Document:

***Text Omitted and Filed Separately

Confidential Treatment Requested

Under 17 C.F.R. §§ 200.80(b)(4)

And 240.24b-2

 

Exhibit 10.57

 

May 20, 2003

 

 

 

 

 

 

Re:  Employment
Agreement

Dear
Julia:

This
letter sets forth the terms and conditions of our agreement (the “Agreement”)
regarding your employment with Amylin Pharmaceuticals, Inc. (the “Company”) as of
April 15, 2003.  You and the Company
hereby agree as follows:

1.             The Company appreciates your
interest in working with the University of California, San Diego (“UCSD”) on the
various programs described below, however, the Company desires to retain the
ability to have access to you for Company business.  Accordingly, effective as of April 15, 2003, you will begin
serving as a loaned executive of the Company to UCSD.  As such, you will remain a Company employee, but as a loaned
executive your responsibilities will consist of participating in the UCSD
capital campaign, diabetes awareness program and other similar programs that
may be agreed to by the Company and UCSD from time to time.

During a transition period
from April 15, 2003 to June 30, 2003, you will continue to work part-time at
the Company’s facilities on Company matters, transitioning out of existing
matters and assisting on such other matters as the Company may request.  The remainder of your time during the
transition period will be spent commencing your role as a loaned executive to
UCSD.  The allocation of your time
during the transition period on Company and UCSD matters will be mutually
determined by you and the Company. 
Beginning July 1, 2003, you will begin working full-time on UCSD
matters.  It is expected that while
working on UCSD matters, you will work out of UCSD facilities.  However, you will continue to provide such
occasional consulting services related to your former duties at the Company as
may be reasonably requested by the Company upon reasonable notice and at such
times as are mutually convenient for you and the Company, up to a maximum of
200 hours in any rolling 12-month period during the term of this
Agreement.  Such consulting services
shall be provided at no additional cost to the Company.

During the term of this
agreement, you will report to the Chief Executive Officer of the Company
(“CEO”) and you will devote your full business time and efforts to your duties
hereunder.  This Agreement will
terminate as of March 31, 2005 (subject to the provisions of paragraph 3
below).

 

2.             During the term of this
Agreement and so long as you continue to provide services hereunder and comply
with the terms hereof, you shall be entitled to the following employee
benefits:

(a)           your salary
shall be [...***...] per year beginning April 15, 2003 through March 31, 2004 and
[...***...] per year beginning April 1, 2004 and thereafter, payable in regular
periodic payments in accordance with Company policy, less payroll deductions
and all other required withholdings;

(b)           your stock
options under the Company’s equity incentive plans will continue to vest
pursuant to their terms;

(c)           you shall be
entitled to participate in the Company’s Employee Stock Purchase Plan, 401(k)
plan and deferred compensation plan;

(d)           you
will be entitled to paid personal leave and designated holidays consistent with
standard Company policy;

(e)           you
shall retain a Company phone number, voice-mail account and e-mail account; and

(f)            you
will continue to be eligible for coverage under Company medical, dental, life
and disability plans.

In addition, if the
Company adopts an employee retirement plan before March 31, 2005 and for so
long as you remain an employee of the Company (or, if prior to March 31, 2005
you die or become permanently disabled, the Company terminates your employment
without Cause (as defined below) or you resign for Good Reason (as defined
below), then through March 31, 2005) you will be entitled to benefits under
such plan.  The change in your
status with the Company provided for under this Agreement will not affect your
coverage under the Company’s D&O policy as currently in effect.

Except as expressly provided
herein, you will not receive (nor are you entitled to) any additional
compensation, bonuses, severance, benefits, shares of stock or stock
options.  Without limiting the
foregoing, you acknowledge that you will not be eligible to participate in, and
will not be entitled to any benefits under, the Company’s Change in Control
Employee Severance Benefit Plan.

3.             Your employment with the
Company will continue to be at-will in that you may terminate your employment
with the Company at any time and for any reason whatsoever and likewise, the
Company may terminate your employment at any time and for any reason
whatsoever.  Upon termination of your
employment with the Company, you will be paid your then current accrued 

*Confidential
Treatment Request(ed)

2

 

salary to and including the
date of termination and any accrued vacation pay.  In addition, if your service under this Agreement is terminated
at any time (i) as a result of your death or permanent disability, (ii) by the Company
without Cause, or (iii) by you for Good Reason, then, subject to and contingent
upon you or your representative furnishing to the Company an effective Release
and Waiver of Claims in the form attached hereto as Exhibit A dated as of or after
such date of termination, you shall be entitled to continue to receive the
benefits set forth in Section 2(a) of this Agreement (paid on regular Company
pay days in accordance with Company policy) from the date of such termination
through March 31, 2005 and your stock options under the Company’s stock option
plans will vest as of the date of such termination to the extent such options
would have vested had you remained as an employee of the Company through March
31, 2005.  Concurrently herewith you
(and your spouse, if applicable) have completed and delivered to the Company a
Designation of Beneficiary in the form attached hereto as Exhibit B.

(a)           For purposes of
this Agreement, “Cause”
shall mean any of the following reasons as determined in good faith by the Company:

(i)            an act which
intentionally and materially injures the Company;

(ii)           an intentional
refusal or failure to follow lawful and reasonable directions of the CEO within
your pre-arranged budget;

(iii)         a willful and
habitual neglect of duties; or

(iv)          a conviction of
a felony involving moral turpitude which is reasonably likely to inflict or has
inflicted material injury on the Company or its reputation.

(v)            For purposes of
this Agreement, “Good
Reason” shall mean any reduction in your salary or a material
reduction in your benefits as set forth in this Agreement that is not cured
within fifteen (15) days following delivery of written notice of such event to
the Company.

4.             Within ten (10) days of
completing the transition period and beginning full time work on UCSD matters,
you agree to:

(a)           Submit your
final documented expense reimbursement statement reflecting all Company
business expenses you incurred through such submission date, if any, for which
you seek reimbursement.  The Company
will reimburse you for these expenses pursuant to its regular business
practice.  Thereafter, you agree that
you will not be entitled to reimbursement of Company expenses unless such
expenses are approved in writing by an officer of the Company.  Expenses incurred as a loaned executive to
UCSD will be reimbursed by UCSD according to UCSD policy; and

3

 

(b)           Return to the
Company all Company documents (and all copies thereof) and other Company
property in your possession or your control, including, but not limited to,
Company files, notes, samples, sales notebooks, drawings, specifications,
calculations, sequences, data, computer-recorded information, tangible
property, credit cards and any other materials of any nature pertaining to your
work with the Company, and any documents or data of any description (or any
reproduction of any documents or data) containing or pertaining to any
proprietary or confidential material of the Company.

Notwithstanding the
forgoing, however, during the term of this agreement you will be permitted to
continue to use your Company lap top computer and to have access to such
Company files as pertain directly to your role as a loaned executive to UCSD
and to other materials and information necessary to perform tasks for the
Company which may be assigned by the CEO. 
Within ten (10) days of any termination of your employment with the
Company, you agree to return all Company materials, including but not limited
to computers, files, access cards and keys, to the Company.

5.             You acknowledge your
continuing obligations under your Proprietary Information and Inventions
Agreement not to use or disclose any confidential of proprietary information of
the Company without prior written authorization from a duly authorized
representative of the Company.  A copy
of your Proprietary Information and Inventions Agreement has been provided to
you concurrently herewith.

6.             You and the Company agree
that neither party will at any time disparage the other party, or the other party’s
officers, directors, employees, stockholders and agents, in any manner likely
to be harmful to them or their business, business reputation or personal
reputation; provided that each party shall respond accurately and fully to any
questions, inquiry or request for information when required by legal
process.  The Company is not presently
aware, without having conducted any investigation whatsoever, of any facts that
would give rise to a cause of action against you by the Company.

7.             The provisions of this
Agreement shall be held in strictest confidence by you and the Company and
shall not be publicized or disclosed in any manner whatsoever; provided,
however, that: (a) you may disclose this Agreement, in confidence, to your
immediate family; (b) the parties may disclose this Agreement in
confidence to their respective attorneys, accountants, auditors, tax preparers,
and financial advisors; (c) the Company may disclose this Agreement as
necessary to fulfill standard or legally required corporate reporting or
disclosure requirements; and (d) the parties may disclose this Agreement
insofar as such disclosure may be necessary to enforce its terms or as
otherwise required by law.

8.             In exchange for the promises
and covenants set forth herein, and as a condition to your eligibility to
receive any benefits or compensation pursuant to this Agreement, you shall
execute and deliver to the Company the Release and Waiver of Claims attached
hereto as Exhibit A.  

 

4

 

Notwithstanding any other
provision of this Agreement, this Agreement shall not be effective until such
time as the Revocation Period Expiration referred to in the attached Release
and Waiver of Claims shall have occurred without your having exercised your right
to so revoke as provided for therein.

9.             If you become a
party or are threatened to be made a party to any threatened, pending or
completed claim, action, suit or proceeding (collectively, “Action”) by a third
party (excluding the Company) arising out of acts by you within the scope of
your employment with the Company, the Company shall indemnify you against any
reasonable expenses (including reasonable attorneys’ fees and disbursements),
and any judgments, fines and amounts paid in settlement incurred by you (so
long as, with respect to amounts paid in settlement, such amounts are approved
in writing in advance by the Company, such approval not to be unreasonably
withheld) in connection with such Action in accordance with California law. You
agree to give prompt notice of the initiation of such Action to the Company and
to allow the Company to have the right to control the defense of such Action
with its attorneys unless there is a real or potential conflict of interest
between you and the Company, in which case the Company will pay for a separate
law firm to defend you.

 

10.          This Agreement, including
the exhibits attached hereto, constitutes the complete, final and exclusive
embodiment of the entire agreement between you and the Company with regard to
the subject matter hereof, and supersedes
all prior agreements and/or understandings regarding the same, including
without limitation that certain letter agreement between the Company and you
dated June 1, 2000.  This
Agreement is entered into without reliance on any promise or representation,
written or oral, other than those expressly contained herein.  It may not be modified except in a writing
signed by you and a duly authorized officer of the Company.  Each party has carefully read this
Agreement, has been afforded the opportunity to be advised of its meaning and
consequences by his or its respective attorneys, and signed the same of his or
its free will.

11.          This Agreement shall be
deemed to have been entered into and shall be construed and enforced in accordance
with the laws of the State of California as applied to contracts made and to be
performed entirely within California.

12.          If a court of competent
jurisdiction determines that any term or provision of this Agreement is invalid
or unenforceable, in whole or in part, then the remaining terms and provisions
hereof shall be unimpaired.  Such court
will have the authority to modify or replace the invalid or unenforceable term
or provision with a valid and enforceable term or provision that most accurately
represents the parties’ intention with respect to the invalid or unenforceable
term or provision.

13.          This Agreement
may be executed in two counterparts, each of which shall be deemed an original,
all of which together shall constitute one and the same instrument.

 

5

 

Please confirm your assent to the foregoing terms
and conditions of our Agreement by signing and returning a copy of this letter
to me.

Sincerely,

 

	
  AMYLIN
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
  Lloyd A. Rowland

  
	
   

  	
  Vice President, Legal

  
	
   

  	
  and General Counsel

  

 

 

 

 

Having read and reviewed the foregoing, I hereby agree to and
accept the terms and conditions as stated above.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Julia R. Brown

  

 

 

6

 

EXHIBIT A

RELEASE AND
WAIVER OF CLAIMS

In
consideration of the payments and other benefits to be provided pursuant to the
Letter Agreement relating to employment dated May 20, 2003, to which this form
is attached as Exhibit A (the “Employment Agreement”), I, Julia R. Brown, hereby furnish Amylin Pharmaceuticals, Inc. (the “Company”), with the following release
and waiver (“Release and
Waiver”).

I
hereby generally and completely release and forever discharge the Company and
its directors, officers, employees, shareholders, partners, agents, attorneys,
predecessors, successors, parent and subsidiary entities, insurers, affiliates,
and assigns from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys’ fees, damages, indemnities and obligations of every
kind and nature, in law, equity or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing
this Release and Waiver.  This general
release includes, but is not limited to: (1) all claims arising out of or in
any way related to my employment with the Company, including a reduction in
responsibilities or title, or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (4) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (5) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990, the
federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and
the California Fair Employment and Housing Act (as amended).

I
also acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows:  “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I
hereby expressly waive and relinquish all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to any
claims I may have against the Company.

I acknowledge that, among
other rights, I am waiving and releasing any rights I may have under the ADEA,
that this Release and Waiver is knowing and voluntary, and that the
consideration given for this Release and Waiver is in addition to anything of
value to which I was already entitled as an executive of the Company.  I further acknowledge that I have been
advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein
does not relate to claims under the ADEA which may arise after this Release and
Waiver is executed; (b) I have the right to consult with an attorney prior to
executing this Release and 

 

7

 

Waiver
(although I may choose voluntarily not to do so); and (c) I have twenty-one
(21) days from the date of termination of my employment with the Company in
which to consider this Release and Waiver (although I may choose voluntarily to
execute this Release and Waiver earlier); (d) I have seven (7) days following
the execution of this Release and Waiver to revoke my consent to this Release
and Waiver; and (e) this Release and Waiver shall not be effective until the
seven (7) day revocation period has expired without revocation of this Release
and Waiver (the “Revocation
Period Expiration”).

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Julia R. Brown

  

 

 

8

 

EXHIBIT B

AMYLIN
PHARMACEUTICALS, INC.

DESIGNATION OF BENEFICIARY

I,                                  
, hereby designate the following persons (the “Beneficiaries”) to
exercise my separate property interests (if any) and, if I reside in a
community property state†, my
community property interests (if any) and, if my spouse executes the Consent to
Designation of Beneficiary (below) my spouse’s community property interests (if
any) in the benefits payable pursuant to the letter agreement (the “Agreement”)
dated May 20, 2003 between myself and Amylin Pharmaceuticals, Inc. (the
“Company”), and to be the recipient of such benefits, in the event of my death,
according percentages specified below:

 

	
  Name of Beneficiary: 

  	
   

  
	
   

  

 

	
  Capacity:

  	
  o

  	
  Individually

  	
  o

  	
  As
  Trustee

  	
  o

  	
  Other

  	
   

  	
   

  

 

	
  Percentage
  of Benefits:

  	
   

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  
	
  Phone:

  	
   

  
										

 

	
  Name of Beneficiary: 

  	
   

  
	
   

  

 

	
  Capacity:

  	
  o

  	
  Individually

  	
  o

  	
  As
  Trustee

  	
  o

  	
  Other

  	
   

  	
   

  

 

	
  Percentage
  of Benefits:

  	
   

  	
  %

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  
	
  Phone:

  	
   

  
										

 

To the extent any Beneficiary is someone other than
an individual, for example, the Trustee of a living trust, the Company shall
not be required to follow such Beneficiary’s instructions until it receives
satisfactory evidence, as determined in its sole discretion, that such
Beneficiary is then serving in the indicated capacity.  This Designation of Beneficiary shall
supersede all prior designations made by me and may be revoked or altered by me
at any time prior to my death.

	
   

  	
   

  	
   

  
	
  Date

  	
  Signature

  

 

†The following states are community property states:
Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington,
Wisconsin.

 

9

CONSENT TO DESIGNATION OF
BENEFICIARY

(FOR USE IN COMMUNITY PROPERTY STATES†)

 

 

I,                                           ,
am the spouse of                                           .  I hereby consent to my spouse’s Designation
of Beneficiary dated                                     and attached hereto with
respect to my community property or other interest in any benefits payable
under the Agreement, if any.  This
consent does not represent a transmutation of my community property interest,
if any, in such options and I reserve the right to revoke this consent by giving
written notice of such revocation to the Company prior to the time of my
spouse’s death.

	
   

  	
   

  	
   

  
	
  Date

  	
  Spouse’s Signature

  

 

 

 

†The following
states are community property states: Arizona,
California, Idaho, Louisiana, Nevada, New  Mexico, Texas, Washington, Wisconsin.

 

10Exhibit 10.1

 

CHANGE IN TERMS AGREEMENT

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $20,000,000.00

  	
   

  	
  12-19-2001

  	
   

  	
  09-30-2003

  	
   

  	
  53455

  	
   

  	
  47/400

  	
   

  	
  119284

  	
   

  	
  JB

  	
   

  	
   

  	
   

  

 

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:

  	
   

  	
  HUSKER AG, LLC (TIN:  47-0836953)

  	
   

  	
  LENDER:

  	
  STEARNS BANK NATIONAL ASSOCIATION

  	
   

  
	
   

  	
   

  	
  PO BOX 10

  	
   

  	
   

  	
  4191 SO 2ND ST

  	
   

  
	
   

  	
   

  	
  PLAINVIEW, NE 68769

  	
   

  	
   

  	
  PO BOX 7338

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ST CLOUD, MN 56302

  	
   

  

 

 

	
  Principal Amount:  $20,000,000.00

  	
   

  	
  Initial Rate:  4.500%

  	
   

  	
  Date of Agreement:  JUNE 28,
  2003

  	
   

  

 

DESCRIPTION OF EXISTING INDEBTEDNESS.  PROMISSORY NOTE DATED 12-19-2001 IN THE
ORIGINAL PRINCIPAL AMOUNT OF $20,000,000.00.

 

DESCRIPTION OF CHANGE IN TERMS.  EXTEND MATURITY DATE.

 

PROMISE TO PAY.  HUSKER AG, LLC (“Borrower”) promises to pay
to STEARNS BANK NATIONAL ASSOCIATION (“Lender”), or order, in lawful money of
the United States of America, the principal amount of Twenty Million &
00/100 Dollars ($20,000,000.00) or so much as may be outstanding, together with
interest on the unpaid outstanding principal balance of each advance.  Interest shall be calculated from the date
of each advance until repayment of each advance.

 

PAYMENT. 
BORROWER WILL PAY THIS LOAN ON DEMAND.  Payment in full is due immediately upon
Lender’s demand.  If no demand is made,
Borrower will pay this loan in one payment of all outstanding principal plus
all accrued unpaid interest on September 30, 2003.  In addition, Borrower will pay regular monthly payments of all
accrued unpaid interest due as of each payment date, beginning July 19, 2003,
with all simple interest 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 Agreement is
subject to change from time to time based on changes in an independent index
which is the WALL STREET JOURNAL PRIME RATE (the “Index”).  The Index is not necessarily the lowest rate
charged by Lender on its loans.  If the
Index becomes unavailable during the term of this loan, Lender may designate a
substitute index after notice to Borrower. 
Lender will tell Borrower the current Index 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 index currently is 4.250% per
annum.  The interest rate to be applied
to the unpaid principal balance of the Note will be at a rate of 0.250
percentage points over the Index, resulting in an initial rate of 4.500% per
annum.  NOTICE:  Under no circumstances will the interest on
the 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 any Lender in writing,
relieve Borrower of Borrower’s obligation to continue to make payments of
accrued unpaid interest.  Rather, early
payments will reduce the principal balance due.  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 Agreement, 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:  STEARNS BANK NATIONAL ASSOCIATION,
4191 SO 2ND ST, ST. CLOUD, MN 56302-7338.

 

INTEREST AFTER DEFAULT.  Upon default, including failure to pay upon
final maturity, the total sum due under this Agreement will bear interest from
the date of acceleration or maturity at the variable interest rate on this
Agreement.  The interest rate will not
exceed the maximum rate permitted by applicable law.

 

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 indebtedness.

 

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.

 

 

 

Loan
No. 53455

 

Default in Favor of
Third Parties. 
Borrower 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 perform Borrower’s 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.

 

Death or Insolvency.  The dissolution of Borrower (regardless of
whether election to continue is made), any member withdraws from Borrower, or
any other termination of Borrower’s existence as a going business or the death
of any member, 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 indebtedness.  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, endorser, surety,
or accommodation party of any of the indebtedness or any guarantor, endorser,
surety, or accommodation party 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.

 

Adverse Change.  A material adverse change occurs in
Borrower’s financial condition, or Lender believes the prospect of payment of
performance of the indebtedness 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 Agreement 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 Agreement 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 Agreement if Borrower does not pay.  Borrower will pay Lender that amount.  This includes, subject to any limits under
applicable law, Lender’s reasonable attorneys’ fees and Lender’s legal
expenses, whether or not there is a lawsuit, including reasonable 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.

 

JURY WAIVER. 
Lender and Borrower hereby waive the right to
any jury trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other.

 

GOVERNING LAW.  This Agreement will be governed by,
construed and enforced in accordance with federal law and the laws of the State
of Minnesota.  This Agreement has been
accepted by Lender in the State of Minnesota.

 

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
indebtedness against any and all such accounts, and, at Lender’s option, to
administratively freeze all such accounts to allow Lender to protect Lender’s
charge and setoff rights provided in this paragraph.

 

2

 

COLLATERAL. 
Borrower acknowledges this Agreement is secured
by COLLATERAL AS DESCRIBED IN THE FOLLOWING DOCUMENTS:  DEED OF TRUST, ASSIGNMENT OF RENTS AND
SECURITY AGREEMENT FROM BORROWER TO LENDER DATED 12-19-01.

 

LINE OF CREDIT.  This Agreement evidences a straight line
of credit.  Once the total amount of
principal has been advanced Borrower is not entitled to further loan
advances.  Borrower agrees to be liable
for all sums either:  (A) advanced in
accordance with the instructions of an authorized person or (B) credited to any
of Borrower’s accounts with Lender.  The
unpaid principal balance owing on this Agreement at any time may be evidenced by
endorsements on this Agreement or by Lender’s internal records, including daily
computer print-outs.

 

CONTINUING VALIDITY.  Except as expressly
changed by this Agreement, the terms of the original obligation or obligations,
including all agreements evidenced or securing the obligation(s), remain
unchanged and in full force and effect. 
Consent by Lender to this Agreement does not waive Lender’s right to
strict performance of the obligation(s) as changed, nor obligate Lender to make
any future change in terms.  Nothing in
this Agreement will constitute a satisfaction of the obligations(s).  It is the intention of Lender to retain as
liable parties all makers and endorsers of the original obligation(s) including
accommodation parties, unless a party is expressly released by Lender in
writing.  Any maker or endorser,
including accommodation makers will not be released by virtue of this
Agreement.  If any person who signed the
original obligation does not sign this Agreement below, then all persons
signing below acknowledge that this Agreement is given conditionally, based on
the representation to Lender that the non-signing party consents to the changes
and provisions of this Agreement or otherwise will not be released by it.  This waiver applies not only to any initial
extension modification or release, but also to all such subsequent actions.

 

LATE CHARGE. 
SHOULD BORROWER FAIL TO PAY ANY PAYMENT
REQUIRED DURING THE TERM OF THIS LOAN, OR TO PAY THE INDEBTEDNESS UPON THE
MATURITY OF THIS LOAN, AND SHOULD ANY SUCH AMOUNT REMAIN UNPAID FOR A PERIOD OF
TEN (10) DAYS FOLLOWING ITS DUE DATE, THEN BORROWER AGREES AND COVENANTS TO PAY
TO LENDER A LATE CHARGE IN THE AMOUNT OF FIVE PERCENT (5%) OF ANY SUCH AMOUNT,
INCLUDING THE AMOUNT DUE AND PAYABLE AT MATURITY.

 

SUCCESSORS AND ASSIGNS.  Subject to any
limitations stated in this Agreement on transfer of Borrower’s interest, this
Agreement shall be binding upon and inure to the benefit of the parties, their
successors and assigns.  If ownership of
the Collateral becomes vested in a person other than Borrower, Lender, without
notice to Borrower, may deal with Borrower’s successors with reference to this
Agreement and the indebtedness by way of forbearance or extension without
releasing Borrower from the obligations of this Agreement or liability under
the indebtedness.

 

MISCELLANEOUS PROVISIONS.  This Agreement is
payable on demand.  The inclusion of
specific default provisions or rights of Lender shall not preclude Lender’s
right to declare payment of this Agreement on its demand.  Lender may delay or forgo enforcing any of
its rights or remedies under this Agreement without losing them.  Borrower and any other person who signs,
guarantees or endorses this Agreement, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor.  Upon any change in the terms of this
Agreement, and unless otherwise expressly stated in writing, no party who signs
this Agreement, 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, fall 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 Agreement are
joint and several.

 

SECTION DISCLOSURE.  This loan is made under Minnesota
Statutes, Section 47.59.

 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER
READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. 
BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

 

BORROWER:

 

 

HUSKER AG, LLC

 

 

	
  By:

  	
   

  	
  (Seal)

  	
  By:

  	
   

  	
  (Seal)
  

  
	
   

  	
  GARY
  KUESTER, Chairman of HUSKER AG, LLC 

  	
   

  	
  JACK
  FRAHM, Secretary of HUSKER AG, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  (Seal)

  	
  By:

  	
   

  	
  (Seal) 

  
	
   

  	
  FRED KNIEVEL,
  Treasurer of HUSKER AG, LLC 

  	
   

  	
  SCOTT CARPENTER,
  Vice Chairman of HUSKER AG, LLC

  

 

 

 

3

 

	
  WHEN RECORDED MAIL TO:

  	
   

  
	
   

  	
  STEARNS BANK NATIONAL ASSOCIATION

  	
   

  
	
   

  	
  4191 SO 2ND ST

  	
   

  
	
   

  	
  PO BOX 7338

  	
   

  
	
   

  	
  ST CLOUD, MN  56302

  	
  FOR RECORDER’S USE ONLY

  

 

MODIFICATION OF DEED
OF TRUST

 

THIS MODIFICATION OF DEED OF TRUST dated JUNE
23, 2003, is made and executed between HUSKER AG, LLC, F/K/A HUSKER AG
PROCESSING, LLC, A NEBRASKA LIMITED LIABILITY COMPANY whose address is PO BOX
10, PLAINVIEW, NE  68769 (“Trustor”) and
STEARNS BANK NATIONAL ASSOCIATION, 4191 SO 2ND ST, PO BOX 7338, ST CLOUD,
MN  56302 (“Lender”).

 

DEED OF TRUST.  Lender and Trustor have entered into a
Deed of Trust dated December 18, 2001 (the “Deed of Trust”) which has been
recorded in PIERCE County, State of Nebraska, as follows:

 

RECORDED DECEMBER 26,
2001, IN BOOK 137 OF MORTGAGES, PAGE 316, IN PIERCE COUNTY, NEBRASKA.

 

REAL PROPERTY DESCRIPTION.  The Deed of Trust
covers the following described real property located in PIERCE County, State of
Nebraska:

 

See EXHIBIT
“A” which is attached to this Modification and made a part of this Modification
as if fully set forth herein.

 

The Real Property or its
address is commonly known as HIGHWAY 20 EAST, PLAINVIEW, NE  68769. 
The Real Property tax identification number is 700023625.

 

MODIFICATION.  ender and Trustor hereby modify the Deed
of Trust as follows:

 

EXTEND MATURITY DATE
TO SEPTEMBER 30, 2003.

 

CONTINUING VALIDITY.  Except as expressly
modified above, the terms of the original Deed of Trust shall remain unchanged
and in full force and effect.  Consent
by Lender to this Modification does not waive Lender’s right to require strict
performance of the Deed of Trust as changed above nor obligate Lender to make
any future modifications.  Nothing in
this Modification shall constitute a satisfaction of the promissory note or
other credit agreement secured by the Deed of Trust (the “Note”).  It is the intention of Lender to retain as
liable all parties to the Deed of Trust and all parties, makers and endorsers
to the Note, including accommodation parties, unless a party is expressly
released by Lender in writing.  Any
maker or endorser, including accommodation makers, shall not be released by
virtue of this Modification.  If any
person who signed the original Deed of Trust does not sign this Modification,
then all persons signing below acknowledge that this Modification is given
conditionally, based on the representation to Lender that the non-signing
person consents to the changes and provisions of this modification or otherwise
will not be released by it.  This waiver
applies not only to any initial extension or modification, but also to all such
subsequent actions.

 

TRUSTOR ACKNOWLEDGES HAVING READ ALL THE
PROVISIONS OF THIS MODIFICATION OF DEED OF TRUST AND TRUSTOR AGREES TO ITS
TERMS.  THIS MODIFICATION OF DEED OF
TRUST IS DATED JUNE 23, 2003.

 

4

 

TRUSTOR:

 

 

HUSKER AG, LLC

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  GARY KUESTER,
  Chairman of HUSKER AG, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  JACK FRAHM,
  Secretary of HUSKER AG, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  FRED KNIEVEL,
  Treasurer of HUSKER AG, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  SCOTT CARPENTER,
  Vice Chairman of HUSKER AG, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  X

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  
				

 

LIMITED
LIABILITY COMPANY ACKNOWLEDGMENT

 

	
  STATE OF

  	
   

  	
   

  	
  )

  
	
   

  	
   

  	
   

  	
  )  SS

  
	
  COUNTY OF

  	
   

  	
   

  	
  )

  
						

 

On this
             
day of
                      
, 20          , before me, the
undersigned Notary Public, personally appeared GARY KUESTER, Chairman; JACK
FRAHM, Secretary; FRED KNIEVEL, Treasurer; SCOTT CARPENTER, Vice Chairman of
HUSKER AG, LLC, and known to me to be partners or designated agents of the
limited liability company that executed the Modification of Deed of Trust and
acknowledged the Modification to be the free and voluntary act and deed of the
limited liability company, by authority of statute, its articles of
organization or its operating agreement, for the uses and purposes therein
mentioned, and on oath stated that they are authorized to execute this
Modification and in fact executed the Modification on behalf of the limited
liability company.

 

	
   

  	
  By

  	
   

  
	
   

  	
  Notary Public in and for the State of

  	
   

  
	
   

  	
  Residing at

  	
   

  
	
   

  	
  My commission expires

  	
   

  
						

 

5

 

	
   

  	
   

  	
   

  
	
  STATE OF

  	
   

  	
   

  	
  )

  
	
   

  	
   

  	
  )   SS

  
	
  COUNTY OF

  	
   

  	
   

  	
  )

  
					

 

On this              day of                               , 20             , before me, the undersigned Notary Public, personally
appeared                      , and
known to me to be the                                     authorized agent for the
Lender that executed the within and foregoing instrument and acknowledged said
instrument to be the free and voluntary act and deed of the said Lender, duly
authorized by the Lender through its board of directors or otherwise, for the
uses and purposes therein mentioned, and on oath stated that he or she is
authorized to execute this said instrument and that the seal affixed is the
corporate seal of said Lender.

 

	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Notary Public in and for the State of

  	
   

  
	
   

  	
   

  	
  Residing at

  	
   

  
	
   

  	
   

  	
  My commission expires

  	
   

  
							

 

6

 

DISBURSEMENT REQUEST
AND AUTHORIZATION

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $20,000,000.00

  	
   

  	
  12-19-2001

  	
   

  	
  09-30-2003

  	
   

  	
  53455

  	
   

  	
  47/400

  	
   

  	
  119284

  	
   

  	
  JB

  	
   

  	
   

  	
   

  

 

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:

  	
   

  	
  HUSKER AG, LLC (TIN:  47-0836953)

  	
   

  	
  LENDER:

  	
  STEARNS BANK NATIONAL ASSOCIATION

  	
   

  
	
   

  	
   

  	
  PO BOX 10

  	
   

  	
   

  	
  4191 SO 2ND ST

  	
   

  
	
   

  	
   

  	
  PLAINVIEW, NE 68769

  	
   

  	
   

  	
  PO BOX 7338

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ST CLOUD, MN 56302

  	
   

  

 

LOAN TYPE. 
This is a Variable Rate Nondisclosable Draw
Down Line of Credit Loan to a Limited Liability Company for $20,000,000.00 due
on September 30, 2003.  the reference
rate (WALL STREET JOURNAL PRIME RATE, currently 4.250%) is added to the margin
of 0.250%, resulting in an initial rate of 4.500.  This is a secured renewal loan.

 

PRIMARY PURPOSE OF LOAN.  The primary purpose
of this loan is for:

 

o Maintenance of
Borrower’s Primary Residence.

 

o Personal, Family or
Household Purposes or Personal Investment.

 

o Agricultural Purposes.

 

ý Business Purposes.

 

SPECIFIC PURPOSE.  The specific purpose of this loan
is:  CONSTRUCT A 20 MGY CAPACITY ETHANOL
PLANT IN PLAINVIEW NE.

 

FLOOD INSURANCE.  As reflected on Flood Map No. 310466
0025B dated 06-04-1987, for the community of PIERCE COUNTY, some of the
property that will secure the loan is not located in an area that has been
identified by the Director of the Federal Emergency Management Agency as an
area having special flood hazards. 
Therefore, although flood insurance may be available for the property,
no special flood hazard insurance is required by law for this loan.

 

DISBURSEMENT INSTRUCTIONS.  Borrower
understands that no loan proceeds will be disbursed until all of Lender’s
conditions for making the loan have been saisfied.  Please disburse the loan proceeds of $20,000,000.00 as follows:

 

	
  Undisbursed Funds:

  	
   

  	
  $

  	
  694,320.59

  	
   

  
	
  Other Disbursements:

  	
   

  	
   

  	
   

  
	
  $19,305,679.41 Outstanding Balance

  	
   

  	
  $

  	
  19,305,679.41

  	
   

  
	
  Note Principal:

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  

 

CHARGES PAID IN CASH.  Borrower has paid
or will pay in cash as agreed the following charges:

 

	
  Prepaid Finance Charges Paid in Cash:

  	
   

  	
  $

  	
  0.00

  	
   

  
	
  Other Charges Paid in Cash:

  	
   

  	
   

  	
   

  
	
  $20.50 FILING / RECORDING FEES

  	
   

  	
   

  	
   

  
	
  $500.00 RENEWAL FEE

  	
   

  	
  $

  	
  520.50

  	
   

  
	
  Total Charges Paid in Cash:

  	
   

  	
  $

  	
  520.50

  	
   

  

 

FINANCIAL CONDITION.  BY SIGNING THIS AUTHORIZATION, BORROWER
REPRESENTS AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE
AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER’S
FINANCIAL CONDITION AS DISCLOSED IN BORROWER’S MOST RECENT FINANCIAL STATEMENT
TO LENDER.  THIS AUTHORIZATION IS DATED
JUNE 23, 2003.

 

BORROWER:

 

 

HUSKER AG, LLC

 

 

	
  By:

  	
   

  	
  (Seal)

  	
  By:

  	
   

  	
  (Seal)
  

  
	
   

  	
  GARY
  KUESTER, Chairman of HUSKER AG, LLC 

  	
   

  	
  JACK
  FRAHM, Secretary of HUSKER AG, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  (Seal)

  	
  By:

  	
   

  	
  (Seal) 

  
	
   

  	
  FRED KNIEVEL,
  Treasurer of HUSKER AG, LLC 

  	
   

  	
  SCOTT CARPENTER,
  Vice Chairman of HUSKER AG, LLC

  

 

7

 

LIMITED LIABILITY
COMPANY RESOLUTION TO BORROW / GRANT

COLLATERAL /
SUBORDINATE DEBT

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $20,000,000.00

  	
   

  	
  12-19-2001

  	
   

  	
  09-30-2003

  	
   

  	
  53455

  	
   

  	
  47/400

  	
   

  	
  119284

  	
   

  	
  JB

  	
   

  	
   

  	
   

  

 

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:

  	
   

  	
  HUSKER AG, LLC (TIN:  47-0836953)

  	
   

  	
  LENDER:

  	
  STEARNS BANK NATIONAL ASSOCIATION

  	
   

  
	
   

  	
   

  	
  PO BOX 10

  	
   

  	
   

  	
  4191 SO 2ND ST

  	
   

  
	
   

  	
   

  	
  PLAINVIEW, NE 68769

  	
   

  	
   

  	
  PO BOX 7338

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ST CLOUD, MN 56302

  	
   

  

 

 

I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:

 

THE COMPANY’S EXISTENCE.  The complete and
correct name of the Company is HUSKER AG, LLC (“Company”).  The Company is a limited liability company
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 Nebraska.  The Company is duly authorized to transact
business in all other states in which the Company is doing business, having
obtained all necessary filings, governmental licenses and approvals for each
state in which the Company is doing business. 
Specifically, the Company is, and at all times shall be, duly qualified
as a foreign limited liability company in all states in which the failure to so
qualify would have a material adverse effect on its business or financial
condition.  The Company 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 Company maintains an office at PO BOX
10, PLAINVIEW, NE 68769.  Unless the
Company has designated otherwise in writing, the principal office is the office
at which the Company keeps its books and records.  The Company will notify Lender prior to any change in the
location of the Company’s state of organization or any change in the Company’s
name.  The Company shall do all things
necessary to preserve and to keep in full fore 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 Company and the Company’s business
activities.

 

RESOLUTIONS ADOPTED.  At a meeting of the
members of the Company, 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.

 

MEMBERS. 
The following named persons are members of
HUSKER G, LLC:

 

	
  NAMES

  	
   

  	
  TITLES

  	
   

  	
  AUTHORIZED

  	
   

  	
  ACTUAL
  SIGNATURES

  
	
  GARY KUESTER

  	
   

  	
  Chairman

  	
   

  	
  Y

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JACK FRAHM

  	
   

  	
  Secretary

  	
   

  	
  Y

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FRED KNIEVEL

  	
   

  	
  Treasurer

  	
   

  	
  Y

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCOTT
  CARPENTER

  	
   

  	
  Vice
  Chairman

  	
   

  	
  Y

  	
   

  	
  X

  	
   

  

 

ACTIONS AUTHORIZED.  Any four (4) of the authorized persons
listed above may enter into any agreements of any nature with Lender, and those
agreements will bind the Company. 
Specifically, but without limitation, any four (4) of such authorized
persons are authorized, empowered, and directed to do the following for and on
behalf of the Company:

 

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 Company and Lender, such sum or sums of money s 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
Company’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 Company’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 Company or in which the
Company now or hereafter may have an interest, including without limitation all
real property and all personal property (tangible or intangible) of the
Company, 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 Company 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 

 

8

 

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 delivery 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.

 

Subordination.  To subordinate, in
all respects, any and all present and future indebtedness, obligations,
liabilities, claims, rights, and demands of any kind which may be owed, now or
hereafter, from any person or entity to the Company to all present and future
indebtedness, obligations, liabilities, claims, rights, and demands of any kind
which may be owed, now or hereafter, from such person or entity to Lender
(“Subordinated indebtedness”), together with subordination by the Company of any
and all security interests of any kind, whether now existing or hereafter
acquired, securing payment or performance of the Subordinated Indebtedness; all
on such subordination terms as may be agreed upon between the Company’s Members
and Lender and in such amounts as in their judgment should subordinated.

 

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 Company or in
which the Company may have an interest, and either to receive cash for the same
or to cause such proceeds to be credited to the Company’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 an costs, and to
execute and deliver such other documents and agreements, including agreements
waiving the right to a trial by jury, as the members may in their discretion
deem reasonably necessary or proper in order to carry into effect the
provisions of this Resolution.

 

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

 

NOTICES TO LENDER.  The Company 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 Company’s name;
(B) change in the Company’s assumed business name(s); (C) change in the
management or in the Members of the Company; (D) change in the authorized
signer(s); (E) change in the Company’s principal office address; (F) change in
the Company’s state of organization; (G) conversion of the Company to a new or
different type of business entity; or (H) change in any other aspect of the
Company that directly or indirectly relates to any agreements between the
Company and Lender.  No change in the
Company’s name or state of organization will take effect until after Lender has
received notice.

 

CERTIFICATION CONCERNING MEMBERS AND
RESOLUTIONS.  The
members named above are duly elected, appointed, or employed by or for the
Company, 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 Company, is in full force and effect, and
has not been modified or revoked in any manner whatsoever.

 

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
Company’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 Company certify that
all statements and representations made in this Resolution are true and
correct.  This Limited Liability Company
Resolution to Borrow / Grant Collateral / Subordinate Debt is dated
                                                   
..

 

	
   

  	
   

  	
  CERTIFIED TO AND ATTESTED BY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  X

  	
   

  
	
   

  	
   

  	
   
  JACK FRAHM, SECRETARY

  

 

NOTE: 
If the members signing this Resolution are
designated by the foregoing document as one of the members authorized to act on
the Company’s behalf.  It is advisable
to have this Resolution signed by at least one non-authorized member of the
Company.

 

9

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