS
NOTE, INCLUDING THE VARIABLE

    INTEREST
RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

    

    BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THlS PROMISSORY NOTE.

    

    
      	BORROWER:	 
	 	 
	ZNOMICS,
      INC.	 
	 	 
	By:  /s/ Richard A
      Sessions    	By:  /s/ Roger D. Cone
	Richard
      A Sessions, CEO of Znomics, Inc.	Roger D. Cone,
      President/CSO of Znomics, Inc.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    CORPORATE
RESOLUTION TO BORROW / GRANT COLLATERAL

    

    
      	
              Principal

              $50,000

            	
              Loan
      Date

              01-06-2004

            	
              Maturity

              01-01-2009

            	
              Loan
      No

              0000000018

            	
              Call/
      Coll

            	
              Account

              0010255221

            	
              Officer

              ***

            	
              Initials

            
	
              References
      in the shaded area are for Lender's use only and do not limit the
      applicability of this document to any particular loan or
item.

              Any
      item above containing " * " has been omitted due to text length
      limitations.

            

    

     

    
      	
              Borrower:     ZNOMICS,
      INC.

                                      2611
      SW 3RD ST STE 200

                                      PORTLAND,
      OR 97201

            	
              Lender:          Washington
      Mutual Bank, FA

                                      Small
      Business Lending – Seattle

                                      3200
      Southwest Freeway, Suite HOU1547

                                      Houston,
      TX 77027

               

            

    

    

    I,
THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

    

    THE CORPORATION'S EXISTENCE.
The complete and correct name of the Corporation is ZNOMICS, INC.
("Corporation"). The Corporation is a corporation for profit which is, and
at all times shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of the State of Delaware. The Corporation
is duly authorized to transact business in all other states in which the
Corporation is doing business, having obtained all necessary filings,
governmental licenses and approvals for each state in which the Corporation is
doing business. Specifically, the Corporation is, and at all times shall
be, duly qualified as a foreign corporation in all states in which the failure
to so qualify would have a material adverse effect on its business or
financial condition. The Corporation has the full power and authority to own
its properties and to transact the business in which it is presently
engaged or presently proposes to engage. The Corporation maintains an office
at 261 1 SW 3RD ST STE 200, PORTLAND, OR 97201. Unless the Corporation has
designated otherwise in writing, the principal office is the office at
which the Corporation keeps its books and records. The Corporation will notify
Lender prior to any change in the location of the Corporation's state of
organization or any change in the Corporation's name. The Corporation shall do
all things necessary to preserve and to keep in full force and effect its
existence, rights and privileges, and shall comply with all regulations, rules,
ordinances, statutes, orders and decrees of any governmental or
quasi-governmental authority or court applicable to the Corporation and the
Corporation's business activities.

    

    RESOLUTIONS ADOPTED. At a
meeting of the Directors of the Corporation, or if the Corporation is a close
corporation having no Board of Directors then at a meeting of the
Corporation's shareholders, duly called and held on , at which a quorum was
present and voting, or by other duly authorized action in lieu of a
meeting, the resolutions set forth in this Resolution were adopted.

    

    OFFICERS. The following named
persons are officers of ZNOMICS, INC.:

    

    
      	
              NAMES

            	
              TITLES

            	
              AUTHORIZED

            	
              ACTUAL
      SIGANTURES

            
	
              RICHARD
      A SESSIONS

            	
              CEO

            	
              Y

            	
              /s/
      Richard A
      Sessions

            
	
              ROGER
      D CONE

            	
              PRESIDENT/
      CSO

            	
              Y

            	
              /s/
      Roger D
    Cone

            

    

    

    ACTIONS AUTHORIZED. Any two
(2) of the authorized persons listed above may enter into any agreements of any
nature with Lender, and those agreements will bind the Corporation.
Specifically, but without limitation, any two (2) of such authorized persons are
authorized, empowered, and directed to do the following for and on behalf
of the Corporation:

    

    Borrow Money. To borrow, as a
cosigner or otherwise, from time to time from Lender, on such terms as may be
agreed upon between the Corporation and Lender, such sum or sums of money
as in their judgment should be borrowed, without limitation.

    

    Execute Notes. To execute and
deliver to Lender the promissory note or notes, or other evidence of the
Corporation's credit accommodations, on Lender's forms, at such rates of
interest and on such terms as may be agreed upon, evidencing the sums of money
so borrowed or any of the Corporation's indebtedness to Lender, and also to
execute and deliver to Lender one or more renewals,
extensions, modifications, refinancings, consolidations, or substitutions
for one or more of the notes, any portion of the notes, or any other evidence
of credit accommodations.

    

    Grant Security. To mortgage,
pledge, transfer, endorse, hypothecate, or otherwise encumber and deliver to
Lender any property now or hereafter belonging to the Corporation or in
which the Corporation now or hereafter may have an interest, including without
limitation all real property and all personal property (tangible or
intangible) of the Corporation, as security for the payment of any loans or
credit accommodations so obtained, any promissory notes so executed
(including any amendments to or modifications, renewals, and extensions of
such promissory notes), or any other or further indebtedness of the Corporation
to Lender at any time owing, however the same may be evidenced. Such
property may be mortgaged, pledged, transferred, endorsed, hypothecated or
encumbered at the time such loans are obtained or such indebtedness is
incurred, or at any other time or times, and may be either in addition to or in
lieu of any property theretofore mortgaged, pledged, transferred, endorsed,
hypothecated or encumbered.

    

    Execute Security Documents. To
execute and deliver to Lender the forms of mortgage, deed of trust, pledge
agreement, hypothecation agreement, and other security agreements and
financing statements which Lender may require and which shall evidence the terms
and conditions under and pursuant to which such liens and encumbrances, or
any of them, are given; and also to execute and deliver to Lender any other
written instruments, any chattel paper, or any other collateral, of any kind or
nature, which Lender may deem necessary or proper in connection with or
pertaining to the giving of the liens and encumbrances. Notwithstanding the
foregoing, any one of the above authorized persons may execute, deliver, or
record financing statements.

    

    Negotiate Items. To draw,
endorse, and discount with Lender all drafts, trade acceptances, promissory
notes, or other evidences of indebtedness payable to or belonging to the
Corporation or in which the Corporation may have an interest, and either to
receive cash for the same or to cause such proceeds to be credited to the
Corporation's account with Lender, or to cause such other disposition of
the proceeds derived therefrom as they may deem advisable.

    

    Further Acts. In the case of
lines of credit, to designate additional or alternate individuals as being
authorized to request advances under such lines, and in all cases, to do
and perform such other acts and things, to pay any and all fees and costs, and
to execute and deliver such other documents and agreements as the officers
may in their discretion deem reasonably necessary or proper in order to carry
into effect the provisions of this Resolution.

    

    ASSUMED BUSINESS NAMES. The
Corporation has filed or recorded all documents or filings required by law
relating to all assumed business names used by the Corporation. Excluding
the name of the Corporation, the following is a complete list of all assumed
business names under which the Corporation does business: None.

    

    NOTICES TO LENDER. The
Corporation will promptly notify Lender in writing at Lender's address shown
above (or such other addresses as Lender may designate from time to time)
prior to any (A) change in the Corporation's name; (B) change in the
Corporation's assumed business name(s); (C) change in the management of the
Corporation; (D) change in the authorized signer(s); (E) change in the
Corporation's principal office address; (F) change in the Corporation's
state of organization; (G) conversion of the Corporation to a new or
different type of business entity; or (H) change in any other aspect of the
Corporation that directly or indirectly relates to any agreements between
the Corporation and Lender. No change in the Corporation's name or state of
organization will take effect until after Lender has received
notice

    

    ADDITIONAL ACTIONS AUTHORIZED -
INTEREST RATE SWAP PROVISIONS. (A) A "Swap Transaction" shall mean an
interest rate swap, interest rate cap, interest rate floor, interest rate
collar, Treasury lock ,
Treasury cap, Treasury
floor, Treasury collar, barrier option, forward rate agreement, cross
currency swap, foreign exchange forward contract, options on any of the
foregoing, or combinations of any of the foregoing.

    

    (B) (This
section (B) to apply to the borrower only.) TO enter into any Swap Transaction
with Lender, to take all steps necessary to effectuate and perform such
Swap Transaction, including but not limited to the execution and delivery to
Lender of an ISDA Master Agreement and/or Foreign Exchange Transaction
Master Agreement, together with any and all exhibits and annexes thereto as may
be requested by Lender, the execution and delivery of confirmations of such
Swap Transaction, and the execution and delivery of all documents and agreements
required pursuant to any of the foregoing; to mortgage, pledge, transfer,
endorse, hypothecate, or otherwise encumber and deliver to Lender
any property now or hereafter belonging to the Corporation or in which the
Corporation now or hereafter may have an interest, including
without limitation all real property and all personal property (tangible or
intangible) of the Corporation, as security for the payment of any indebtedness
of the Corporation to the Lender arising out of a Swap Transaction, however
the same may be evidenced. Such property may be mortgaged, pledged,
transferred, endorsed, hypothecated or encumbered at the time the Swap
Transaction is entered into, or at any other time or times, and may be
either in addition to or in lieu of any property theretofore mortgaged, pledged,
transferred, endorsed, hypothecated or encumbered.

    

    (C) (This
section (C) to apply to the guarantor only.) For the avoidance of doubt, the
phrase "other financial accommodations to Borrower from Lender" used in the
subparagraph entitled "Guaranty" (within the "Actions Authorized" paragraph,
above) shall be deemed to include Lender's entrance into any Swap
Transaction with the Borrower, however the same may be evidenced.

    

    CERTIFICATION CONCERNING OFFICERS AND
RESOLUTIONS. The officers named above are duly elected, appointed, or
employed by or for the Corporation, as the case may be, and occupy the
positions set opposite their respective names. This Resolution now stands of
record on the books of the Corporation, is in full force and effect, and
has not been modified or revoked in any manner whatsoever.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    CORPORATE
RESOLUTION TO BORROW / GRANT COLALTERAL

    

    
      	
              Loan
      No: 0000000018

            	
              (Continued)

            	
              Page2

            

    

    

    

    NO CORPORATE SEAL. The
Corporation has no corporate seal, and therefore, no seal is affixed to this
Resolution.

    

    CONTINUING VALIDITY. Any and
all acts authorized pursuant to this Resolution and performed prior to the
passage of this Resolution are hereby ratified and approved. This
Resolution shall be continuing, shall remain in full force and effect and Lender
may rely on it until written notice of its revocation shall have been
delivered to and received by Lender at Lender's address shown above (or such
addresses as Lender may designate from time to time). Any such notice shall
not affect any of the Corporation's agreements or commitments in effect at the
time notice is given.

    

    IN
TESTIMONY WHEREOF, I have hereunto set my hand and attest that the signatures
set opposite the names listed above are their
genuine signatures.

    

    I
have read all the provisions of this Resolution, and I personally and on behalf
of the Corporation certify that all statements and representations

    made
in this Resolution are true and correct. This Corporate Resolution to Borrow I
Grant Collateral is dated 01/05/04
.

    

    THlS
RESOLUTION IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THlS RESOLUTION IS AND
SHALL CONSTITUTE AND HAVE THE

    EFFECT
OF A SEALED INSTRUMENT ACCORDING TO LAW.

     

    
      	CERTIFIED TO
      AND ATTESTED BY:
	 
	By:  /s/ Richard A Sessions
      (seal)
	Corporate
      Secretary of Znomics, Inc.

    

     

    

    NOTE:
If the officers signing this Resolution are designated by the foregoing document
as one of the officers authorized to act on the Corporation's behalf, it is
advisable to have this Resolution signed by at least one non-authorized
officer of the Corporation.EX-10.30

FIRST AMENDMENT 

TO AMENDED AND RESTATED LOAN AGREEMENT

This First Amendment to Amended and Restated Loan Agreement (“Amendment”) is made as of April
16, 2008, by and among THE ANDERSONS, INC., an Ohio corporation (the “Borrower”), the financial
institutions signatory hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association
(“U.S. Bank”), in its capacity as Agent for the Lenders (in such capacity, the “Agent”) and as one
of the Lenders.

RECITAL

This Amendment is made with respect to the Amended and Restated Loan Agreement made as of
February 21, 2008, (as amended, modified, supplemented, renewed or restated from time to time, the
“Agreement“). Capitalized terms that are not defined in this Amendment shall have the meanings
assigned to them in the Agreement. The Borrower and the Lenders desire (a) to increase the total
amount of the Line of Credit A Loan Commitments to $655,000,000 (with the same maturity date as
presently provided therefore), (b) to increase the total amount of the Line of Credit B Loan
Commitments to $247,190,229 (with a shortened maturity date 180 days after the date of this
Amendment), and (c) to amend certain other terms of the Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the terms and conditions contained in
this Amendment, and of any loans or extensions of credit or other financial accommodations
heretofore, now or hereafter made to or for the benefit of Borrower, the parties agree as follows:

1. Section 1.1 of the Agreement, General Definitions, is hereby amended by
amending and adding the following definitions as follows:

"Agent’s Letter” shall mean, collectively, the letter agreement between
Borrower and the Agent dated February 21, 2008 and the letter agreement between
Borrower and the Agent dated April 16, 2008.

"Applicable Margin” shall mean

(a) until the Reset Date referred to in the following Subsection (b), with
respect to Swing Line Advances, Line of Credit A Advances or Line of Credit B
Advances which are Daily Reset LIBOR Rate Loans, Base Rate Loans or LIBOR Rate
Loans, Commitment Fees for the Line of Credit A Loan Commitments and the Commitment
Fees for the Line of Credit B Loan Commitments (“Non-Use Fees”), Standby LC Fees and
Commercial LC Fees, the rates per annum as set forth in the tables and paragraph
below:

1

Swing Line Advances, Line of Credit A Advances,

Commitment Fees Line A and Commitment Fees Line B:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financial	 	 	 	 	 	 	 	 	 	Non-Use Fees
	 	 	 	 	 	 	Daily Reset LIBOR Rate &	 	 
	Performance Level	 	Base Rate	 	LIBOR Rate	 	Line A and Line B
	N/A
	 	 	0.0	%	 	 	1.000	%	 	 	0.150	%

Line of Credit B Advances:

	 	 	 	 	 	 	 	 	 
	Financial	 	 	 	 
	Performance Level	 	Base Rate	 	LIBOR Rate
	N/A
	 	 	0.0	%	 	 	1.500	%

Letter of Credit Fees:

	 	 	 	 	 	 	 	 	 
	Financial	 	 	 	 
	Performance Level	 	Standby LC Fees	 	Commercial LC Fees
	N/A
	 	 	1.000	%	 	 	0.450	%

(b) beginning with the Reset Date referred to below, with respect to Swing
Line Advances or Line of Credit A Advances which are Daily Reset LIBOR Rate Loans,
Base Rate Loans or LIBOR Rate Loans, Commitment Fees for the Line of Credit A Loan
Commitments (“Non-Use Fees”), Standby LC Fees and Commercial LC Fees, the rates per
annum as set forth in the tables and paragraph below, for the then applicable
Financial Performance Level:

Swing Line Advances, Line of Credit A Advances, Commitment Fees Line A:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financial	 	 	 	 	 	 	 	 	 	Non-Use Fees
	 	 	 	 	 	 	Daily Reset LIBOR Rate & LIBOR	 	 
	Performance Level	 	Base Rate	 	Rate	 	Line A
	Level 1
	 	 	0.0	%	 	 	1.000	%	 	 	0.225	%
	Level 2
	 	 	0.0	%	 	 	0.850	%	 	 	0.200	%
	Level 3
	 	 	0.0	%	 	 	0.700	%	 	 	0.175	%
	Level 4
	 	 	0.0	%	 	 	0.550	%	 	 	0.150	%
	Level 5
	 	 	0.0	%	 	 	0.500	%	 	 	0.125	%
	Level 6
	 	 	0.0	%	 	 	0.500	%	 	 	0.100	%

2

Letter of Credit Fees:

	 	 	 	 	 	 	 	 	 
	Financial	 	 	 	 
	Performance Level	 	Standby LC Fees	 	Commercial LC Fees
	Level 1

	 	 	1.000	%	 	 	0.450	%
	Level 2

	 	 	0.850	%	 	 	0.395	%
	Level 3

	 	 	0.700	%	 	 	0.340	%
	Level 4

	 	 	0.550	%	 	 	0.285	%
	Level 5

	 	 	0.500	%	 	 	0.230	%
	Level 6

	 	 	0.500	%	 	 	0.175	%

The Agent will review Borrower’s financial performance as of each fiscal
quarter end, beginning with fiscal quarter end June 30, 2008, after its receipt of
Borrower’s financial statements and Compliance Certificate as of the end of such
fiscal quarter, and will confirm Borrower’s determination as to whether Borrower’s
Financial Performance Level based on such fiscal quarter end is Level 1, Level 2,
Level 3, Level 4, Level 5 or Level 6. As so confirmed by the Agent, Borrower’s
Financial Performance Level will determine the Applicable Margin effective for Swing
Line Advances, Line of Credit A Advances, the Commitment Fees for the Line of Credit
A Loan Commitments, Standby LC Fees and Commercial LC Fees for the three month
period beginning on the first Business Day of the third month following the end of
such fiscal quarter if the Agent receives such quarter end financial statements
prior to the last five (5) Business Days of the second month following the end of
such fiscal quarter. If the Agent receives such quarter end financial statements
during or after the last five (5) Business Days of the second month following the
end of such fiscal quarter (but prior to the end of the third month following the
end of such fiscal quarter), any reduction in the Applicable Margin will be delayed
until the tenth day of the month following the month in which the Agent receives
such quarter end financial statements, but any increase in the Applicable Margin
will be effective as of the first Business Day of the third month following the end
of such fiscal quarter. If the Agent does not receive such quarter end statements
prior to the end of the third month following the end of such fiscal quarter,
Borrower’s Financial Performance Level shall be deemed to be Level 1 beginning with
the tenth day of the fourth month following the end of such fiscal quarter and shall
remain at Level 1 until the 15th Business Day after such financial
statements are received by the Agent and a determination by the Agent that a
different Financial Level shall apply during the remainder of the three month
period. Notwithstanding the forgoing, the first date that the Applicable Margin
shall be determined in accordance with this Subsection (b), shall be the later of
the (a) the date determined in accordance with the foregoing, and (b) October 14,
2008 (the “Reset Date”).

"Asset Coverage Ratio” shall mean, for any date of determination, the
ratio of (a) the sum of (i) the aggregate principal amount of the Line of Credit A
Loan Liabilities, (ii) the aggregate amount of the LC Obligations, (iii) the
aggregate principal amount of the Line of Credit B Loan Liabilities, and (iv) the
aggregate principal amount of all other Indebtedness of Borrower, on a consolidated
basis, other than permitted Priority Debt, Subordinated Debt and the indebtedness
evidenced by the Debenture Bonds; divided by (b) the sum of the amounts of
Borrower’s (i) accounts receivable, (ii) deposits and investments permitted under
Section 8.8(a), (b) or (c) (net of any checks or other debits outstanding),
(iii) net margin accounts and (iv) inventory, modified, in the case of inventory, to
include all current and non-current commodity derivative assets and liabilities
recorded on the Company’s balance sheet in accordance with GAAP, in each case, as
they would normally appear on Borrower’s balance sheet according to GAAP.

"Debenture Bonds” means those certain Debentures described outstanding
on the date hereof which Debentures were issued pursuant to that certain Indenture
dated as of October 1, 1985, as supplemented from time to time.

"Hedged Inventory” shall mean Inventory consisting of commodities that
are hedged against price fluctuation using traditionally recognized methods of
hedging, including, but not limited to, futures contracts, placed through a
recognized commodities broker adjusted to include all current and non-current
commodity derivative assets and liabilities recorded on the Company’s balance sheet
in accordance with GAAP.

"Indebtedness” with respect to any Person means, at any time, without
duplication,

(a) (i) its liabilities for borrowed money and (ii) its redemption obligations
in respect of preferred stock which is or upon the occurrence of certain events may
be mandatorily redeemable by the holders thereof at any time prior to the payment in
full of the Liabilities;

(b) its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable arising in the ordinary course of business
but including all liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);

(c) (i) all liabilities appearing on its balance sheet in accordance with GAAP
in respect of capital leases and (ii) all liabilities which would appear on its
balance sheet in accordance with GAAP in respect of synthetic leases assuming such
synthetic leases were accounted for as capital leases;

(d) all liabilities for borrowed money secured by any lien or security interest
with respect to any property owned by such Person (whether or not it has assumed or
otherwise become liable for such liabilities);

(e) all its liabilities in respect of letters of credit or instruments serving
a similar function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money); and

(f) any guaranty of such Person with respect to liabilities of a type described
in any of clauses (a) through (e) hereof.

Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is deemed
to be extinguished under GAAP.

"Line of Credit A Loan Commitment” shall mean as to any Lender, such
Lender’s Pro Rata Percentage of $655,000,000, as set forth opposite such Lender’s
name under the heading “Line of Credit A Loan Commitments” on Schedule A-2,
subject to Assignment and Acceptance in accordance with Section 10.23, and
as such amount may be reduced or terminated from time to time pursuant to
Sections 2.3(c), 2.8 or 9.1; and "Line of Credit A Loan Commitments”
shall mean collectively, the Line of Credit A Loan Commitments for all the Lenders.

"Line of Credit B Loan Commitment” shall mean as to any Lender, such
Lender’s Pro Rata Percentage of $247,190,229, as set forth opposite such Lender’s
name under the heading “ Line of Credit B Loan Commitments” on Schedule A-2,
subject to Assignment and Acceptance in accordance with Section 10.23, and
as such amount may be reduced or terminated from time to time pursuant to
Sections 2.3(c), 2.8 or 9.1 and as such amount may be increased from time to
time pursuant to Section 10.31(b); and "Line of Credit B Loan
Commitments” shall mean collectively, the Line of Credit B Loan Commitments for
all the Lenders.

"Margin Accounts” shall mean, collectively, all Commodity Accounts and
all Commodity Contracts and (to the extent not included in Commodity Accounts or
Commodity Contracts) all Swap Contracts and cash forward contracts maintained by
Borrower and its consolidated subsidiaries with respect to Hedged Inventory.

"Maturity Date” shall mean, as applicable, the earlier of: (a) as to
the Swing Line or the Line of Credit A and LC Obligations, September 30, 2009; (b)
as to the Line of Credit B, October 14, 2008; and (c) in all cases, the earlier date
of termination in whole of the Commitments pursuant to Sections 2.3(c), 2.8 or
9.1.

"Subordinated Debt” shall mean the consolidated, subordinated,
unsecured debt of Borrower that is subordinated to the Liabilities in accordance
with a subordination agreement or subordination agreements, in form and substance
acceptable to the Required Lenders.

2. Notwithstanding the terms of Section 2.1.2 of the Agreement, Line of Credit
A, Section 2.1.3 of the Agreement, Line of Credit B, Section 2.3 of the
Agreement, Prepayments; Termination of the Commitments, and other terms of the Agreement,
until the Maturity Date with respect to the Line of Credit B, Advances shall be made and repayments
shall be applied so that the aggregate amounts outstanding under the Line of Credit A and the Line
of Credit B are substantially in proportion to one another (for example, if an Advance is
requested, 655,000,000/902,190,229 multiplied by the amount of the Advance shall be made under the
Line of Credit A and $247,190,229/902,190,229 multiplied by the amount of the Advance shall be
made under the Line of Credit B). For the convenience of the Agent exact proportions need not be
maintained at all times, but whenever an imbalance is needed for the convenience of the Agent, the
Agent shall elect, when feasible, to leave a proportionately higher amount outstanding under the
Line of Credit B.

3. Notwithstanding the terms of Subsection (b) of Section 7.1 of the Agreement,
Financial and Other Information, Borrower shall cause to be furnished to the Agent (with
copies to the other Lenders), from time to time and in a form acceptable to the Agent, as soon as
practicable and in any event within forty five (45) days after and as of the end of each monthly
accounting period through August of 2008, a report of Borrower’s Asset Coverage Ratio, using a
truncated form of Compliance Certificate in substantially the form attached to this Amendment as
Exhibit 7A-2.

4. The Compliance Certificate referred to in Subsection (b) of Section 7.1 of the
Agreement, Financial and Other Information, shall be in substantially the form attached to
this Amendment as Exhibit 7A-2.

5. Section 8.2 of the Agreement, Consolidations, Mergers or Acquisitions,
shall be amended to read as follows:

8.2 Consolidations, Mergers or Acquisitions. Borrower and its
consolidated subsidiaries shall not enter into or execute any agreement to
recapitalize or consolidate with, merge with, or otherwise acquire the assets or
properties of any other Person except: (a) Borrower may acquire the assets of its
consolidated subsidiaries or merge with its consolidated subsidiaries, provided that
Borrower is the survivor of any such merger; (b) Borrower may acquire Inventory in
the ordinary course of business, and (c) Borrower may make other acquisitions or
enter into other mergers, not to exceed $100,000,000 in the aggregate of exchange or
transfer value in fiscal year 2008 of Borrower, and not to exceed $75,000,000 in the
aggregate of exchange or transfer value in any fiscal year of Borrower thereafter,
provided, in each case that Borrower is the survivor of any such merger.

3

6. Section 8.5 of the Agreement, Disposition of Property, shall be amended to
read as follows:

8.5 Disposition of Property. Borrower and its consolidated
subsidiaries shall not sell, lease, transfer or otherwise dispose of any of their
properties, assets or rights in excess of the aggregate amount of $10,000,000 in
book value in any fiscal year of Borrower, except: (a) Inventory may be sold by
Borrower and its consolidated subsidiaries in the ordinary course of Borrower’s
business; and (b) Borrower and its consolidated subsidiaries may dispose of obsolete
or worn out property in the ordinary course of business (which in any event shall be
deemed to include the sale or other disposition of unneeded railcars in the ordinary
course of the business of Borrower and its consolidated subsidiaries).

7. Section 8.8 of the Agreement, Deposits, Investments, Advances or Loans,
shall be amended to read as follows:

8.8 Deposits, Investments, Advances or Loans. Borrower and its
consolidated subsidiaries shall not make or permit to exist deposits, investments,
advances or loans (other than deposits, investments, advances or loans existing on
the date of the execution of this Agreement and disclosed to the Agent in writing on
or prior to such date) in or to Affiliates or any other Person, except: (a)
investments in short term direct obligations of the United States Government (b)
investment grade corporate and state and local government securities (Rated BBB- or
better by Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc. or rated BAA3 or better by Moody’s Investors Service, Inc.); (c)
certificates of deposit or demand deposit accounts issued by or maintained with a
bank satisfactory to the Agent in the Agent’s reasonable determination; (d) advances
or loans to officers, directors, employees, or Affiliates as and when permitted by
Section 8.7; (e) secured loans made by the Borrower to other Persons in the
ordinary course of business not to exceed $75,000,000 in the aggregate in any fiscal
year of Borrower; and (f) other unsecured loans to and/or investments in other
Persons by the Borrower not to exceed $75,000,000 in the aggregate in any fiscal
year of Borrower.

8. Subsection (b) of Section 10.31 of the Agreement, Amendments and Waivers,
shall be amended to read as follows:

(b) Prior to the Maturity Date with respect to the Line of Credit B and
provided that a Default or a Matured Default has not occurred and is continuing,
this Agreement may be amended from time to time to increase the total amount of the
Line of Credit B Loan Commitments to an amount not exceeding $300,000,000 in the
aggregate, by one or more written amendments executed by Borrower, the Agent and
one or more Lenders (together with new Notes and other Financing Agreements as may
be reasonably required by the Agent). Subject to the following Section
10.31(c), any such increase shall be allocated to new or existing Lenders at the
discretion of the Agent and Borrower.

9. AgStar Financial Services, PCA, as a new Lender: (a) confirms that it has received copies
of the Financing Agreements, together with copies of the most recent financial statements referred
to in Section 7.1 of the Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into this Amendment; (b)
agrees that it will, independently and without reliance upon the Agent, or any other Lender and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the Agreement; (c) appoints and
authorizes the Agent to take such action on it’s behalf and to exercise such powers under the
Financing Agreements as are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; (d) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Agreement and the other Financing Agreements
are required to be performed by it as a Lender; and (e) specifies as its address for notices the
office set forth in the information it has provided to the Agent.

10. The Borrower represents and warrants that as of the date of this Amendment no Default or
Matured Default has occurred and is continuing. The officer signing on behalf of the Borrower
represents and warrants the Resolutions of the Board of Directors of the Borrower dated December
14, 2007, as certified to U.S. Bank on or about January 2, 2008, are still in full force and
effect, and that the execution and delivery of this Amendment has thereby been duly authorized by
all necessary corporate action.

11. This Amendment shall be effective as of its date, and Equalization Transfers shall be made
in accordance with Section 2.1.5 of the Agreement so that each Lender holds its pro rata share of
the outstanding principal balance of all Loans, conditioned upon the execution and delivery to the
Agent, in form and substance reasonably acceptable to the Agent, of the following: (a) this
Amendment, executed by the Borrower, the Agent and the Lenders; (b) the Supplement to the Amended
and Restated Agents Letter; and (c) Line of Credit A Notes and Line of Credit B Notes reflecting
the revised Commitment Amounts of the Lenders.

12. This Amendment shall be an integral part of the Agreement, and all of the terms set forth
therein are hereby incorporated in this Amendment by reference, and all terms of this Amendment are
hereby incorporated into said Agreement as if made an original part thereof. All of the terms and
conditions of the Agreement, which are not modified in this Amendment, shall remain in full force
and effect. To the extent the terms of this Amendment conflict with the terms of the Agreement,
the terms of this Amendment shall control.

{Signature Pages Follow}

4

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

THE ANDERSONS, INC.

By: /s/ Gary Smith

Gary Smith

V.P. Finance & Tresurer

U.S. BANK NATIONAL ASSOCIATION

By: /s/ Elizabeth Hund

Elizabeth Hund

Senior Vice President

COBANK, ACB

By: /s/ S. Richard Dill

S. Richard Dill

Vice President

HARRIS N.A. (as successor by merger with Harris Trust and Savings Bank)

By: /s/ Robert H. Wolohan

Robert H. Wolohan

Vice President

FIFTH THIRD BANK

By: /s/ David Gerken

David Gerken

Vice President

{Signature Page to First Amendment to Amended and Restated Loan Agreement — The Andersons, Inc.}

COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH

By: /s/ Brad Peterson

Brad Peterson

Executive Director

By: Andrew Sherman

Andrew Sherman

Executive Director

ABN AMRO BANK N.V.

By: /s/ Linda Taliani

Linda Taliani

Senior Vice President

By: /s/ Robert E. OConnell

Robert E. OConnell

Managing Director

BRANCH BANKING AND TRUST

COMPANY

By: /s/ Robert Searson

Robert Searson

Senior Vice President

WELLS FARGO BANK, NATIONAL

ASSOCIATION

By: /s/ Edward L. Cooper III

Edward Cooper III

Senior Vice President

	 	 	{Signature Page to First Amendment to Amended and Restated Loan Agreement — The Andersons, Inc.}

BANK OF AMERICA, NA

By: /s/ Daniel Petrik

By Daniel Petrik

Senior Vice President

BANK OF THE WEST

By: /s/ Theodore Cybularz

By Theodore Cybularz

Vice President

THE HUNTINGTON NATIONAL

BANK

By: /s/ Jeffrey Canfield

Jeffrey Canfield

Senior Vice President

GREENSTONE FARM CREDIT

SERVICES, ACA / FLCA

By: /s/ Curt Flammini

Curt Flammini

Vice President

PNC BANK, NATIONAL

ASSOCIATION

By: /s/ Joseph G. Moran

Joseph G. Moran

Senior Vice President

AGFIRST FARM CREDIT BANK

By: /s/ Bruce Fortner

Bruce Fortner

Vice President

{Signature Page to First Amendment to Amended and Restated Loan Agreement — The Andersons, Inc.}

FARM CREDIT BANK OF TEXAS

By: /s/ Luis M. H. Requejo

Luis M. H. Requejo

Managing Director Capital Markets

FCS FINANCIAL, PCA

By: /s/ Laura M. Roessler

Laura M. Roessler

Senior Lending Officer

NATIONAL CITY BANK

By: /s/ Christian S. Brown

Christian S. Brown

Vice President

THE BANK OF TOKYO-MITSUBISHI

UFJ, LTD.

By: /s/ Akihiko Hamamura

Akihiko Hamamura

Senior Vice President

COMERICA BANK

By: /s/ Blake Arnett

Blake Arnett

Vice President

FORTIS CAPITAL CORP.

By: /s/ Stephen R. Staples

Stephen R. Staples

Director

By: /s/ Irene C. Rummel

Irene Rummel

Director

	 	 	{Signature Page to First Amendment to Amended and Restated Loan Agreement — The Andersons, Inc.}

AGSTAR FINANCIAL SERVICES, PCA

By: /s/ Troy Mostaert

Troy Mostaert

Vice President

	 	 	{Signature Page to First Amendment to Amended and Restated Loan Agreement — The Andersons, Inc.}

5

Schedule A-2 to Loan Agreement

Lenders’ Commitments

	 	 	 	 	 	 	 	 	 
	Line of Credit A Loan Commitments	 	 	 	 
	Name of Lender
	 	Pro Rata Percentage	 	Maximum $Amount
	 
	 	 	 	 	 	 	 	 
	U.S. Bank National Association
	 		12.213740458011	%	 	$	80,000,000.00	
	CoBank, ACB
	 		8.396946564886	%	 	$	55,000,000.00	
	Harris N.A.
	 		7.251908396947	%	 	$	47,500,000.00	
	Fifth Third Bank
	 		6.870229007634	%	 	$	45,000,000.00	
	Rabobank International
	 		5.725190839695	%	 	$	37,500,000.00	
	ABN AMRO Bank N.V.
	 		3.816793893130	%	 	$	25,000,000.00	
	Branch Banking and Trust Company
	 		6.106870229008	%	 	$	40,000,000.00	
	Wells Fargo Bank, National Assn.
	 		11.450381679389	%	 	$	75,000,000.00	
	Bank of America, NA
	 		3.053435114504	%	 	$	20,000,000.00	
	Bank of the West
	 		3.053435114504	%	 	$	20,000,000.00	
	The Huntington National Bank
	 		6.106870229008	%	 	$	40,000,000.00	
	PNC Bank, National Association
	 		2.290076335878	%	 	$	15,000,000.00	
	GreenStone FCS
	 		1.526717557252	%	 	$	10,000,000.00	
	AgFirst Farm Credit Bank
	 		2.290076335878	%	 	$	15,000,000.00	
	Farm Credit Bank of Texas
	 		2.290076335878	%	 	$	15,000,000.00	
	FCS Financial, PCA
	 		1.526717557252	%	 	$	10,000,000.00	
	National City Bank
	 		4.580152671756	%	 	$	30,000,000.00	
	Bank of Tokyo-Mitsubishi UFJ, Ltd.
	 		3.816793893130	%	 	$	25,000,000.00	
	Comerica Bank
	 		3.816793893130	%	 	$	25,000,000.00	
	Fortis Capital Corp.
	 		3.816793893130	%	 	$	25,000,000.00	
	 
	 	 	 	 	 	 	 	 
	TOTAL:
	 		100	%	 	$	655,000,000.00	
	Line of Credit B Loan Commitments
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name of Lender
	 	Pro Rata Percentage	 	Maximum $Amount
	 
	 	 	 	 	 	 	 	 
	U.S. Bank National Association
	 		20.227336736680	%	 	$	50,000,000.00	
	CoBank, ACB
	 		8.090934694672	%	 	$	20,000,000.00	
	Fifth Third Bank
	 		8.495481429406	%	 	$	21,000,000.00	
	Branch Banking and Trust Company
	 		10.113668368340	%	 	$	25,000,000.00	
	Bank of America, NA
	 		4.045467347336	%	 	$	10,000,000.00	
	Bank of the West
	 		4.045467347336	%	 	$	10,000,000.00	
	The Huntington National Bank
	 		7.411296180319	%	 	$	18,320,000.00	
	PNC Bank, National Association
	 		2.779328708822	%	 	$	6,870,229.00	
	AgFirst Farm Credit Bank
	 		9.709121633606	%	 	$	24,000,000.00	
	Farm Credit Bank of Texas
	 		2.831827143135	%	 	$	7,000,000.00	
	FCS Financial, PCA
	 		4.045467347336	%	 	$	10,000,000.00	
	Bank of Tokyo-Mitsubishi UFJ, Ltd.
	 		10.113668368340	%	 	$	25,000,000.00	
	AgStar Financial Services, PCA
	 		8.090934694672	%	 	$	20,000,000.00	
	 
	 	 	 	 	 	 	 	 
	TOTAL:
	 		100	%	 	$	247,190,229.00	

6

Exhibit 7A-2 to

Loan and Security Agreement

Compliance Certificate

Attached

7

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