Document:

Exhibit
10.2

 

FIRST
AMENDMENT TO THE

AMENDED
AND RESTATED CONSTRUCTION LOAN AGREEMENT

 

This First Amendment to the Amended and Restated Construction Loan
Agreement (the “First Amendment”) is made and entered into effective as of the     
day of January 2008 (“Effective Date”), by and between LSCP, LLLP, an Iowa limited liability limited partnership (“LSCP,
LLLP”), successor in interest to LSCP, L.P., an Iowa limited partnership (“LSCP,
L.P.”), with its principal offices in Marcus, Iowa (LSCP, LLLP and LSCP, L.P.
are referred to collectively as the “Borrower”), and FIRST
NATIONAL BANK OF OMAHA, a national banking association with
principal offices in Omaha, Nebraska (the “Bank”).

 

WHEREAS, the Bank and Borrower have entered into that certain Amended
and Restated Construction Loan Agreement dated as of April 5, 2007 (the “Loan
Agreement”); and

 

WHEREAS, the Borrower desires to modify and amend
the Loan Agreement and the obligations of the Borrower pursuant to the Loan
Documents, as hereinafter provided; and

 

WHEREAS, the Bank has agreed, on its own
behalf and with the required consent of the participants, to make such
amendments, subject to the terms and conditions set forth in this First
Amendment.

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual promises, covenants and agreements set forth in the Loan
Agreement and the mutual covenants and agreements contained herein, the Borrower
and Bank mutually agree as follows:

 

1.             Definitions.  Unless otherwise defined in this First
Amendment, each capitalized term used in this First Amendment has the meaning
ascribed to it in the Loan Agreement.

 

2.             Amendments
to Definitions.  The following
defined terms as reflected in Section 1.01 of the Agreement shall be, and
hereby are, deleted in their entirety and replaced by the definition reflected
below for each such defined term:

 

““Agreement” shall mean the Loan Agreement,
as defined above, and shall include all schedules and exhibits to the Loan
Agreement, in each case as amended, supplemented, or modified by the terms and
provisions of the First Amendment, and as may be further amended, supplemented,
or modified from time to time in accordance with the terms of this Agreement.”

 

““Total Expansion Facility
Costs” means an amount equal to Seventy Five Million and No/100ths
Dollars ($75,000,000.00).

 

3.             Additional
Definitions.  The Parties agree that
the following defined term shall be inserted, in alphabetical order, in Section 1.01
of the Agreement:

 

““Corn Oil Separation Unit
Agreement” means that agreement by and between Borrower and ICM, Inc.,
a Kansas corporation, dated January     , 2008,
relating to the 

 

 

purchase and installation
of a corn oil separation unit for the Expansion Facility for $2,000,000.00.”

 

““Vision” means Vision Processing
Technologies, Inc., a Minnesota corporation.”

 

““Vision Letter of Intent” means that
Binding Letter of Intent by and between the Borrower and Vision, dated January 7,
2008.”

 

4.             Amendment to Section 3.04.  Section 3.04 of the Agreement shall be,
and hereby is, deleted in its entirety and replaced with the following:

 

Section 3.04. Total
Expansion Facility Costs and Project Cost Overruns.  The Borrower agrees that all costs incurred
by the Borrower relating to the Expansion Facility including the corn oil
separation unit in excess of the Construction Loan Commitment shall be paid
solely by the Borrower without the incurrence of any third-party borrowings or
debt.  The Borrower also agrees that all
costs incurred by the Borrower relating to the Expansion Facility in excess of
the Total Expansion Facility Costs shall be paid solely by the Borrower and the
Borrower shall immediately deliver additional funds to the Bank to fund any and
all costs of the Expansion Facility in excess of the Total Expansion Facility
Costs upon receipt of written request from the Bank relating thereto.  Notwithstanding the foregoing, Borrower shall
be entitled to apply any previously achieved savings in any completed category
of the Expansion Facility budget to pay for any such cost overruns.  In addition, Borrower may from time to time
request that the contingency fund line item in the Expansion Facility budget be
reallocated to pay needed costs of the Expansion Facility.  Such requests shall be subject to Bank’s
approval in its reasonable discretion, which shall not be unreasonably
withheld.

 

5.             Amendment to Section 3.07.  Section 3.07 of the Agreement shall be,
and hereby is, deleted in its entirety and replaced with the following:

 

Section 3.07. Miscellaneous
Procedures.  The Bank
may establish reasonable additional procedures regarding disbursements and Draw
Requests to assure the proceeds of the Construction Loan are paid only to those
Persons entitled to the same, and that the liens securing the Obligations are
in all cases first and paramount liens on the Property and all other assets of
the Borrower, except to the extent, and solely to the extent, provided for
herein to the contrary, including, but not limited to, the following procedures
in connection with the costs incurred by the Borrower relating to the Total
Expansion Facility Costs in excess of the Construction Loan Commitment:

 

(a)           A written conditional general lien
waiver delivered to the Bank and Disbursing Agent, effective to waive any lien
arising under the laws of the State of Iowa, relating to payments made under or
pursuant to the Corn Oil Separation Unit Agreement; and

 

(b)           A written final general lien waiver
delivered to the Bank and Disbursing Agent, effective to waive any lien arising
under the laws of the State of Iowa, 
relating to 

 

2

 

any final payment made
under or pursuant to the Corn Oil Separation Unit Agreement; and

 

(c)           A document from the Borrower and, if
applicable, the Independent Inspector, requesting
and/or approving the amount of the approved construction costs,
conformance thereof with the Schedule of Values and the Budget Variance Report
delivered to the Bank, each as amended to reflect the terms and provisions of
this First Amendment; and

 

(d)           Invoices from the Borrower or ICM, Inc.
relating to the Corn Oil Separation Unit Agreement, and such other supporting
evidence as may be reasonably requested by the Bank to substantiate all
payments which are to be made under the Corn Oil Separation Unit Agreement.

 

Further, the Bank may establish reasonable additional
procedures regarding disbursements under and pursuant to the Term Notes, the
Operating Note, or the Existing Term Notes to assure compliance by the Borrower
with the terms and provisions of this Agreement, the Loan Documents and the
respective Term Notes, Operating Note or 

Existing Term Notes, as the case may be.

 

6.             Section 4.02.  Section 4.02 of the Agreement shall be,
and hereby is, deleted in its entirety and replaced with the following:

 

“The obligation of the Bank to make any additional Extensions of
Credit, other than Extensions of Credit under the Operating Note, shall be
subject to the condition precedent, unless waived or extended in writing by the
Bank, that the Borrower shall be in compliance with the conditions set forth in
Section 4.01 of this Agreement and to the further condition precedent that
on the date of such Extension of Credit no determination shall have been made
by the Bank, in the exercise of its reasonable judgment, that the undisbursed
amount of the Construction Loan pluse the $2,000,000 to be paid by the Borrower
under the Corn Oil Separation Unit Agreement is less than the amount required
to pay all costs and expenses of any kind which reasonably may be anticipated
in connection with the completion of the Expansion Facility and the corn oil
separation unit; or, if such a determination has been made and notice thereof
sent to the Borrower in accordance with this Agreement, the Borrower shall have
deposited the necessary funds with the Bank in accordance with Section 3.04
of this Agreement.”

 

In addition to the obligations contained in Section 4.02 of the
Agreement related to any additional Extensions of Credit, other than Extensions
of Credit under the Operating Note, the Borrower shall also promptly deliver to
the Bank the following:

 

(a)           A certified copy of the
Corn Oil Separation Unit Agreement executed by ICM, Inc. and Borrower;

 

(b)           Copy of the
Expansion Facility Plans related to the Corn Oil Separation Unit Agreement;

 

(c)           A certified copy of
the executed Vision Letter of Intent;

 

3

 

(d)           Certified copies of any
and all documents related to the investment by the Borrower in Vision; and

 

(e)           The Reaffirmation of
Guaranty duly executed by the Guarantor in the form attached hereto as Exhibit “A”
and incorporated herein by this reference.

 

7.             Amendment to Section 5.16.   Section 5.16 of the Agreement shall be,
and hereby is, deleted in its entirety and replaced with the following:

 

“Section 5.16. 
No Subsidiary.   Except
for Borrower’s investment in Akron and Vision, the Borrower does not have a
Subsidiary.”

 

                8.             Amendment to Sections 6.04(b), 6.04(k) &
6.04(r).   Section 6.04(b), Section 6.04(k),
and Section 6.04(r) of the Agreement shall be, and hereby are,
deleted in their entirety and replaced with the following:

 

“(b)         form or own any Subsidiary except for
investments and contributions to Akron and Vision;”

 

“(k)         consolidate, merge,
pool, syndicate or otherwise combine with any other entity, give any
preferential treatment or make any advance, directly or indirectly, by way of
loan, gift, contribution, investment, bonus or otherwise to any Affiliate or
any other Person; (A) notwithstanding the foregoing and provided the same
does not otherwise violate any other covenant hereunder or violate any
provision of the Operating Agreement of Akron, the Bank consents to the
Borrower making equity contributions/investments in an aggregate amount of
Twenty Million and No/100ths Dollars ($20,000,000.00) to Akron provided that,
in connection with such equity contributions/investments, the Borrower shall (i) collaterally
assign to the Bank all of its right, title and interest in and to any and all
membership or other equity interests of Akron, (ii) deliver to the Bank a
written consent to such collateral assignment, duly executed by all of the
Directors of Akron, in form and substance satisfactory to the Bank, (iii) deliver
to the Bank a certified copy of resolutions of the Board of Directors of the
General Partner, in form and substance satisfactory to the Bank, authorizing
the equity contribution/investment in Akron and the execution, delivery and
performance of the collateral assignment of membership or other equity
interests in Akron and any other documents to be delivered by the Borrower in
connection therewith, and (iv) deliver any certificates evidencing the
membership or other equity interests of Akron and any and all financing
statements or other documents sufficient to create a valid and perfected first
priority security interest in and to the membership or other equity interests,
together with all increases, replacements, additions, substitutions, and cash
and noncash proceeds thereof, in favor of the Bank as additional collateral to
secure repayment of Borrower’s Obligations under this Agreement; and (B) notwithstanding
the foregoing and provided the same does not otherwise violate any other
covenant hereunder, the Bank consents to the Borrower making equity
contributions/investments in an aggregate amount of Two Million and No/100ths
Dollars ($2,000,000.00) to Vision in conformity with the Vision Letter of
Intent provided, however, Borrower shall (i) deliver certified copies of
any and all documents evidencing the equity interests of Vision acquired by the
Borrower under 

 

4

 

the terms of the Vision Letter of Intent and (ii) not make any
other or make any additional advance, directly or indirectly, by way of loan,
gift, contribution, investment, bonus or otherwise to Vision without the Bank’s
prior written authorization;”

 

“(r)          amend, or approve or cause any
amendments, relating to the Schedule of Values or the Budget Variance Report
(other than in conformity with the First Amendment) without the prior written
approval of the Bank; or”

 

9.             Amendment to Section 7.01(w).
Section 7.01(w) of the Agreement shall be, and hereby is, deleted in
its entirety and replaced with the following:

 

“(w)        the Borrower shall establish a
Subsidiary without the prior written consent of the Bank, except for Akron and
Vision; or”

 

10.           Ratification of Agreement; No
Waiver.  The Borrower and Bank agree
that, except as expressly provided in this First Amendment, all terms and
provisions of the Agreement, including, but not limited to, the financial
covenants set forth in the Agreement, and all other Loan Documents shall remain
unchanged and in full force and effect and are hereby ratified and
confirmed.  No amendment contained in
this First Amendment shall be construed to amend or waive any obligation of the
Borrower under the Agreement or any provision of any of the Loan Documents,
except to the extent of the specific amendment referenced herein.  No delay or omission by the Bank in
exercising any power, right, or remedy shall impair such power, right, or
remedy or be construed as a waiver thereof or an acquiescence therein, and no
single or partial exercise of any such power, right, or remedy shall preclude
other or further exercise thereof or the exercise of any other power, right, or
remedy under the Agreement or any other Loan Documents, or otherwise.

 

11.           Authorization.  By execution hereof, the undersigned
representative of the Borrower hereby represents and warrants that (i) he
is an Authorized Person of the Borrower, (ii) the execution, delivery and
performance of this First Amendment is, and has been, duly authorized, approved
and ratified by all required partnership or company action of the Borrower or
the General Partner, and (iii) the amendments specifically referenced herein
reflect all of the amendments being requested by the Borrower relating to the
terms and provisions of the Agreement and the other Loan Documents.

 

12.           Counterparts.  This First Amendment may be executed in one
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same instrument.  A facsimile
signature will be considered an original signature.

 

13.           Governing Law.
This First Amendment shall be governed by, and construed in accordance with,
the law is of the State of Nebraska, other than its conflicts of law provisions
thereof.

 

14.           Submission to Jurisdiction; Venue.  The Borrower hereby submits to the
jurisdiction of any state or federal court sitting in Omaha, Nebraska, in any
action or proceeding arising out of or relating to this First Amendment and
agrees that all claims in respect of the 

 

5

 

action or proceeding may be heard and
determined in any such court.  The
Borrower also agrees not to bring any action or proceeding arising out of or
relating to this First Amendment in any other court.  The Borrower waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought
and waives any bond, surety, or other security that might be required of the
Bank.  The Borrower agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law or at
equity.  The Borrower hereby waives any
rights it or they may have to transfer or change the venue of any suit, action
or other proceeding brought against the Borrower by the Bank in accordance with
this paragraph or in connection with this First Amendment, the Agreement or any
other Loan Documents.

 

15.           Jury Trial Waiver. THE BANK
AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM,
OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT
OF OR IN ANY WAY RELATED TO THIS FIRST AMENDMENT, THE AGREEMENT OR ANY OF THE
LOAN DOCUMENTS.  NO EMPLOYEE OF THE BANK
HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THE TERMS AND PROVISIONS OF THIS
PARAGRAPH OF THIS FIRST AMENDMENT.

 

16.           Credit Agreement. 
A credit agreement must be in writing to be enforceable under Nebraska
law.  To protect you and us from any
misunderstandings or disappointments, any contract, promise, undertaking, or
offer to forebear repayment of money or to make any other financial accommodation
in connection with this loan of money or grant or extension of credit, or any
amendment of, cancellation of, waiver of, or substitution for any or all of the
terms or provisions of any instrument or document executed in connection with
this loan of money or grant or extension of credit, must be in writing to be
effective.

 

 

IN WITNESS
WHEREOF, the parties have caused this First Amendment to be executed by their
respective officers thereunto duly authorized, as of the Effective Date.

 

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  President/CEO

  
				

 

6

 

	
   

  	
  “Bank”

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST NATIONAL BANK OF OMAHA,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bradley J. Brummund

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
				

 

7

 

FIRST
AMENDMENT TO THE

 

AMENDED
AND RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT “A”

 

REAFFIRMATION
OF GUARANTY

 

This will confirm (a) that the undersigned hereby consents (i) to
the terms of that First Amendment to the Amended and Restated Construction Loan
Agreement (the “First Amendment”) of even date herewith by and between the
Borrower and the Bank and (ii) to the execution and delivery of the First
Amendment by the Borrower; (b) that the Obligations of the Borrower to the
Bank under the Agreement as amended by the First Amendment constitutes an
obligation of the Guarantor to the Bank under the terms and conditions of the
Guaranty; and (c) that all references to the “Loan Agreement” contained in
the Guaranty shall constitute references to the Agreement as amended by the
First Amendment, and as the same may be amended, restated or otherwise modified
from time to time hereafter.  The
undersigned confirms to the Bank that all of the terms, conditions, provisions,
agreement, requirements, promises, obligations, duties, covenants, and
representations of the undersigned under the Guaranty, and any and all other
documents and agreements entered into with respect to the obligations under the
Guaranty, are incorporated herein by this referenced as modified hereby and as
so modified, are hereby ratified and affirmed in all respects by the
undersigned.

 

 

	
   

  	
  “Guarantor”

  
	
   

  	
   

  
	
   

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
  an Iowa limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   Stephen G. Roe

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Stephen G. Roe

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CEO/President

  
					

 

8

 

SECOND AMENDMENT TO THE

AMENDED AND RESTATED CONSTRUCTION LOAN
AGREEMENT

 

This Second
Amendment to the Amended and Restated Construction Loan Agreement (the “Second
Amendment”) is made and entered into effective as of the 31st day of March 2008
(“Effective Date”), by and between LSCP, LLLP, an
Iowa limited liability limited partnership (“LSCP, LLLP”), successor in
interest to LSCP, L.P., an Iowa limited partnership (“LSCP, L.P.”), with its
principal offices in Marcus, Iowa (LSCP, LLLP and LSCP, L.P. are referred to
collectively as the “Borrower”), and FIRST NATIONAL BANK OF
OMAHA, a national banking association with principal offices in
Omaha, Nebraska (the “Bank”).

 

WHEREAS, the Bank
and Borrower have entered into that certain Amended and Restated Construction
Loan Agreement dated as of April 5, 2007 (the “Initial Loan Agreement”),
as amended by that certain First Amendment to Amended & Restated
Construction Loan Agreement dated as of January       ,
2008 (the “First Amendment”) (the Initial Loan Agreement and the First
Amendment are herein jointly referred to as the “Loan Agreement”); and

 

WHEREAS, the Borrower desires to modify and amend the Loan Agreement
and the obligations of the Borrower pursuant to the Loan Documents, as hereinafter
provided; and

 

WHEREAS, the Bank has agreed, on its own behalf and with the required
consent of the participants, to make such amendments, subject to the terms and
conditions set forth in this Second Amendment.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements set forth in the Loan Agreement and the
mutual covenants and agreements contained herein, the Borrower and Bank
mutually agree as follows:

 

1.             Definitions.  Unless otherwise defined in this Second
Amendment, each capitalized term used in this Second Amendment, including its
preamble and recitals, has the meaning ascribed to it in the Loan Agreement.

 

2.             Amendments to
Definitions.  The following defined
terms as reflected in Section 1.01 of the Agreement shall be, and hereby
are, deleted in their entirety and replaced by the definition reflected below
for each such defined term:

 

““Agreement” shall have the meaning given such term in the
preamble hereto, and shall include all schedules and exhibits hereto, in each
case as amended, supplemented, or modified by the terms and provisions of (i) the
First Amendment to Amended and Restated Construction Loan Agreement dated as of
January       , 2008, by and between
Borrower and the Bank, and (ii) the Second Amendment to Amended and
Restated Construction Loan Agreement dated as of March 31, 2008, by and
between the Borrower and the Bank, and as may be further amended, supplemented,
or modified from time to time in accordance with the terms of this Agreement.

 

 

“Operating Loan Termination
Date”  means the earliest to
occur of the following: (a) April 30, 2008, or such later date to
which the Operating Loan Termination Date has been extended by written
agreement by the Bank, (b) the date the Obligations are accelerated
pursuant to the terms and provisions of this Agreement or the Operating Note, (c) the
date the Bank receives notice in writing from the Borrower of the Borrower’s
election to terminate the Operating Note as described in Section 2.06 of
this Agreement and (d) the date the Bank receives (i) notice in
writing from the Borrower of the Borrower’s election to terminate this
Agreement or (ii) indefeasible payment in full of the Obligations.”

 

3.             Extension of
Operating Loan Termination Date.  The
Parties agree that the Operating Loan Termination Date shall be extend to April 30,
2008, subject to and in accordance with the amended definition of the Operating
Loan Termination Date stated in Section 2 above.  Upon the execution of this Second Amendment,
Borrower agrees to deliver to the Bank an Operating Note in the form attached
hereto as Exhibit “A” and incorporated herein by this reference.  Such Operating Note shall be an extension of
the Operating Note, dated April 5, 2007, and attached to the Loan
Agreement as Exhibit “G”, and all references to the Operating Note in the
Loan Agreement or in any of the other Loan Documents, shall be deemed for all
purposes to be a reference to the extended Operating Note attached hereto.

 

4.             Reaffirmation of
Guaranty.  Upon the execution hereof,
the Borrower shall deliver to the Bank a Reaffirmation of Guaranty duly
executed by the Guarantor in the form attached hereto as Exhibit “B” and
incorporated herein by this reference.

 

5.             Ratification of
Loan Agreement; No Waiver.  The
Borrower and Bank agree that, except as expressly provided in this Second
Amendment, all terms and provisions of the Loan Agreement, including, but not
limited to, the financial covenants set forth in the Loan Agreement, and all
other Loan Documents shall remain unchanged and in full force and effect and
are hereby ratified and confirmed.  No
amendment contained in this Second Amendment shall be construed to amend or
waive any obligation of the Borrower under the Loan Agreement or any provision
of any of the Loan Documents, except to the extent of the specific amendment
referenced herein.  No delay or omission
by the Bank in exercising any power, right, or remedy shall impair such power,
right, or remedy or be construed as a waiver thereof of any acquiescence
therein, and no single or partial exercise of any such power, right, or remedy
shall preclude other or further exercise thereof or the exercise of any other
power, right, or remedy under the Loan Agreement or any other Loan Documents,
or otherwise.

 

6.             Authorization.  By execution hereof, the undersigned
representative of the Borrower hereby represents and warrants that (i) he
is an Authorized Person of the Borrower, (ii) the execution, delivery and
performance of this Second Amendment is, and has been, duly authorized, approved
and ratified by all required partnership or company action of the Borrower or
the General Partner, and (iii) the amendments specifically referenced
herein reflect all of the amendments being requested by the Borrower relating
to the terms and provisions of the Agreement and the other Loan Documents.

 

2

 

7.             Governing Law. This Second
Amendment shall be governed by, and construed in accordance with, the law is of
the State of Nebraska, other than its conflicts of law provisions thereof.

 

8.             Submission
to Jurisdiction; Venue.  The Borrower
hereby submits to the jurisdiction of any state or federal court sitting in
Omaha, Nebraska, in any action or proceeding arising out of or relating to this
Second Amendment and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court.  The Borrower also agrees not to bring any
action or proceeding arising out of or relating to this Second Amendment in any
other court.  The Borrower waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required
of the Bank.  The Borrower agrees that a
final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law
or at equity.  The Borrower hereby waives
any rights it or they may have to transfer or change the venue of any suit,
action or other proceeding brought against the Borrower by the Bank in
accordance with this paragraph or in connection with this First Amendment, the
Agreement or any other Loan Documents.

 

9.             Jury
Trial Waiver. THE BANK AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS FIRST AMENDMENT, THE
AGREEMENT OR ANY OF THE LOAN DOCUMENTS. 
NO EMPLOYEE OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THE
TERMS AND PROVISIONS OF THIS PARAGRAPH OF THIS FIRST AMENDMENT.

 

10.           Credit
Agreement.  A CREDIT AGREEMENT MUST
BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW.  TO PROTECT YOU AND US FROM ANY
MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING, OR
OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL
ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF
CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR
ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN
CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN
WRITING TO BE EFFECTIVE.

 

11.           Counterparts. 
This Second Amendment may be executed in one or more counterparts, any
one of which need not contain the signatures of more than one party, but all
such counterparts taken together will constitute one and the same
instrument.  A facsimile signature (or
signatures sent by electronic mail in .pdf format) will be deemed an original
signature.

 

[REMAINDER OF
PAGE INTENTIONALLY BLANK; SIGNATURE PAGE TO FOLLOW]

 

3

 

IN WITNESS WHEREOF, the parties
hereto have executed this Second Amendment as of the date first written above.

 

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  General Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “Bank”

  
	
   

  	
   

  
	
   

  	
  FIRST NATIONAL BANK OF OMAHA,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bradley J. Brummund

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

4

 

SECOND AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT “A”

 

FORM OF
OPERATING NOTE

 

[SEE THE ATTACHED]

 

5

 

SECOND AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT “B”

 

REAFFIRMATION
OF GUARANTY

 

This will confirm (a) that the undersigned hereby consents (i) to
the terms of that First Amendment to the Amended and Restated Construction Loan
Agreement (the “First Amendment”) of even date herewith by and between the
Borrower and the Bank and (ii) to the execution and delivery of the First
Amendment by the Borrower; (b) that the Obligations of the Borrower to the
Bank under the Agreement as amended by the First Amendment constitutes an
obligation of the Guarantor to the Bank under the terms and conditions of the
Guaranty; and (c) that all references to the “Loan Agreement” contained in
the Guaranty shall constitute references to the Agreement as amended by the
First Amendment, and as the same may be amended, restated or otherwise modified
from time to time hereafter.  The
undersigned confirms to the Bank that all of the terms, conditions, provisions,
agreement, requirements, promises, obligations, duties, covenants, and
representations of the undersigned under the Guaranty, and any and all other
documents and agreements entered into with respect to the obligations under the
Guaranty, are incorporated herein by this referenced as modified hereby and as
so modified, are hereby ratified and affirmed in all respects by the
undersigned.

 

 

	
   

  	
  “Guarantor”

  
	
   

  	
   

  
	
   

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
  an Iowa limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Stephen G. Roe

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CEO/President

  
					

 

6

 

THIRD AMENDMENT TO THE

AMENDED AND RESTATED CONSTRUCTION LOAN
AGREEMENT

 

This Third Amendment to the Amended and Restated Construction Loan
Agreement (the “Third Amendment”) is made and entered into effective as of the 30th
day of April 2008 (“Effective Date”), by and between LSCP, LLLP,
an Iowa limited liability limited partnership (“LSCP, LLLP”), successor in
interest to LSCP, L.P., an Iowa limited partnership (“LSCP, L.P.”), with its
principal offices in Marcus, Iowa (LSCP, LLLP and LSCP, L.P. are referred to
collectively as the “Borrower”), and FIRST NATIONAL BANK OF
OMAHA, a national banking association with principal offices in
Omaha, Nebraska (the “Bank”).

 

WHEREAS, the Bank and Borrower have entered into that certain Amended
and Restated Construction Loan Agreement dated as of April 5, 2007 (the “Initial
Loan Agreement”), as amended by (i) that certain First Amendment to
Amended and Restated Construction Loan Agreement dated as of January 31,
2008 (the “First Amendment”) and (ii) that certain Second Amendment to
Amended and Restated Construction Loan Agreement dated as of March 31,
2008 (the “Second Amendment”)  (the
Initial Loan Agreement as amended by the First Amendment and the Second
Amendment are herein jointly referred to as the “Loan Agreement”); and

 

WHEREAS, the Borrower desires to modify and amend the Loan Agreement
and the obligations of the Borrower pursuant to the Loan Documents, as
hereinafter provided; and

 

WHEREAS, the Bank has agreed, on its own behalf and with the required
consent of the participants, to make such amendments, subject to the terms and
conditions set forth in this Third Amendment.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements set forth in the Loan Agreement and the mutual
covenants and agreements contained herein, the Borrower and Bank mutually agree
as follows:

 

1.             Definitions.  Unless otherwise defined in this Third
Amendment, each capitalized term used in this Third Amendment, including its
preamble and recitals, has the meaning ascribed to it in the Loan Agreement.

 

2.             Amendments to
Definitions.  The following defined
terms as reflected in Section 1.01 of the Loan Agreement shall be, and
hereby are, deleted in their entirety and replaced by the definition reflected
below for each such defined term:

 

““Agreement”
shall have the meaning given such term in the preamble hereto, and shall
include all schedules and exhibits thereto, in each case as amended,
supplemented, or modified by the terms and provisions of (i) the First
Amendment to Amended and Restated Construction Loan Agreement dated as of January 31,
2008, by and between Borrower and the Bank, (ii) the Second Amendment to
Amended and Restated Construction Loan Agreement dated as of March 31,
2008, by and between the Borrower and the Bank, and (iii) the Third
Amendment to Amended and Restated Construction 

 

 

Loan Agreement dated as of April 30, 2008, by and between the
Borrower and the Bank, and as may be further amended, supplemented, or modified
from time to time in accordance with the terms of this Agreement.

 

“Operating Loan Termination
Date”  means the earliest to
occur of the following: (a) June 1, 2008, or such later date to which
the Operating Loan Termination Date has been extended by written agreement by
the Bank, (b) the date the Obligations are accelerated pursuant to the
terms and provisions of this Agreement or the Operating Note, (c) the date
the Bank receives notice in writing from the Borrower of the Borrower’s
election to terminate the Operating Note as described in Section 2.06 of
this Agreement and (d) the date the Bank receives (i) notice in
writing from the Borrower of the Borrower’s election to terminate this
Agreement or (ii) indefeasible payment in full of the Obligations.”

 

3.             Extension of
Operating Loan Termination Date.  The
parties agree that the Operating Loan Termination Date shall be extended to June 1,
2008, subject to and in accordance with the amended definition of the Operating
Loan Termination Date stated in Section 2 above.  Upon the execution of this Third Amendment,
Borrower agrees to deliver to the Bank an Operating Note in the form attached
hereto as Exhibit “A” and incorporated herein by this reference.  Such Operating Note shall be an extension of
the Operating Note, dated March 31, 2008, and attached to the Loan
Agreement as Exhibit “G,” and all references to the Operating Note in the
Loan Agreement or in any of the other Loan Documents, shall be deemed for all
purposes to be a reference to the extended Operating Note attached hereto.

 

4.             Reaffirmation of Guaranty.  Upon the execution hereof, the Borrower shall
deliver to the Bank a Reaffirmation of Guaranty duly executed by the Guarantor
in the form attached hereto as Exhibit “B” and incorporated herein by this
reference.

 

5.             Ratification of Loan
Agreement; No Waiver.  The Borrower
and Bank agree that, except as expressly provided in this Third Amendment, all
terms and provisions of the Loan Agreement, including, but not limited to, the
financial covenants set forth in the Loan Agreement, and all other Loan
Documents shall remain unchanged and in full force and effect and are hereby
ratified and confirmed.  No amendment
contained in this Third Amendment shall be construed to amend or waive any
obligation of the Borrower under the Loan Agreement or any provision of any of
the Loan Documents, except to the extent of the specific amendment referenced
herein.  No delay or omission by the Bank
in exercising any power, right, or remedy shall impair such power, right, or
remedy or be construed as a waiver thereof or an acquiescence therein, and no
single or partial exercise of any such power, right, or remedy shall preclude
other or further exercise thereof or the exercise of any other power, right, or
remedy under the Loan Agreement or any other Loan Documents, or otherwise.

 

6.             Authorization.  By execution hereof, the undersigned
representative of the Borrower hereby represents and warrants that (i) he
is an Authorized Person of the Borrower, (ii) the execution, delivery and
performance of this Third Amendment is, and has been, duly authorized, approved
and ratified by all required partnership or company action of the Borrower or
the General Partner, and (iii) the amendments specifically referenced
herein reflect all of the 

 

 

amendments being requested by the Borrower relating to the terms and
provisions of the Loan Agreement and the other Loan Documents.

 

7.             Governing
Law.  This Third Amendment shall be
governed by, and construed in accordance with, the laws of the State of Nebraska,
other than conflict of law provisions thereof.

 

8.             Submission
to Jurisdiction; Venue.  The Borrower
hereby submits to the jurisdiction of any state or federal court sitting in
Omaha, Nebraska, in any action or proceeding arising out of or relating to this
Third Amendment and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court.  The Borrower also agrees not to bring any
action or proceeding arising out of or relating to this Third Amendment in any
other court.  The Borrower waives any
defense of inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required
of the Bank.  The Borrower agrees that a
final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law
or at equity.  The Borrower hereby waives
any rights it or they may have to transfer or change the venue of any suit, action
or other proceeding brought against the Borrower by the Bank in accordance with
this paragraph or in connection with this Third Amendment, the Loan Agreement
or any other Loan Documents.

 

9.             Jury
Trial Waiver. THE BANK AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS THIRD AMENDMENT, THE
LOAN AGREEMENT OR ANY OF THE LOAN DOCUMENTS. 
NO EMPLOYEE OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THE
TERMS AND PROVISIONS OF THIS PARAGRAPH OF THIS THIRD AMENDMENT.

 

10.           CREDIT
AGREEMENT.  A CREDIT AGREEMENT MUST
BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW.  TO PROTECT YOU AND US FROM ANY
MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING, OR
OFFER TO FORBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL
ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF
CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR
ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN
CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN
WRITING TO BE EFFECTIVE.

 

11.           Counterparts.  This Third Amendment may be executed in one
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same instrument.  A facsimile
signature (or signatures sent by electronic mail in .pdf format) will be deemed
an original signature.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the date first written above.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “Bank”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FIRST NATIONAL BANK OF OMAHA,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Bradley
  J. Brummund

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Vice President

  
								

 

 

THIRD AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT “A”

 

FORM OF
OPERATING NOTE

 

[SEE THE ATTACHED]

 

 

THIRD AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT “B”

 

REAFFIRMATION
OF GUARANTY

 

[SEE THE ATTACHED]

 

 

REAFFIRMATION
OF GUARANTY

 

This will confirm (a) that the undersigned hereby consents (i) to
the terms of that Third Amendment to the Amended and Restated Construction Loan
Agreement (the “Third Amendment”) of even date herewith by and between the
Borrower and the Bank and (ii) to the execution and delivery of the Third Amendment
by the Borrower; (b) that the Obligations of the Borrower to the Bank
under the Loan Agreement (as defined in the Third Amendment) as amended by the Third
Amendment constitutes an obligation of the Guarantor to the Bank under the
terms and conditions of the Guaranty; and (c) that all references to the “Loan
Agreement” contained in the Guaranty shall constitute references to the Loan Agreement
as amended by the Third Amendment, and as the same may be amended, restated or
otherwise modified from time to time hereafter. 
The undersigned confirms to the Bank that all of the terms, conditions,
provisions, agreement, requirements, promises, obligations, duties, covenants,
and representations of the undersigned under the Guaranty, and any and all
other documents and agreements entered into with respect to the obligations
under the Guaranty, are incorporated herein by this referenced as modified hereby
and as so modified, are hereby ratified and affirmed in all respects by the
undersigned.

 

Dated as of April 30, 2008.

 

 

	
   

  	
  “Guarantor”

  
	
   

  	
   

  
	
   

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
  an Iowa limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Stephen G.
  Roe

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    President

  
						

 

 

OPERATING NOTE

 

	
  $5,000,000.00

  	
   

  	
  April 30, 2008

  
	
   

  	
   

  	
  Omaha, Nebraska

  

 

FOR VALUE
RECEIVED, the undersigned, LSCP, LLLP, an Iowa limited liability limited
partnership  (the “Borrower”), HEREBY PROMISES
TO PAY to the order of FIRST NATIONAL BANK OF OMAHA, a national banking
association (the “Bank”), at its principal office located at 1620 Dodge Street,
STOP 1050, Omaha, Nebraska 68197, in lawful money of the United States and in
immediately available funds, the principal amount of Five Million and No/100ths
Dollars ($5,000,000.00) or, so much thereof as may be advanced by the Bank
pursuant to the terms and provisions of the Loan Agreement, as hereinafter
defined, between the Borrower and the Bank (the “Principal Amount”).

 

The Borrower
further agrees to pay (i) the Principal Amount and (ii) interest on
the unpaid Principal Amount from the date hereof at the rates and times
specified in the Loan Agreement, without off-set, deduction or counterclaim,
until paid in full.  The unpaid Principal
Amount hereof, together with all accrued and unpaid interest hereunder, shall
be due and payable in accordance with the terms and provisions of the Loan
Agreement, but in any event not later than June 1, 2008.

 

This Operating
Note (this “Operating Note”) is an extension of the Operating Note dated March 31,
2008 and attached as Exhibit “G” to that certain Amended and Restated
Construction Loan Agreement, dated April 5, 2007, by and between the
Borrower and the Bank (the “Initial Loan Agreement”), as amended by that
certain First Amendment to Amended and Restated Construction Loan Agreement
dated as of January 31, 2008 (the “First Amendment”), as further amended
by that certain Second Amendment to the Amended and Restated Construction Loan
Agreement dated as of March 31, 2008 (the “Second Amendment”), as further
amended by that certain Third Amendment to the Amended and Restated
Construction Loan Agreement dated as of April 30, 2008 (the “Third
Amendment”) (each as amended, supplemented, or otherwise modified from time to
time, the Initial Loan Agreement, the First Amendment, the Second Amendment,
and the Third Amendment are herein referred to collectively as the “Loan
Agreement”), the terms and conditions of which are incorporated herein by this
reference.  All references to the
Operating Note in the Loan Agreement or in any of the other Loan Documents,
shall be deemed for all purposes to be a reference to this Operating Note. This
Operating Note is entitled to the benefits and security set forth in the Loan
Documents, including, but not limited to, the Security Agreement, the Mortgage,
the Assignment of Rents and Leases and the Guaranty.  In the event of a conflict or inconsistency
between the terms of this Operating Note and the Loan Agreement, the terms and
provisions of the Loan Agreement shall govern. 
Capitalized terms not otherwise defined in this Operating Note which are
defined in the Loan Agreement shall have the meanings ascribed thereto in the
Loan Agreement.

 

The Loan
Agreement, among other things, contains (i) enumerated Events of Default, (ii) provisions
for acceleration of the maturity of this Operating Note upon the happening of
certain stated events, (iii) provisions for prepayments of the Principal
Amount of this Operating Note prior to the maturity of the Operating Note, and (iv) provisions
for modification or waiver of this Operating Note upon the terms and conditions
specified in the Loan Agreement.

 

 

The occurrence
of any Event of Default enumerated in the Loan Agreement or any of the other
Loan Documents shall constitute an Event of Default under this Operating
Note.  Upon any such Event of Default,
the Bank shall have any and all remedies provided in the Loan Agreement or any
of the other Loan Documents, including but not limited to the right, but not
the obligation, to accelerate the due date of this Operating Note and declare
all obligations set forth herein immediately due and payable, and such other
remedies as are provided by law.  No
failure to exercise, and no delay in exercising, any rights hereunder on the
part of the Bank shall operate as a waiver of such rights.

 

Borrower
acknowledges that the obligations evidenced by this Operating Note are for
business purposes only and are not an extension of consumer or individual
credit.

 

THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY GOVERNING LAW,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, NOTICE OF DISHONOR, PROTEST,
NOTICE OF PROTEST, DEMAND, NOTICE OF EVERY KIND IN CONNECTION HEREWITH AND
DILIGENCE IN ENFORCING PAYMENT OR BRINGING SUIT AGAINST ANY PARTY HERETO.

 

This Operating Note is made under and
governed by the laws of, and shall be deemed to have been executed in, the
State of Nebraska without giving effect to choice of law principles (whether of the State of Nebraska or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Nebraska.

 

THE BANK AND THE BORROWER HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT
OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS
OPERATING NOTE.  NO OFFICER OR EMPLOYEE
OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

 

Time is of the
essence as to each and every date and each and every obligation of the Borrower
set forth in this Operating Note.

 

IN WITNESS WHEREOF, the Borrower has caused
this Operating Note to be executed and delivered to the Bank as of the day and
year first written above.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  

 

 

FOURTH AMENDMENT TO THE

AMENDED AND RESTATED CONSTRUCTION LOAN
AGREEMENT

 

This Fourth Amendment to the Amended and Restated Construction Loan
Agreement (the “Fourth Amendment”) is made and entered into effective as of the
1st day of June 2008 (“Effective Date”), by and between LSCP, LLLP, an Iowa limited liability limited partnership
(“LSCP, LLLP”), successor in interest to LSCP, L.P., an Iowa limited
partnership (“LSCP, L.P.”), with its principal offices in Marcus, Iowa (LSCP,
LLLP and LSCP, L.P. are referred to collectively as the “Borrower”), and FIRST NATIONAL BANK OF OMAHA, a national banking association
with principal offices in Omaha, Nebraska (the “Bank”).

 

WHEREAS, the Bank and Borrower have entered into that certain Amended
and Restated Construction Loan Agreement dated as of April 5, 2007 (the
“Initial Loan Agreement”), as amended by (i) that certain First Amendment
to Amended & Restated Construction Loan Agreement dated as of January 31,
2008 (the “First Amendment”), (ii) that certain Second Amendment to
Amended and Restated Construction Loan Agreement dated as of March 31,
2008 (the “Second Amendment”), and (iii) that certain Third Amendment to
Amended and Restated Construction Loan Agreement dated as of April 30,
2008 (the “Third Amendment”) (the Initial Loan Agreement as amended by the
First Amendment, the Second Amendment, and the Third Amendment are herein
collectively referred to as the “Loan Agreement”); and

 

WHEREAS, the Borrower desires to modify and amend the Loan Agreement
and the Obligations of the Borrower pursuant to the Loan Documents, as
hereinafter provided; and

 

WHEREAS, the Bank has agreed, on its own behalf and with the required
consent of the participants, to make such amendments, subject to the terms and
conditions set forth in this Fourth Amendment.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements set forth in the Loan Agreement and the
mutual covenants and agreements contained herein, the Borrower and Bank
mutually agree as follows:

 

1.             Definitions.  Unless otherwise defined in this Fourth
Amendment, each capitalized term used in this Fourth Amendment, including its
preamble and recitals, has the meaning ascribed to it in the Loan Agreement.

 

2.             Amendments to
Definitions.  The following defined
terms as reflected in Section 1.01 of the Agreement shall be, and hereby
are, deleted in their entirety and replaced by the definition reflected below
for each such defined term:

 

““Agreement”
shall have the meaning given such term in the preamble hereto, and shall
include all schedules and exhibits thereto, in each case as amended,
supplemented, or modified by the terms and provisions of (i) the First
Amendment to Amended and Restated Construction Loan Agreement dated as of January 31,
2008, by and between Borrower and the Bank, (ii) the Second Amendment to
Amended and Restated Construction Loan Agreement dated as of March 31,
2008, by and between the Borrower 

 

1

 

and the Bank, (iii) the Third Amendment to Amended and Restated
Construction Loan Agreement dated as of April 30, 2008, by and between the
Borrower and the Bank, and (iv) the Fourth Amendment to Amended and
Restated Construction Loan Agreement dated as of June 1, 2008, by and
between the Borrower and the Bank, and as may be further amended, supplemented,
or modified from time to time in accordance with the terms of this Agreement.

 

“Borrowing Base”
means the lesser of:

 

(a)           Ten Million and No/100ths Dollars
($10,000,000.00) less the aggregate amount of any outstanding Letters of
Credit; or

 

(b)           The aggregate of (i) seventy-five
percent (75%) of the Borrower’s inventory of corn, at current value on the date
reported, plus (ii) seventy-five percent (75%) of the Borrower’s Finished
Goods-Distiller’s Grains Inventory, at current value on the date reported, plus
(iii) seventy-five percent (75%) of the Borrower’s Finished Goods-Ethanol
Inventory, valued at the lower of cost or market, plus (iv) seventy-five
percent (75%) of the amount of the Borrower’s current sales accounts receivable
aged thirty (30) days or less, excluding, however, any accounts receivable
reasonably deemed ineligible by the Bank, and plus (v) seventy-five
percent (75%) of the amount of the Borrower’s current state or federal
incentives accounts receivable, including, but not limited to, USDA CCC
Bio-Energy Accounts Receivable, aged less than one hundred twenty
(120) days.

 

“Existing Swap Loan Termination Date”
means the earlier to occur of (a) July 20, 2008, or (b) the date
the Obligations are accelerated pursuant to this Agreement or the Notes or (c) the
date the Bank has received (i) notice in writing from the Borrower of the
Borrower’s election to terminate this Agreement or (ii) indefeasible
payment in full of the Obligations.”

 

“Mortgage” means the Amended, Restated and Expanded Mortgage,
dated the Closing Date, as amended by the First Amendment to Amended, Restated
and Expanded Mortgage dated as of June 1, 2008, between the Borrower and
the Bank in the form of Exhibit “A” attached hereto and incorporated
herein by this reference creating a first lien on the Property and a security
interest in all of the personal property incorporated therein as a fixture,
each as security for payment of the Obligations.

 

“Operating Loan Termination Date”  means the earliest to occur of the following:
(a) March 31, 2009, or such later date to which the Operating Loan
Termination Date has been extended by written agreement by the Bank, (b) the
date the Obligations are accelerated pursuant to the terms and provisions of
this Agreement or the Operating Note, (c) the date the Bank receives
notice in writing from the Borrower of the Borrower’s election to terminate the
Operating Note as described in Section 2.06 of this Agreement and (d) the
date the Bank receives (i) notice in writing from the Borrower of the
Borrower’s election to terminate this Agreement or (ii) indefeasible
payment in full of the Obligations.”

 

2

 

3.             Extension of
Operating Loan Termination Date.  The
parties agree that the Operating Loan shall be extended to March 31, 2009,
subject to and in accordance with the amended definition of the Operating Loan
Termination Date stated in Section 2 above.  Upon the execution of this Fourth Amendment,
Borrower agrees to deliver to the Bank an Amended Extension Operating Note in
the form attached hereto as Exhibit “B” and incorporated herein by this
reference (the “Extension Operating Note”). 
Such Extension Operating Note shall be an extension of and amendment to
the Operating Note, dated April 30, 2008, and attached to the Agreement as
Exhibit “G,” and all references to the Operating Note in the Agreement, or
in any of the other Loan Documents, shall be deemed for all purposes to be a
reference to the Extension Operating Note attached hereto.

 

4.             Extension of
Maturity Dates of Existing Term Notes. 
The parties agree that the maturity dates of the Existing Term Notes
shall be extended as follows: (a) the maturity date of the Existing Swap
Note shall be extended to July 20, 2008, subject to and in accordance with
the amended definition of the Existing Swap Loan Termination Date stated in Section 2
above, (b) the maturity date of the Existing Variable Rate Note shall be
extended to July 20, 2008, subject to and in accordance with the terms of
the Agreement, and (c) the maturity date of the Existing Long Term
Revolving Note shall be extended to July 20, 2008, subject to and in
accordance with the terms of the Agreement. 
Upon the execution of this Fourth Amendment, Borrower agrees to deliver
to the Bank (x) an Extension Existing Swap Note in the form attached
hereto as Exhibit “C” and incorporated herein by this reference (the
“Extension Existing Swap Note”), (y) an Extension Existing Variable Rate
Note in the form attached hereto as Exhibit “D” and incorporated herein by
this reference (the “Extension Existing Variable Rate Note”), and (z) an
Extension Existing Long Term Revolving Note in the form attached hereto as Exhibit “E”
and incorporated herein by this reference (the “Extension Existing Long Term
Revolving Note”).  Such Extension
Existing Swap Note shall be an extension of and amendment to the Existing Swap
Note, dated June 23, 2003, and attached to the Initial Loan Agreement as Exhibit “J,”
and all references to the Existing Swap Note in the Agreement, or in any of the
other Loan Documents, shall be deemed for all purposes to be a reference to the
Extension Existing Swap Note attached hereto. 
Such Extension Existing Variable Rate Note shall be an extension of and
amendment to the Existing Variable Rate Note, dated June 23, 2003, and
attached to the Initial Loan Agreement as Exhibit “K,” and all references
to the Existing Variable Rate Note in the Agreement, or in any of the other
Loan Documents, shall be deemed for all purposes to be a reference to the
Extension Existing Variable Rate Note attached hereto.  Such Extension Existing Long Term Revolving
Note shall be an extension of and amendment to the Existing Long Term Revolving
Note, dated June 23, 2003, and attached to the Initial Loan Agreement as Exhibit “L,”
and all references to the Existing Long Term Revolving Note in the Agreement,
or in any of the other Loan Documents, shall be deemed for all purposes to be a
reference to the Extension Existing Long Term Revolving Note attached hereto.

 

5.             Amendment to Section 2.06.   The parties agree that Section 2.06 of
the Agreement shall be, and hereby is, deleted in its entirety and replaced
with the following:

 

“Section 2.06. Operating
Loan.  The Bank agrees, on the
terms and subject to the conditions set forth in this Agreement, to lend up to
Ten Million and No/100ths Dollars ($10,000,000.00) to the Borrower relating to
the Operating Loan, which shall 

 

3

 

provide both operating line of credit financing and Letter of Credit
financing under the same financing facility and will refinance and replace the
Existing Operating Note.  The Bank will
credit proceeds of the
Operating Loan to the Borrower’s deposit account with the Bank, bearing account
number 22674210.  Subject to the terms of
this Agreement and the Operating Note, the Bank will lend the Borrower, from
time to time until the Operating Loan Termination Date such sums as the
Borrower may request by reasonable same-day notice to the Bank, received by the
Bank not later than 11:00 a.m. (Omaha, Nebraska time) of such day, but
which shall not exceed the aggregate principal amount at any one time
outstanding of Ten Million and No/100ths Dollars ($10,000,000.00) less (i) the
aggregate amounts of any sums previously disbursed to the Borrower under the
Operating Loan by the Bank at the request of, and for the account of, the
Borrower and (ii) the aggregate amount of any outstanding Letters of
Credit (the “Operating Loan Commitment”). 
The Borrower may borrow, repay, and reborrow under the Operating Loan,
without penalty or premium, from the Closing Date until the Operating Loan
Termination Date, either the full amount of the Operating Loan Commitment or
any lesser sum.  It is the intention of
the parties that the outstanding balance of the Operating Loan shall not exceed
the Borrowing Base, and if at any time said balance exceeds the Borrowing Base,
the Borrower shall forthwith pay the Bank sufficient funds to reduce the
balance of the Operating Loan until it is in compliance with this
requirement.  The Borrower may elect to
terminate the Operating Note at any time upon written notice to the Bank.  In the event the Borrower elects to terminate
the Operating Note, the aggregate principal
amount of the Operating Note outstanding, together with any accrued and unpaid interest thereon, shall be
due and payable to the Bank on the date of such election, if not sooner paid.”

 

6.             Reaffirmation of Guaranty.  Upon the execution hereof, the Borrower shall
deliver to the Bank a Reaffirmation of Guaranty duly executed by the Guarantor
in the form attached hereto as Exhibit “F” and incorporated herein by this
reference.

 

7.             Ratification of
Loan Agreement; No Waiver.  The Borrower
and Bank agree that, except as expressly provided in this Fourth Amendment, all
terms and provisions of the Agreement, including, but not limited to, the
financial covenants set forth in the Agreement, and all other Loan Documents
shall remain unchanged and in full force and effect and are hereby ratified and
confirmed.  No amendment contained in
this Fourth Amendment shall be construed to amend or waive any obligation of
the Borrower under the Agreement or any provision of any of the Loan Documents,
except to the extent of the specific amendment referenced herein.  No delay or omission by the Bank in
exercising any power, right, or remedy shall impair such power, right, or
remedy or be construed as a waiver thereof or an acquiescence therein, and no
single or partial exercise of any such power, right, or remedy shall preclude
other or further exercise thereof or the exercise of any other power, right, or
remedy under the Agreement or any other Loan Documents, or otherwise.

 

8.             Authorization.  By execution hereof, the undersigned
representative of the Borrower hereby represents and warrants that (i) he
is an Authorized Person of the Borrower, (ii) the execution, delivery and
performance of this Fourth Amendment is, and has been, duly authorized,
approved and ratified by all required partnership or company action of the
Borrower and the General Partner, and (iii) the amendments specifically
referenced herein reflect all of the 

 

4

 

amendments being requested by the Borrower relating to the terms and
provisions of the Loan Agreement and the other Loan Documents.

 

9.             Governing
Law.  This Fourth Amendment shall be
governed by, and construed in accordance with, the laws of the State of
Nebraska, other than conflict of law provisions thereof.

 

10.           Submission
to Jurisdiction; Venue.  The Borrower
hereby submits to the jurisdiction of any state or federal court sitting in
Omaha, Nebraska, in any action or proceeding arising out of or relating to this
Fourth Amendment and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court.  The Borrower also agrees not to bring any
action or proceeding arising out of or relating to this Fourth Amendment, the
Agreement, or any of the other Loan Documents, in any other court.  The Borrower waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought
and waives any bond, surety, or other security that might be required of the
Bank.  The Borrower agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law or at
equity.  The Borrower hereby waives any rights
it or they may have to transfer or change the venue of any suit, action or
other proceeding brought against the Borrower by the Bank in accordance with
this paragraph or in connection with this Fourth Amendment, the Agreement or
any other Loan Documents.

 

11.           Costs
and Expenses.  The Borrower agrees to pay on demand
all costs and expenses of the Bank in connection with the preparation,
execution and delivery of this Fourth Amendment, including, without
limitation, the cost for any title insurance endorsements or additional
premiums and the reasonable fees and out-of-pocket expenses of outside counsel
for the Bank with respect thereto.

 

12.           Jury
Trial Waiver. THE BANK AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS FOURTH AMENDMENT,
THE AGREEMENT OR ANY OF THE LOAN DOCUMENTS. 
NO EMPLOYEE OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THE
TERMS AND PROVISIONS OF THIS PARAGRAPH OF THIS FOURTH AMENDMENT.

 

13.           CREDIT
AGREEMENT.  A CREDIT AGREEMENT MUST
BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW.  TO PROTECT YOU AND US FROM ANY
MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT, PROMISE, UNDERTAKING, OR
OFFER TO FORBEAR REPAYMENT OF MONEY OR TO MAKE ANY OTHER FINANCIAL
ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF
CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR SUBSTITUTION FOR
ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR DOCUMENT EXECUTED IN
CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF CREDIT, MUST BE IN
WRITING TO BE EFFECTIVE.

 

5

 

14.           Counterparts.  This Fourth Amendment may be executed in one
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same instrument.  A facsimile
signature (or signatures sent by electronic mail in .pdf format) will be deemed
an original signature.

 

IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment as of the Effective Date.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “Bank”

  
	
   

  	
   

  
	
   

  	
  FIRST NATIONAL BANK OF OMAHA,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  
	
   

  	
  By:

  	
    
  /s/ Bradley J. Brummund

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
						

 

6

 

FOURTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“A”

 

FORM OF
FIRST AMENDMENT TO AMENDED, RESTATED AND EXPANDED MORTGAGE

 

[SEE THE ATTACHED]

 

7

 

Prepared By:  Todd W. Weidemann,
Esq, ISBA #14517, Woods & Aitken, LLP, 10250 Regency Circle, Suite 525,
Omaha, Nebraska 68114, (402) 898-7400.

 

FIRST AMENDMENT

TO AMENDED, RESTATED AND EXPANDED MORTGAGE

 

THIS FIRST AMENDMENT TO AMENDED, RESTATED AND EXPANDED MORTGAGE (this
“First Amendment”) is executed as of the 1st day of June 2008, by LSCP,
LLLP, an Iowa limited liability limited partnership (“LSCP, LLLP”), successor
in interest to LSCP, L.P., an Iowa limited partnership (“LSCP, L.P.”) (LSCP,
LLLP and LSCP, L.P. are referred to jointly herein as the “Borrower”) whose
mailing address is 4808 F. Avenue, Marcus, Iowa 51035, Attention: Steve Roe, to
and for the benefit of FIRST NATIONAL BANK OF OMAHA, a national banking association, its successors and assigns
(“Bank”), whose mailing address is 1620 Dodge Street, STOP 1050, Omaha,
Nebraska 68197-1050, Attn: Bradley J. Brummund.

 

RECITALS

 

WHEREAS, Borrower executed that certain Amended, Restated &
Expanded Mortgage dated April 5, 2007, for the benefit of the Bank which
was filed for record on April 6, 2007 as Document No. 2007 0583 in
the Cherokee County, Iowa records (the “Amended & Restated Mortgage”),
which (i) amended and restated the terms and provisions of that certain
Mortgage, dated July 25, 2002, made by the Borrower in favor of the Bank,
filed with the Cherokee County Recorder on July 26, 2002, as Instrument
Number 02-1598 as amended by that certain Amendment to Mortgage by and between
Bank and Borrower dated December 2, 2004, and filed with the Cherokee
County Recorder on March 4, 2005 at Book 2005, Page 0448, and (ii) encumbered
the real property described on Exhibit “A” attached hereto and
incorporated herein by this reference; and

 

WHEREAS, the Borrower and the Bank have entered into an Amended and
Restated Construction Loan Agreement dated April 5, 2007 (the “Initial
Loan Agreement”), which was subsequently amended by (i) the First
Amendment to Amended and Restated Construction Loan Agreement dated as of January 31,
2008 (the “First Amendment”), (ii) the Second Amendment to Amended and
Restated Construction Loan Agreement dated as of March 31, 2008 (the
“Second Amendment”), and (iii) the Third Amendment to Amended and Restated
Construction 

 

1

 

Loan Agreement dated as of April 30, 2008 (the “Third Amendment”)
(the Initial Loan Agreement as amended by the First Amendment, the Second
Amendment, and the Third Amendment are herein collectively referred to as the
“Loan Agreement”); and

 

WHEREAS, the Borrower and the Bank entered into that certain Fourth
Amendment to Amended and Restated Construction Loan Agreement as of the date
hereof (the “Fourth Amendment to Loan Agreement”) for the purpose of amending
the Loan Agreement to extend the Operating Loan Termination Date and to increase
the amount of the operating line of credit financing and Letter of Credit
financing represented by the Operating Note from Five Million and No/100ths
Dollars ($5,000,000.00) to Ten Million and No/100ths Dollars ($10,000,000.00)
(the “Operating Loan Increase”); and

 

WHEREAS, the Borrower and the Bank desire by this First Amendment to
cause the Amended & Restated Mortgage to be amended to reflect the
Operating Loan Increase.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, intending to be legally bound, the
parties agree as follows:

 

1.             DEFINITIONS.  Any capitalized term used in this First
Amendment (including its preamble and recitals) and not otherwise defined
herein shall have the meaning, if any, ascribed to it in Amended &
Restated Mortgage.

 

2.             Amendment to Section 3(f).  In order to acknowledge and confirm that the
Operating Loan Increase is an “Obligation” secured by the Mortgage, the parties
agree that Section 3(f) of the Amended & Restated Mortgage
shall be, and hereby is, deleted in its entirety and replaced with the
following:

 

“(f)          The payment of the indebtedness evidenced by the Extension
Operating Note (as defined in the Fourth Amendment to Amended and Restated
Construction Loan Agreement dated as of June 1, 2008 by and between
Borrower and Bank) in the principal amount of Ten Million and No/100ths Dollars
($10,000,000.00) and payable to the order of Bank, which amended, restated and
extended that certain Operating Note dated March 31, 2008 executed by
Borrower for the benefit of the Bank (as amended, the “Operating Note”),
including all subsequent advances pursuant to the Operating Note’s revolving
credit arrangement and the issuance of Letters of Credit, and together with
Interest (as defined therein) and fees and charges relating to the issuance of
Letters of Credit, and pursuant to the terms and conditions set forth therein
or in the Loan Agreement, which by this reference are incorporated herein,
together with any and all modifications, extensions and renewals thereof;”

 

Any and all references to the “Operating Note” in the Mortgage shall
for all purposes be deemed to refer to the Operating Note described above.

 

3.             Agreement
Remains in Effect.  Except as
expressly provided herein or in the Fourth Amendment to Loan Agreement, all
terms and provisions of the Amended & Restated 

 

2

 

Mortgage shall remain unchanged and in full force and effect and are
hereby ratified and confirmed.  No
amendment contained in this First Amendment shall be construed to amend or
waive any obligation of the Borrower under the Amended & Restated
Mortgage or any provision of any of the other Loan Documents, except to the
extent of the specific amendment referenced herein.  No delay or omission by the Bank in
exercising any power, right, or remedy shall impair such power, right, or
remedy or be construed as a waiver thereof or an acquiescence therein, and no
single or partial exercise of any such power, right, or remedy shall preclude
other or further exercise thereof or the exercise of any other power, right, or
remedy under the Amended & Restated Mortgage or any other Loan
Documents, or otherwise.

 

4.             Successors and
Assigns.  This First Amendment is
binding upon and shall inure to the benefit of Borrower and Bank and their
respective successors and interests and permitted assigns.

 

5.             Headings.  The headings, captions and arrangements used
in this First Amendment are for convenience only and shall not affect the
interpretation of this First Amendment.

 

6.             Counterparts.  This First Amendment may be executed in one
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same instrument.  A facsimile
signature (or signatures sent by electronic mail in .pdf format) will be deemed
an original signature.

 

IN WITNESS
WHEREOF, Borrower has executed this First Amendment as of the date and year
first above written.

 

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  
					

 

3

 

	
   

  	
  “Bank”

  
	
   

  	
   

  
	
   

  	
  FIRST NATIONAL BANK OF OMAHA,

  
	
   

  	
  a national banking association

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Bradley J. Brummund

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
  STATE OF

  	
  Iowa

  	
  )

  	
   

  
	
   

  	
  ) ss.

  	
   

  
	
  COUNTY OF

  	
  Cherokee

  	
  )

  	
   

  
								

 

On this 1st day of June, 2008, before me,
the undersigned, a Notary Public in and for the State of Iowa, personally
appeared Stephen Roe, to me personally known, who being by me duly sworn
did say that the person is the General Manager of Little Sioux Corn Processors, L.L.C., an Iowa
limited liability company, the General Partner of LSCP, LLLP, an Iowa limited
liability limited partnership, executing the forgoing instrument, that the
instrument was signed on behalf of said limited liability company as General
Partner of LSCP, LLLP, an Iowa limited liability limited partnership, by
authority of the limited liability company’s Managers; and that Stephen Roe as General
Manager acknowledged the execution of the instrument to be the voluntary act
and deed of the limited liability company and limited liability limited
partnership by it and by the officer voluntarily executed.

 

 

	 
	
   

  	
  /s/ Sonia Jones

  	 

	 
	
   

  	
  Notary Public

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STATE OF

  	
  Nebraska

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ) ss.

  	
   

  	
   

  	
   

  
	
  COUNTY OF

  	
  Douglas

  	
  )

  	
   

  	
   

  	
   

  
											

 

On this 1st day
of June, 2008, before me, the undersigned, a Notary Public in and for the State
of Nebraska, personally appeared Bradley J. Brummund, to me personally known,
who being by me duly sworn did say that the person is a Vice President of First
National Bank of Omaha, a national banking association, executing the forgoing
instrument, that the instrument was signed on behalf of said national banking
association; and that Bradley J. Brummund as Vice President acknowledged the
execution of the instrument to be the voluntary act and deed of the national
banking association and by the officer voluntarily executed.

 

 

	
   

  	
  /s/ Kiley Drog

  
	
   

  	
  Notary Public

  

 

4

 

EXHIBIT
“A”

 

Legal
Description of the Property

 

Legal Description of Tract 1

 

A tract of land in the fractional North Half of the Northeast One
Quarter of Section 2, Township 92 North, Range 42 West of the 5th P.M.,
Cherokee County, Iowa, more particularly described as follows:

 

Beginning at the North Quarter Corner of Section 2, thence S
00°28’10” W (bearing assumed with all subsequent bearings referenced there
from) along the West line of Northeast Quarter of Section 2 for a distance
of 408.78 feet measured (409.15 feet record) to the Northerly right of way line
of the Chicago, Central & Pacific Railroad Company; thence S 77°32’41”
E along the Northerly right of way line of said Chicago, Central and Pacific
Railroad Company for a distance of 2,640.86 feet to the West right of way line
of F Avenue; thence N 00°24’06” E along said West right of way line for a
distance of 702.05 feet; thence N 89°35’54” W for a distance of 230.00 feet;
thence N 00°24’06” E for a distance of 245.00 feet to the South right of way
line of 480th Street; thence S 89°23’02” W along said South right of
way line for a distance of 248.92 feet; thence N 00°40’34” W for a distance
55.00 feet to the North line of the fractional Northeast Quarter of Section 2;
thence S 89°23’02” W along the said North line of the Northeast Quarter of Section 2
for a distance of 2,102.57 feet to the point of beginning.

 

Said tract contains 40.03 acres more or less, with 1.59 acres for
roadway easements.

 

Legal Description of Tract 2

 

A tract of land in the fractional North half of the Northeast One
Quarter of Section 2, Township 92 North, Range 42 West of the 5th P.M.
Cherokee County, Iowa, more particularly described as follows:

 

Commencing at the Southeast corner of the fractional Northeast Quarter
of the Northeast Quarter of Section 2; thence S 89°48’24” W (bearing
assumed with all subsequent bearings referenced there from) along the South
line of North Half of the Northeast Quarter of Section 2 for a distance of
55.00 feet to the point of beginning; thence continuing S 89°48’24” W along the
South line of the North half of the Northeast Quarter for a distance of
2,598.96 feet to the Southwest corner of fractional Northwest Quarter of the
Northeast Quarter of Section 2; thence N 00°28’10” E along the West line
of the fractional Northwest Quarter of the Northeast Quarter of Section 2
for a distance of 899.57 feet to the Southerly right of way line of the
Chicago, Central and Pacific Railroad Company; thence S 77°32’41” E along the
said right of way line of the Chicago, Central and Pacific Railroad Company for
a distance of 2,656.32 feet to the West right of way line of F Avenue; thence S
00°24’06” W along said West right of way line of F Avenue for a distance of
317.87 feet to the point of beginning.

 

Said tract contains 36.31 acres more or less.

 

5

 

Legal Description of Tract 3

 

A tract of land in the Northeast Quarter of
the Northwest Quarter (NE 1⁄4 NW 1⁄4) and the Northwest Quarter of the Northwest
Quarter (NW 1⁄4 NW 1⁄4) of Section 2, Township 92 North, Range 42 West of the
5th P.M., Cherokee County, Iowa, more particularly described as
follows:  Beginning at the Northeast Corner
of the NW 1⁄4 of said Section 2; thence South 89°19’10” West (bearing
assumed with all subsequent bearings referenced therefrom) along the North line
of said NW1⁄4 of Section 2 for a distance of 1,759.48 feet; thence South
77°32’41” East along the Northerly right of way line of the Chicago, Central &
Pacific Railroad for a distance of 1,798.33 feet; thence North 00°28’10” East,
along the East line of said NW1⁄4  of Section 2
for a distance of 408.78 feet to the Point of Beginning.

 

Said tract contains 8.25 acres more or less, with 1.47 acres for
easements.

 

6

 

FOURTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“B”

 

FORM OF
OPERATING NOTE

 

[SEE THE ATTACHED]

 

 

OPERATING NOTE

 

	
  $10,000,000.00

  	
   

  	
  June 1, 2008

  
	
   

  	
   

  	
  Omaha, Nebraska

  

 

FOR VALUE
RECEIVED, the undersigned, LSCP, LLLP, an Iowa limited liability limited
partnership  (the “Borrower”), HEREBY PROMISES
TO PAY to the order of FIRST NATIONAL BANK OF OMAHA, a national banking association
(the “Bank”), at its principal office located at 1620 Dodge Street, STOP 1050,
Omaha, Nebraska 68197, in lawful money of the United States and in immediately
available funds, the principal amount of Ten Million and No/100ths Dollars
($10,000,000.00) or, so much thereof as may be advanced by the Bank pursuant to
the terms and provisions of the Loan Agreement, as hereinafter defined, between
the Borrower and the Bank (the “Principal Amount”).

 

The Borrower
further agrees to pay (i) the Principal Amount and (ii) interest on
the unpaid Principal Amount from the date hereof at the rates and times
specified in the Loan Agreement, without off-set, deduction or counterclaim,
until paid in full.  The unpaid Principal
Amount hereof, together with all accrued and unpaid interest hereunder, shall
be due and payable in accordance with the terms and provisions of the Loan
Agreement, but in any event not later than March 31, 2009.

 

This Operating
Note (this “Operating Note”) is an extension of the Operating Note dated April 30,
2008 and attached as Exhibit “G” to that certain Amended and Restated
Construction Loan Agreement, dated April 5, 2007, by and between the
Borrower and the Bank (the “Initial Loan Agreement”), as amended by that
certain First Amendment to Amended and Restated Construction Loan Agreement
dated as of January 31, 2008 (the “First Amendment”), as further amended
by that certain Second Amendment to the Amended and Restated Construction Loan
Agreement dated as of March 31, 2008 (the “Second Amendment”), as further
amended by that certain Third Amendment to the Amended and Restated
Construction Loan Agreement dated as of April 30, 2008 (the “Third
Amendment”) and as further amended by that certain Fourth Amendment to the
Amended and Restated Construction Loan Agreement dated as of June 1, 2008
(the “Fourth Amendment”) (each as amended, supplemented, or otherwise modified
from time to time, the Initial Loan Agreement, the First Amendment, the Second
Amendment, the Third Amendment, and the Fourth Amendment are herein referred to
collectively as the “Loan Agreement”), the terms and conditions of which are
incorporated herein by this reference. 
All references to the Operating Note in the Loan Agreement or in any of
the other Loan Documents, shall be deemed for all purposes to be a reference to
this Operating Note. This Operating Note is entitled to the benefits and
security set forth in the Loan Documents, including, but not limited to, the
Security Agreement, the Mortgage, the Assignment of Rents and Leases and the
Guaranty.  In the event of a conflict or
inconsistency between the terms of this Operating Note and the Loan Agreement,
the terms and provisions of the Loan Agreement shall govern.  Capitalized terms not otherwise defined in
this Operating Note which are defined in the Loan Agreement shall have the
meanings ascribed thereto in the Loan Agreement.

 

The Loan
Agreement, among other things, contains (i) enumerated Events of Default, (ii) provisions
for acceleration of the maturity of this Operating Note upon the happening of
certain stated events, (iii) provisions for prepayments of the Principal
Amount of this Operating Note 

 

1

 

prior to the maturity of the
Operating Note, and (iv) provisions for modification or waiver of this
Operating Note upon the terms and conditions specified in the Loan Agreement.

 

The occurrence
of any Event of Default enumerated in the Loan Agreement or any of the other
Loan Documents shall constitute an Event of Default under this Operating
Note.  Upon any such Event of Default,
the Bank shall have any and all remedies provided in the Loan Agreement or any
of the other Loan Documents, including but not limited to the right, but not
the obligation, to accelerate the due date of this Operating Note and declare
all obligations set forth herein immediately due and payable, and such other
remedies as are provided by law.  No
failure to exercise, and no delay in exercising, any rights hereunder on the
part of the Bank shall operate as a waiver of such rights.

 

Borrower
acknowledges that the obligations evidenced by this Operating Note are for
business purposes only and are not an extension of consumer or individual
credit.

 

THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY GOVERNING LAW,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, NOTICE OF DISHONOR, PROTEST,
NOTICE OF PROTEST, DEMAND, NOTICE OF EVERY KIND IN CONNECTION HEREWITH AND
DILIGENCE IN ENFORCING PAYMENT OR BRINGING SUIT AGAINST ANY PARTY HERETO.

 

This Operating
Note is made under and governed by the laws of, and shall be deemed to have
been executed in, the State of Nebraska without giving effect to choice of law
principles
(whether of the State of Nebraska or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Nebraska.

 

THE BANK AND
THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS OPERATING NOTE. 
NO OFFICER OR EMPLOYEE OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR
MODIFY THIS PROVISION.

 

Time is of the
essence as to each and every date and each and every obligation of the Borrower
set forth in this Operating Note.

 

[SIGNATURE
PAGE FOLLOWS]

 

2

 

IN WITNESS
WHEREOF, the Borrower has caused this Operating Note to be executed and
delivered to the Bank as of the day and year first written above.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  
						

 

3

 

FOURTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“C”

 

FORM OF
EXTENSION EXISTING SWAP NOTE

 

[SEE THE ATTACHED]

 

 

AMENDED AND EXTENDED TERM NOTE 2

 

	
  Note Date:

  	
  June 1, 2008

  	
  $9,058,774.46

  
	
  Maturity Date:

  	
  July 20, 2008

  	
   

  

 

FOR VALUE RECEIVED, LSCP, LLLP,
an Iowa limited liability limited partnership (“LSCP, LLLP”), successor in
interest to LSCP, L.P., an Iowa limited partnership
(“LSCP, L.P.”), with its principal offices in Marcus, Iowa (LSCP, LLLP and
LSCP, L.P. are referred to collectively as the “BORROWER”) promises to pay to
the order of First National Bank of Omaha (“BANK”),  at its principal office or such other address
as BANK or holder may designate from time to time, the principal sum of  Nine Million Fifty-Eight Thousand Seven
Hundred Seventy-Four and 46/100ths Dollars ($9,058,774.46), or the amount shown
on the BANK’s records to be outstanding, plus interest (calculated on the basis
of actual days elapsed in a 360-day year) accruing each day on the unpaid
principal balance at the annual interest rates defined below.  Absent manifest error, the BANK’s records
shall be conclusive evidence of the principal and accrued interest owing
hereunder.

 

This promissory note is executed pursuant to a Construction Loan
Agreement (“CONSTRUCTION LOAN AGREEMENT”) between BORROWER and BANK dated as of
July 25, 2002, which together with all amendments thereto, is collectively
called the “AGREEMENT.”  All capitalized
terms not otherwise defined in this note shall have the meanings provided in
the AGREEMENT.

 

INTEREST ACCRUAL.  Interest on the
principal amount outstanding shall accrue based on a three month LIBOR +280
bps.  Interest shall be calculated on the
basis of a 360-day year, counting the actual number of days elapsed.

 

REPAYMENT TERMS.  Interest on the outstanding principal balance
shall be due and payable quarterly, in arrears, with the first payment
commencing on June 1, 2008.  In all
events, the entire outstanding principal balance, together with all accrued and
unpaid interest, shall be immediately due and payable in full on July 20,
2008.

 

PREPAYMENT. 
The BORROWER may prepay this promissory note in
full or in part at any time.  Provided,
however, a condition of any prepayment is that a fee shall be paid to BANK
sufficient to make BANK whole for any expenses related to breaking fixed
interest rates.  Each prepayment may be
applied in inverse order of maturity or as the BANK in its sole discretion may
deem appropriate.  Such prepayment shall
not excuse the BORROWER from making subsequent payments each quarter until the
indebtedness is paid in full.  No payment
of EXCESS CASH FLOW shall be the cause of a payment to BANK for interest rate
breakage fees or otherwise result in any prepayment fee.

 

ADDITIONAL TERMS AND CONDITIONS. The
AGREEMENT, and any amendments or substitutions, contains additional terms and
conditions, including default and acceleration provisions, which are incorporated
into this promissory note by reference. 
The BORROWER agrees to pay all costs of collection, including reasonable
attorney’s 

 

1

 

fees and legal expenses incurred by the BANK if this promissory note is
not paid as provided above.  This
promissory note shall be governed by the substantive laws of the State of
Nebraska.

 

WAIVER OF PRESENTMENT AND NOTICE OF
DISHONOR.  BORROWER
and any other person who signs, guarantees or endorses this promissory note, to
the extent allowed by law, hereby waives presentment, demand or payment, notice
of dishonor, protest, and any notice relating to the acceleration of the
maturity of this promissory note.

 

	
   

  	
  LSCP, LLLP, an Iowa Limited Partnership

  
	
   

  	
  By Little Sioux Corn Processors, L.L.C. Its

  
	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
                                         ,
  President of

  Little Sioux Corn Processors, L.L.C.

  

 

 

	
  STATE OF IOWA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF IOWA

  	
  )

  

 

On this 1st day of June, 2008, before me, the undersigned, a
Notary Public, personally appeared Stephen Roe, President of Little Sioux Corn
Processors, L.L.C., General Partner of LSCP, LLLP, on behalf of said entity,
who executed the foregoing instrument, and acknowledged that he executed the
same as his voluntary act and deed.

 

 

	
   

  	
  /s/ Sonia Jones

  	
   

  
	
   

  	
  Notary Public

  	
   

  
				

 

2

 

FOURTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“D”

 

FORM OF
EXTENSION EXISTING VARIABLE RATE NOTE

 

[SEE THE ATTACHED]

 

 

AMENDED AND EXTENDED TERM NOTE 3(variable
rate)

 

	
  Note Date:

  	
  June 1, 2008

  	
  $2,554,559.56

  
	
  Maturity Date:

  	
  July 20, 2008

  	
   

  

 

FOR VALUE RECEIVED, LSCP, LLLP, an Iowa
limited liability limited partnership (“LSCP, LLLP”), successor in interest to LSCP, L.P., an Iowa limited partnership (“LSCP, L.P.”), with
its principal offices in Marcus, Iowa (LSCP, LLLP and LSCP, L.P. are referred
to collectively as the “BORROWER”) promises to pay to the order of First
National Back of Omaha (“BANK”), at its principal office or such other address
as BANK or holder may designate from time to time, the principal sum of  Two Million Five Hundred Fifty-Four Thousand
Five Hundred Fifty-Nine and 56/100 Dollars ($2,554,559.56), or the amount shown
on the BANK’s records to be outstanding, plus interest (calculated on the basis
of actual days elapsed in a 360-day year) accruing each day on the unpaid
principal balance at the annual interest rates defined below.  Absent manifest error, the BANK’s records
shall be conclusive evidence of the principal and accrued interest owing
hereunder.

 

This promissory note is executed pursuant to a Construction Loan
Agreement (“CONSTRUCTION LOAN AGREEMENT”) between BORROWER and BANK dated as of
July 25, 2002, which, together will all amendments thereto, is
collectively called the “AGREEMENT.”  All
capitalized terms not otherwise defined in this note shall have the meanings
provided in the AGREEMENT.

 

INTEREST ACCRUAL.  Interest
on the principal amount outstanding shall accrue based on a three month LIBOR
+280 bps.  Interest shall be calculated
on the basis of a 360-day year, counting the actual number of days elapsed.

 

REPAYMENT TERMS.  Interest and
Principal shall be due and payable in the amounts described in the AGREEMENT,
which will be applied to this Note and an additional Note, in the manner
described in the AGREEMENT.  Any
remaining principal balance, plus any accrued but unpaid interest, shall be
fully due and payable on July 20, 2008, if not sooner paid.

 

PREPAYMENT. 
The BORROWER may prepay this promissory note in
full or in part at any time.  Provided,
however, a condition of any prepayment is that a fee shall be paid to BANK
sufficient to make BANK whole for any expenses related to breaking fixed
interest rates.  Each prepayment may be
applied in inverse order of maturity or as the BANK in its sold discretion may
deem appropriate.  Such prepayment shall
not excuse the BORROWER from making subsequent payments each quarter until the
indebtedness is paid in full.  No payment
of EXCESS CASH FLOW shall be the cause of a payment to BANK for interest rate
breakage fees or otherwise result in any prepayment fee.

 

ADDITIONAL TERMS AND CONDITIONS.  The AGREEMENT, and
any amendments or substitutions, contains additional terms and conditions,
including default and acceleration provisions, which are incorporated into this
promissory note by reference. The BORROWER agrees to pay all costs of
collection, including reasonable attorneys fees and legal expenses incurred by
the BANK if this promissory note is not paid as provided above.  This promissory note shall be governed by the
substantive laws of the State of Nebraska.

 

1

 

WAIVER OF PRESENTMENT AND NOTICE OF
DISHONOR.  BORROWER
and any other person who signs, guarantees or endorses this promissory note, to
the extent allowed by law, hereby waives presentment, demand for payment,
notice of dishonor, protest, and any notice relating to the acceleration of the
maturity of this promissory note.

 

 

	
   

  	
  LSCP, LLLP, an Iowa Limited Partnership

  
	
   

  	
  By Little Sioux Corn Processors, L.L.C. Its

  
	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
                                         ,
  President of Little Sioux Corn

  Processors, L.L.C.

  

 

 

	
  STATE OF IOWA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF IOWA

  	
  )

  

 

On this 1st day of June, 2008, before me, the undersigned, a
Notary Public, personally appeared Stephen Roe, President of Little Sioux Corn
Processors, L.L.C., General Partner of LSCP, LLLP, on behalf of said entity,
who executed the foregoing instrument, and acknowledged that he executed the
same as his voluntary act and deed.

 

 

	
   

  	
  /s/ Sonia Jones

  	
   

  
	
   

  	
  Notary Public

  	
   

  
				

 

2

 

FOURTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“E”

 

FORM OF
EXTENSION EXISTING LONG TERM REVOLVING NOTE

 

[SEE THE ATTACHED]

 

 

AMENDED AND EXTENDED TERM NOTE 4 (with
reducing revolver feature)

 

	
  Note Date:

  	
  June 1, 2008

  	
  $5,000,000.00

  
	
  Maturity Date:

  	
  July 20, 2008

  	
   

  

 

FOR VALUE RECEIVED, LSCP, LLLP, an Iowa
limited liability limited partnership (“LSCP, LLLP”), successor in interest to LSCP, L.P., an Iowa limited partnership (“LSCP, L.P.”), with
its principal offices in Marcus, Iowa (LSCP, LLLP and LSCP, L.P. are referred
to collectively as the “BORROWER”) promises to pay to the order of First
National Back of Omaha (“BANK”), at its principal office or such other address
as BANK or holder may designate from time to time, the principal sum of  Five Million and No/100 Dollars
($5,000,000.00), or the amount shown on the BANK’s records to be outstanding,
plus interest (calculated on the basis of actual days elapsed in a 360-day
year) accruing each day on the unpaid principal balance at the annual interest
rates defined below.  Absent manifest
error, the BANK’s records shall be conclusive evidence of the principal and
accrued interest owing hereunder.

 

This promissory note is executed pursuant to a Construction Loan
Agreement (“CONSTRUCTION LOAN AGREEMENT”) between BORROWER and BANK dated as of
July 25, 2002, which, together will all amendments thereto, is
collectively called the “AGREEMENT.”  All
capitalized terms not otherwise defined in this note shall have the meanings
provided in the AGREEMENT.

 

INTEREST ACCRUAL.  Interest
on the principal amount outstanding shall accrue based on a one month LIBOR
+280 bps.  Interest shall be calculated
on the basis of a 360-day year, counting the actual number of days elapsed.

 

REVOLVING FEATURE.  The BORROWER may reborrow, on a revolving
basis, that principal amount repaid on this promissory note which remains at a
variable interest rate.  Pursuant to this
revolving loan feature the BANK will lend the BORROWER, from time to time until
maturity of this note such sums in integral multiples of $10,000.00 as the
BORROWER may request by reasonable same day notice to the BANK not later than
11:00 A.M. on Friday, or the next BUSINESS DAY thereafter, each week but
which shall not exceed in the aggregate principal amount at any one time
outstanding, $5,000,000.00.  The BORROWER
may borrow, repay and reborrow hereunder, from the date of this AGREEMENT until
the maturity of this note, said amount or any lesser sum which is $10,000.00 or
an integral multiple thereof.  Following
repayment of AMENDED AND EXTENDED TERM NOTE 3, when regular quarterly principal
payments are applied to this note, the amount available to be borrowed under
the revolving loan feature will be correspondingly reduced, so that the maximum
amount outstanding under this promissory note will decrease accordingly.

 

REPAYMENT TERMS.  Interest and
Principal shall be due and payable in the amounts described in the AGREEMENT,
which will be applied to this Note and an additional Note, in the manner
described in the AGREEMENT.  Any
remaining principal balance, plus any accrued but unpaid interest, shall be
fully due and payable on July 20, 2008, if not sooner paid.

 

1

 

PREPAYMENT. 
The BORROWER may prepay this promissory note in
full or in part at any time.  Provided,
however, a condition of any prepayment is that a fee shall be paid to BANK
sufficient to make BANK whole for any expenses related to breaking fixed
interest rates.  Each prepayment may be
applied in inverse order of maturity or as the BANK in its sold discretion may
deem appropriate.  Such prepayment shall
not excuse the BORROWER from making subsequent payments each quarter until the
indebtedness is paid in full.  No payment
of EXCESS CASH FLOW shall be the cause of a payment to BANK for interest rate
breakage fees or otherwise result in any prepayment fee.

 

ADDITIONAL TERMS AND CONDITIONS.  The AGREEMENT, and
any amendments or substitutions, contains additional terms and conditions,
including default and acceleration provisions, which are incorporated into this
promissory note by reference. The BORROWER agrees to pay all costs of
collection, including reasonable attorneys fees and legal expenses incurred by
the BANK if this promissory note is not paid as provided above.  This promissory note shall be governed by the
substantive laws of the State of Nebraska.

 

WAIVER OF PRESENTMENT AND NOTICE OF
DISHONOR.  BORROWER
and any other person who signs, guarantees or endorses this promissory note, to
the extent allowed by law, hereby waives presentment, demand for payment,
notice of dishonor, protest, and any notice relating to the acceleration of the
maturity of this promissory note.

 

 

	
   

  	
  LSCP, LLLP, an Iowa Limited Partnership

  
	
   

  	
  By Little Sioux Corn Processors, L.L.C. Its

  
	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
                                         ,
  President of Little Sioux Corn

  Processors, L.L.C.

  

 

	
  STATE OF IOWA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF IOWA

  	
  )

  

 

On this 1st day of June, 2008, before me, the undersigned, a
Notary Public, personally appeared Stephen Roe, President of Little Sioux Corn
Processors, L.L.C., General Partner of LSCP, LLLP, on behalf of said entity,
who executed the foregoing instrument, and acknowledged that he executed the
same as his voluntary act and deed.

 

 

	
   

  	
  /s/ Sonia Jones

  	
   

  
	
   

  	
  Notary Public

  	
   

  
				

 

2

 

FOURTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“F”

 

REAFFIRMATION OF GUARANTY

 

[SEE THE ATTACHED]

 

 

REAFFIRMATION OF GUARANTY

 

                This will
confirm (a) that the undersigned hereby consents (i) to the terms of
that Fourth Amendment to the Amended and Restated Construction Loan Agreement
(the “Fourth Amendment”) of even date herewith by and between the Borrower and
the Bank and (ii) to the execution and delivery of the Fourth Amendment by
the Borrower; (b) that the Obligations of the Borrower to the Bank under
the Loan Agreement (as defined in the Fourth Amendment) as amended by the
Fourth Amendment constitutes an obligation of the Guarantor to the Bank under
the terms and conditions of the Guaranty; and (c) that all references to
the “Loan Agreement” contained in the Guaranty shall constitute references to
the Loan Agreement as amended by the Fourth Amendment, and as the same may be
amended, restated or otherwise modified from time to time hereafter.  The undersigned confirms to the Bank that all
of the terms, conditions, provisions, agreements, requirements, promises,
obligations, duties, covenants, and representations of the undersigned under
the Guaranty, and any and all other documents and agreements entered into with
respect to the obligations under the Guaranty, are incorporated herein by this
reference as modified hereby and as so modified, are hereby ratified and
affirmed in all respects by the undersigned.

 

Dated as of June 1, 2008.

 

 

	
   

  	
  “Guarantor”

  
	
   

  	
   

  
	
   

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
  an Iowa limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Stephen G.
  Roe

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  
					

 

4

 

FIFTH AMENDMENT TO THE

AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT

 

This Fifth Amendment to the
Amended and Restated Construction Loan Agreement (the “Fifth Amendment”) is
made and entered into effective as of the 20th day of July 2008
(“Effective Date”), by and between LSCP, LLLP, an
Iowa limited liability limited partnership (“LSCP, LLLP”), successor in
interest to LSCP, L.P., an Iowa limited partnership (“LSCP, L.P.”), with its
principal offices in Marcus, Iowa (LSCP, LLLP and LSCP, L.P. are referred to
collectively as the “Borrower”), and FIRST NATIONAL BANK OF
OMAHA, a national banking association with principal offices in
Omaha, Nebraska (the “Bank”).

 

WHEREAS, the Bank and
Borrower have entered into that certain Amended and Restated Construction Loan
Agreement dated as of April 5, 2007 (the “Initial Loan Agreement”), as
amended by (i) that certain First Amendment to Amended & Restated
Construction Loan Agreement dated as of January 31, 2008 (the “First
Amendment”), (ii) that certain Second Amendment to Amended and Restated
Construction Loan Agreement dated as of March 31, 2008 (the “Second
Amendment”), (iii) that certain Third Amendment to Amended and Restated
Construction Loan Agreement dated as of April 30, 2008 (the “Third
Amendment”), and (iv) that certain Fourth Amendment to Amended and
Restated Construction Loan Agreement dated as of June 1, 2008 (the “Fourth
Amendment”) (the Initial Loan Agreement as amended by the First Amendment, the
Second Amendment, the Third Amendment, and the Fourth Amendment are herein
collectively referred to as the “Loan Agreement”); and

 

WHEREAS,
the entire proceeds of the Construction Loan were not drawn upon prior to the
Construction Loan Termination Date in accordance with the terms and provisions
of the Loan Agreement; and

 

WHEREAS,
the Bank acknowledges that, notwithstanding Substantial Completion of the
Expansion Facility by the original Completion Date, the Borrowers requested,
and the Bank is willing to grant (in accordance with the terms and provisions
of this Fifth Amendment), an extension of the Completion Date in order to
facilitate the completion of construction of certain ancillary portions of the
Expansion Facility; and

 

WHEREAS,
the Borrower desires to modify and amend the Loan Agreement and the Obligations
of the Borrower pursuant to the Loan Documents, as hereinafter provided; and

 

WHEREAS,
the Bank has agreed, on its own behalf and with the required consent of the
participants, to make such amendments, subject to the terms and conditions set
forth in this Fifth Amendment.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual promises, covenants
and agreements set forth in the Loan Agreement and the mutual covenants and
agreements contained herein, the Borrower and Bank mutually agree as follows:

 

 

1.             Definitions.  Unless otherwise defined in this Fifth
Amendment, each capitalized term used in this Fifth Amendment, including its
preamble and recitals, has the meaning ascribed to it in the Loan Agreement.

 

2.             Amendments to Definitions.  The following defined terms as reflected in Section 1.01
of the Agreement shall be, and hereby are, deleted in their entirety and
replaced by the definition reflected below for each such defined term:

 

““Agreement” shall have the meaning given
such term in the preamble hereto, and shall include all schedules and exhibits
thereto, in each case as amended, supplemented, or modified by the terms and
provisions of (i) the First Amendment to Amended and Restated Construction
Loan Agreement dated as of January 31, 2008, by and between Borrower and
the Bank, (ii) the Second Amendment to Amended and Restated Construction
Loan Agreement dated as of March 31, 2008, by and between the Borrower and
the Bank, (iii) the Third Amendment to Amended and Restated Construction
Loan Agreement dated as of April 30, 2008, by and between the Borrower and
the Bank, (iv) the Fourth Amendment to Amended and Restated Construction
Loan Agreement dated as of June 1, 2008, by and between the Borrower and
the Bank, and (v) the Fifth Amendment to Amended and Restated Construction
Loan Agreement dated as of July 20, 2008, by and between Borrower and the
Bank, and as may be further amended, supplemented, or modified from time to
time in accordance with the terms of this Agreement.

 

“Amended Existing Swap Note” means that
certain Amended and Restated Existing Swap Note executed by Borrower for the
benefit of the Bank dated as of July 20, 2008.

 

“Completion Date” means the earlier to
occur of (i) October 20, 2008 or (ii) the date the construction
of the Project is completed.

 

“Existing Swap Loan Termination Date”
means the earlier to occur of (a) July 20, 2013, or (b) the date
the Obligations are accelerated pursuant to this Agreement or the Notes or (c) the
date the Bank has received (i) notice in writing from the Borrower of the
Borrower’s election to terminate this Agreement or (ii) indefeasible
payment in full of the Obligations.”

 

3.                                       Existing Swap
Note.

 

a.               Existing
Swap Note Termination Date.  The parties agree that the maturity date of
the Existing Swap Note shall be extended to July 20, 2013, subject to and
in accordance with the amended definition of the Existing Swap Loan Termination
Date stated in Section 2 above. 
Upon the execution of this Fifth Amendment, Borrower agrees to deliver
to the Bank an Amended and Restated Existing Swap Note in the form attached
hereto as Exhibit “A” and incorporated herein by this reference (“Amended
Existing Swap Note”), and all references to the Existing Swap Note in the
Agreement, or in any of the 

 

 

other Loan Documents, shall be deemed for all purposes to be a
reference to the Amended Existing Swap Note attached hereto.

 

b.              Section 2.01(b).  The parties agree that Section 2.01(b) of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:

 

“(b)         During the period beginning on the date
of execution of this Agreement and ending on July 20, 2008, the terms and
provisions of the Existing Swap Note shall remain in full force and effect and
the interest rate, interest period, repayment and other terms and provisions
thereof shall likewise remain in full force and effect.  Thereafter, the terms and provisions of the
Amended Existing Swap Note shall govern.”

 

4.             Termination of Construction Loan
Commitment.  Upon the date hereof,
$61,381,558.42 of the principal amount of the Construction Loan has been
funded.  The parties agree that on the
date hereof, the remaining $11,618,441.58 of the Construction Loan (the
“Unadvanced Construction Loan Amount”) shall be (i) advanced by the Bank
and placed in a deposit account in the name of the Borrower and maintained with
the Bank, the balance of which shall be frozen except for permitted
disbursements described in this Section 4, (ii) held as additional
Collateral for the benefit of the Bank pursuant to and subject to the terms and
provisions of the Security Agreement, and (iii) disbursed only in
accordance with the terms and provisions of the Disbursement Agreement as if
the same were “Advances” of the Construction Loan as described therein.  As of the date hereof, the parties agree that
the Construction Loan Commitment is terminated and the Construction Loan shall
be converted and replaced, in accordance with the Loan Agreement, as follows:

 

a.             Swap Loan.  $36,500,000.00 of the Construction Loan shall
be converted into the Swap Loan evidenced by the Swap Note; and

 

b.             Variable Rate Loan.  $19,881,558.42 of the Construction Loan plus
the Unadvanced Construction Loan Amount plus the outstanding principal balance
of the Existing Variable Rate Note in the amount of $2,554,559.56, shall all be
converted to and replaced by the Variable Rate Note with a principal amount of
$34,054,559.56; and

 

c.             Long Term Revolving Loan.  $5,000,000.00 of the Construction Loan shall
be converted into the Long Term Revolving Loan and represented by the Long Term
Revolving Note.

 

Upon
the execution hereof, the Borrower agrees to execute and deliver to the Bank
the Swap Note, the Variable Rate Note, and the Long Term Revolving Note, in the
forms attached hereto as Exhibits “B”, “C”, and “D”, respectively, and
incorporated herein by this reference.

 

5.             Reaffirmation of Guaranty.  Upon the execution hereof, the Borrower shall
deliver to the Bank a Reaffirmation of Guaranty duly executed by the Guarantor
in the form attached hereto as Exhibit “E” and incorporated herein by this
reference.

 

 

6.             Ratification of Loan Agreement;
No Waiver.  The Borrower and Bank
agree that, except as expressly provided in this Fifth Amendment, all terms and
provisions of the Agreement, including, but not limited to, the financial
covenants set forth in the Agreement, and all other Loan Documents shall remain
unchanged and in full force and effect and are hereby ratified and
confirmed.  No amendment contained in this
Fifth Amendment shall be construed to amend or waive any obligation of the
Borrower under the Agreement or any provision of any of the Loan Documents,
except to the extent of the specific amendment referenced herein.  No delay or omission by the Bank in exercising
any power, right, or remedy shall impair such power, right, or remedy or be
construed as a waiver thereof or an acquiescence therein, and no single or
partial exercise of any such power, right, or remedy shall preclude other or
further exercise thereof or the exercise of any other power, right, or remedy
under the Agreement or any other Loan Documents, or otherwise.

 

7.             Authorization.  By execution hereof, the undersigned
representative of the Borrower hereby represents and warrants that (i) he
is an Authorized Person of the Borrower, (ii) the execution, delivery and
performance of this Fifth Amendment is, and has been, duly authorized, approved
and ratified by all required partnership or company action of the Borrower and
the General Partner, and (iii) the amendments specifically referenced
herein reflect all of the amendments being requested by the Borrower relating
to the terms and provisions of the Loan Agreement and the other Loan Documents.

 

8.             Governing Law.  This Fifth Amendment shall be governed by,
and construed in accordance with, the laws of the State of Nebraska, other than
conflict of law provisions thereof.

 

9.             Submission to
Jurisdiction; Venue.  The Borrower
hereby submits to the jurisdiction of any state or federal court sitting in
Omaha, Nebraska, in any action or proceeding arising out of or relating to this
Fifth Amendment and agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court.  The Borrower also agrees not to bring any
action or proceeding arising out of or relating to this Fifth Amendment, the
Agreement, or any of the other Loan Documents, in any other court.  The Borrower waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought
and waives any bond, surety, or other security that might be required of the
Bank.  The Borrower agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law or at
equity.  The Borrower hereby waives any
rights it or they may have to transfer or change the venue of any suit, action
or other proceeding brought against the Borrower by the Bank in accordance with
this paragraph or in connection with this Fifth Amendment, the Agreement or any
other Loan Documents.

 

10.           Costs
and Expenses.  The Borrower agrees to pay on demand
all costs and expenses of the Bank in connection with the preparation,
execution and delivery of this Fifth Amendment, including, without
limitation, the cost for any title insurance endorsements or additional
premiums and the reasonable fees and out-of-pocket expenses of outside counsel
for the Bank with respect thereto.

 

 

11.           Jury Trial Waiver.
THE BANK AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING,
CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY,
ARISING OUT OF OR IN ANY WAY RELATED TO THIS FIFTH AMENDMENT, THE AGREEMENT OR
ANY OF THE LOAN DOCUMENTS.  NO EMPLOYEE
OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THE TERMS AND
PROVISIONS OF THIS PARAGRAPH OF THIS FIFTH AMENDMENT.

 

12.           CREDIT AGREEMENT.  A CREDIT AGREEMENT MUST BE IN WRITING TO BE
ENFORCEABLE UNDER NEBRASKA LAW.  TO
PROTECT YOU AND US FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT,
PROMISE, UNDERTAKING, OR OFFER TO FORBEAR REPAYMENT OF MONEY OR TO MAKE ANY
OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR
EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR
SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR
DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION
OF CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.

 

13.           Counterparts.  This Fifth Amendment may be executed in one
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same instrument.  A facsimile
signature (or signatures sent by electronic mail in .pdf format) will be deemed
an original signature.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Fifth Amendment as of
the Effective Date.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP,
  LLLP,

  
	
   

  	
  an
  Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little
  Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  

 

 

	
   

  	
  “Bank”

  
	
   

  	
   

  
	
   

  	
  FIRST
  NATIONAL BANK OF OMAHA,

  
	
   

  	
  a
  national banking association

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bradley J. Brummund

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
						

 

 

FIFTH AMENDMENT TO THE

 

AMENDED AND RESTATED
CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT “A”

 

Amended Existing Swap Note

 

 [SEE
THE ATTACHED]

 

 

AMENDED
AND RESTATED

 

EXISTING
SWAP NOTE

 

	
  $9,058,774.46

  	
   

  	
  July, 20, 2008

  
	
   

  	
   

  	
  Omaha, Nebraska

  

 

FOR VALUE RECEIVED, the
undersigned, LSCP, LLLP, an Iowa limited liability limited partnership  (the “Borrower”), HEREBY PROMISES TO PAY to the order of
FIRST NATIONAL BANK OF OMAHA, a national banking association (the “Bank”), at
its principal office located at 1620 Dodge Street, STOP 1050, Omaha, Nebraska
68197, in lawful money of the United States and in immediately available funds,
the principal amount of Nine Million Fifty Eight Thousand Seven Hundred Seventy
Four and 46/100ths Dollars ($9,058,774.46) 
(the “Principal Amount”).

 

The Borrower also promises to pay (i) on the
first (1st) day of every third month, commencing on September 1,
2008, the scheduled payment of Principal Amount reflected on Schedule I to this
Amended & Restated Existing Swap Note and any and all interest accrued
on the unpaid Principal Amount at a variable rate equal to the [three (3) month
LIBOR Rate, in effect from time to time, plus (a) two hundred eighty (280)
basis points prior to acceleration or maturity], and (b) an additional six
hundred (600) basis points after maturity, whether by acceleration or
otherwise, without off-set, deduction or counterclaim, until paid in full (the
interest rate herein is subject to the Maximum Rate determination in Section 8.16
of the Loan Agreement) and (ii) fees at such times and at such rates and
amounts specified in the Loan Agreement, without off-set, deduction or
counterclaim, until paid in full.  The
unpaid Principal Amount hereof, together with all accrued and unpaid interest
and fees, shall be due and payable on the date that is the earliest to occur of
the following: (i) July 20, 2013, (ii) the date the Obligations
are accelerated pursuant to the Loan Agreement or this Amended and Restated
Existing Swap Note and (iii) the date the Bank has received indefeasible
payment in full of the Obligations.  The
Borrower also agrees to pay, at the time of any prepayment of this Amended and
Restated Existing Swap Note, any amounts as may be provided in the Loan
Agreement or in the Swap Contracts as compensation to the Bank for prepayment
of the Amended and Restated Existing Swap Note, including, but not limited to,
any fees or costs incurred by the Bank as a result of the termination or
breakage of any Swap Contracts to which the Borrower is a party in relation to
the Existing Swap Loan.

 

This Amended and Restated Existing
Swap Note is an amendment and extension of that certain Existing Swap Note
dated June 1, 2008, referred to in the Amended and Restated Construction
Loan Agreement, dated April 5, 2007, by and between the Borrower and the
Bank (the “Initial Loan Agreement”), as amended by that certain First Amendment
to Amended and Restated Construction Loan Agreement dated as of January 31,
2008 (the “First Amendment”), as further amended by that certain Second
Amendment to the Amended and Restated Construction Loan Agreement dated as of March 31,
2008 (the “Second Amendment”), as further amended by that certain Third
Amendment to the Amended and Restated Construction Loan Agreement dated as of April 30,
2008 (the “Third Amendment”), as further amended by that certain Fourth
Amendment to the Amended and Restated Construction Loan Agreement dated as of June 1,
2008 (the “Fourth Amendment”), as further amended by that certain Fifth
Amendment to the Amended and Restated Construction Loan Agreement dated as of July 20,

 

 

2008 (the “Fifth Amendment”) (each as
amended, supplemented, or otherwise modified from time to time, the Initial
Loan Agreement, the First Amendment, the Second Amendment, the Third Amendment,
the Fourth Amendment, and the Fifth Amendment are herein referred to
collectively as the “Loan Agreement”), the terms and conditions of which are
incorporated herein by this reference. 
This Amended and Restated Existing Swap Note is entitled to the benefits
and security set forth in the Loan Documents, including, but not limited to,
the Security Agreement, the Mortgage, the Assignment of Rents and Leases and
the Guaranty.  In the event of a conflict
or inconsistency between the terms of this Amended and Restated Existing Swap
Note and the Loan Agreement, the terms and provisions of the Loan Agreement
shall govern.  Capitalized terms not
otherwise defined in this Amended and Restated Existing Swap Note which are
defined in the Loan Agreement shall have the meanings ascribed thereto in the
Loan Agreement.

 

This Amended and Restated
Existing Swap Note is given in modification, replacement and restatement of,
but not extinguishment of, the unpaid indebtedness evidenced by the Existing
Swap Note.  This Amended and Restated
Existing Swap Note modifies and replaces, but does not repay said Existing Swap
Note, and all indebtedness formerly evidenced by the Existing Swap Note and
unpaid on the date hereof shall now be evidenced by this Amended and Restated
Existing Swap Note, and as of the date hereof, the Existing Swap Note shall no
longer evidence said outstanding indebtedness. 
This Amended and Restated Existing Swap Note shall not be considered to
be a novation of the Existing Swap Note as this Amended and Restated Existing
Swap Note evidences the same indebtedness and is secured by the same
collateral.

 

The Loan Agreement, among
other things, contains (i) enumerated Events of Default, (ii) provisions
for acceleration of the maturity of this Amended and Restated Existing Swap
Note upon the happening of certain stated events, (iii) provisions for
prepayments of the principal amount of this Amended and Restated Existing Swap
Note prior to the maturity of the Amended and Restated Existing Swap Note and
the prepayment fees and restrictions related thereto, and (iv) provisions
for modification or waiver of this Amended and Restated Existing Swap Note upon
the terms and conditions specified in the Loan Agreement.

 

The occurrence of any Event
of Default enumerated in the Loan Agreement or any of the other Loan Documents
shall constitute an Event of Default under this Amended and Restated Existing
Swap Note.  Upon any such Event of
Default, the Bank shall have any and all remedies provided in the Loan
Agreement or any of the other Loan Documents, including but not limited to the
right, but not the obligation, to accelerate the due date of this Amended and
Restated Existing Swap Note and declare all obligations set forth herein
immediately due and payable, and such other remedies as are provided by
law.  No failure to exercise, and no delay
in exercising, any rights hereunder on the part of the Bank shall operate as a
waiver of such rights.

 

The Borrower acknowledges
that the Obligations evidenced by this Amended and Restated Existing Swap Note
are for business purposes only and are not an extension of consumer or
individual credit.

 

THE BORROWER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY GOVERNING LAW,
PRESENTMENT FOR PAYMENT, 

 

 

NOTICE OF NONPAYMENT, NOTICE OF DISHONOR,
PROTEST, NOTICE OF PROTEST, DEMAND, NOTICE OF EVERY KIND IN CONNECTION HEREWITH
AND DILIGENCE IN ENFORCING PAYMENT OR BRINGING SUIT AGAINST ANY PARTY HERETO.

 

This Amended and Restated Existing Swap Note is made
under and governed by the laws of, and shall be deemed to have been executed
in, the State of Nebraska without giving effect to choice of law principles (whether of
the State of Nebraska or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Nebraska.

 

THE BANK AND THE BORROWER HEREBY WAIVE TRIAL BY JURY
IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT,
AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AMENDED AND
RESTATED EXISTING SWAP NOTE.  NO OFFICER
OR EMPLOYEE OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS
PROVISION.

 

Time is of the essence as to
each and every date and each and every Obligation of the Borrower set forth in
this Amended and Restated Existing Swap Note.

 

IN WITNESS WHEREOF, the Borrower has caused this Amended and Restated
Existing Swap Note to be executed and delivered to the Bank as of the day and
year first written above.

 

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP,
  LLLP,

  
	
   

  	
  an
  Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little
  Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  

 

 

SCHEDULE I

 

Principal Payments

 

[See the Attached]

 

 

Schedule I to Amended and Restated Existing Swap Note

 

AMORTIZATION SCHEDULE – Normal Amortization, 360 Day Year

 

	
  #

  	
   

  	
  Date

  	
   

  	
  Principal

  	
   

  
	
  1

  	
   

  	
   

  	
  9/1/2008

  	
   

  	
  452,938.72

  	
   

  
	
  2

  	
   

  	
   

  	
  12/1/2008

  	
   

  	
  452,938.72

  	
   

  
	
  2008 Totals

  	
   

  	
   

  	
   

  	
   

  	
  905,877.44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
  3/1/2009

  	
   

  	
  452,938.72

  	
   

  
	
  4

  	
   

  	
   

  	
  6/1/2009

  	
   

  	
  452,938.72

  	
   

  
	
  5

  	
   

  	
   

  	
  9/1/2009

  	
   

  	
  452,938.72

  	
   

  
	
  6

  	
   

  	
   

  	
  12/1/2009

  	
   

  	
  452,938.72

  	
   

  
	
  2009 Totals

  	
   

  	
   

  	
   

  	
   

  	
  1,811,784.88

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
  3/1/2010

  	
   

  	
  452,938.72

  	
   

  
	
  8

  	
   

  	
   

  	
  6/1/2010

  	
   

  	
  452,938.72

  	
   

  
	
  9

  	
   

  	
   

  	
  9/1/2010

  	
   

  	
  452,938.72

  	
   

  
	
  10

  	
   

  	
   

  	
  12/1/2010

  	
   

  	
  452,938.72

  	
   

  
	
  2010 Totals

  	
   

  	
   

  	
   

  	
   

  	
  1,811,754.88

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
   

  	
  3/1/2011

  	
   

  	
  452,938.72

  	
   

  
	
  12

  	
   

  	
   

  	
  6/1/2011

  	
   

  	
  452,938.72

  	
   

  
	
  13

  	
   

  	
   

  	
  9/1/2011

  	
   

  	
  452,938.72

  	
   

  
	
  14

  	
   

  	
   

  	
  12/1/2011

  	
   

  	
  452,938.72

  	
   

  
	
  2011 Totals

  	
   

  	
   

  	
   

  	
   

  	
  1,811,754.88

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
   

  	
  3/1/2012

  	
   

  	
  452,938.72

  	
   

  
	
  16

  	
   

  	
   

  	
  6/1/2012

  	
   

  	
  452,938.72

  	
   

  
	
  17

  	
   

  	
   

  	
  9/1/2012

  	
   

  	
  452,938.72

  	
   

  
	
  18

  	
   

  	
   

  	
  12/1/2012

  	
   

  	
  452,938.72

  	
   

  
	
  2012 Totals

  	
   

  	
   

  	
   

  	
   

  	
  1,811,754.88

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
   

  	
   

  	
  3/1/2013

  	
   

  	
  452,938.72

  	
   

  
	
  20

  	
   

  	
   

  	
  6/1/2013

  	
   

  	
  452,938.72

  	
   

  
	
  21

  	
   

  	
   

  	
  7/20/2013

  	
   

  	
  Entire
  remaining balance due

  	
   

  
	
  2013 Totals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

FIFTH AMENDMENT TO THE

 

AMENDED AND RESTATED
CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT “B”

 

Swap Note

 

[SEE THE ATTACHED]

 

 

SWAP NOTE

 

	
  $36,500,000.00

  	
   

  	
  July 20, 2008

  
	
   

  	
   

  	
  Omaha, Nebraska

  

 

FOR VALUE
RECEIVED, the undersigned, LSCP, LLLP, an Iowa limited liability limited
partnership  (the “Borrower”), HEREBY PROMISES
TO PAY to the order of FIRST NATIONAL BANK OF OMAHA, a national banking
association (the “Bank”), at its principal office located at 1620 Dodge Street,
STOP 1050, Omaha, Nebraska 68197, in lawful money of the United States and in
immediately available funds, the principal amount of Thirty Six Million Five
Hundred Thousand and No/100ths Dollars ($36,500,000.00) (the “Principal
Amount”).

 

The Borrower
also promises to pay (i) the Principal Amount, without off-set, deduction
or counterclaim, until paid in full, (ii) interest on the unpaid Principal
Amount from the date hereof at the rates and times specified in the Loan
Agreement, without off-set, deduction or counterclaim, until paid in full and (iii) fees
at such times and at such rates and amounts specified in the Loan Agreement,
without off-set, deduction or counterclaim, until paid in full.  The unpaid Principal Amount hereof, together
with all accrued and unpaid interest and fees, shall be due and payable on the
date that is the earliest to occur of the following: (i) July 20,
2013, (ii) the date the Obligations are accelerated pursuant to the Loan
Agreement or this Swap Note and (iii) the date the Bank has received
indefeasible payment in full of the Obligations.

 

This Swap Note
is the Swap Note referred to in the Amended and Restated Construction Loan
Agreement, dated April 5, 2007, by and between the Borrower and the Bank
(the “Initial Loan Agreement”), as amended by that certain First Amendment to
Amended and Restated Construction Loan Agreement dated as of January 31,
2008 (the “First Amendment”), as further amended by that certain Second
Amendment to the Amended and Restated Construction Loan Agreement dated as of March 31,
2008 (the “Second Amendment”), as further amended by that certain Third
Amendment to the Amended and Restated Construction Loan Agreement dated as of April 30,
2008 (the “Third Amendment”), as further amended by that certain Fourth
Amendment to the Amended and Restated Construction Loan Agreement dated as of June 1,
2008 (the “Fourth Amendment”), as further amended by that certain Fifth
Amendment to the Amended and Restated Construction Loan Agreement dated as of July 20,
2008 (the “Fifth Amendment”) (each as amended, supplemented, or otherwise
modified from time to time, the Initial Loan Agreement, the First Amendment,
the Second Amendment, the Third Amendment, the Fourth Amendment, and the Fifth
Amendment are herein referred to collectively as the “Loan Agreement”), the
terms and conditions of which are incorporated herein by this reference.  This Swap Note is entitled to the benefits
and security set forth in the Loan Documents, including, but not limited to,
the Security Agreement, the Mortgage, the Assignment of Rents and Leases and
the Guaranty.  In the event of a conflict
or inconsistency between the terms of this Swap Note and the Loan Agreement,
the terms and provisions of the Loan Agreement shall govern.  Capitalized terms not otherwise defined in
this Swap Note which are defined in the Loan Agreement shall have the meanings
ascribed thereto in the Loan Agreement.

 

The Loan
Agreement, among other things, contains (i) enumerated Events of Default, (ii) provisions
for acceleration of the maturity of this Swap Note upon the happening of
certain stated events, (iii) provisions for prepayments of the principal
amount of this Swap Note prior to 

 

 

the maturity of the Swap Note
and the prepayment fees and restrictions related thereto, and (iv) provisions
for modification or waiver of this Swap Note upon the terms and conditions
specified in the Loan Agreement.

 

The occurrence
of any Event of Default enumerated in the Loan Agreement or any of the other
Loan Documents shall constitute an Event of Default under this Swap Note.  Upon any such Event of Default, the Bank
shall have any and all remedies provided in the Loan Agreement or any of the
other Loan Documents, including but not limited to the right, but not the
obligation, to accelerate the due date of this Swap Note and declare all
obligations set forth herein immediately due and payable, and such other
remedies as are provided by law.  No
failure to exercise, and no delay in exercising, any rights hereunder on the
part of the Bank shall operate as a waiver of such rights.

 

The Borrower
acknowledges that the Obligations evidenced by this Swap Note are for business
purposes only and are not an extension of consumer or individual credit.

 

THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY GOVERNING LAW,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, NOTICE OF DISHONOR, PROTEST,
NOTICE OF PROTEST, DEMAND, NOTICE OF EVERY KIND IN CONNECTION HEREWITH AND
DILIGENCE IN ENFORCING PAYMENT OR BRINGING SUIT AGAINST ANY PARTY HERETO.

 

This Swap Note
is made under and governed by the laws of, and shall be deemed to have been
executed in, the State of Nebraska without giving effect to choice of law
principles
(whether of the State of Nebraska or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Nebraska.

 

THE BANK AND
THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS SWAP NOTE. 
NO OFFICER OR EMPLOYEE OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR
MODIFY THIS PROVISION.

 

Time is of the
essence as to each and every date and each and every Obligation of the Borrower
set forth in this Swap Note.

 

[REMAINDER OF
PAGE INTENTIONALLY BLANK; SIGNATURE PAGE TO FOLLOW]

 

 

IN WITNESS WHEREOF, the Borrower has caused
this Swap Note to be executed and delivered to the Bank as of the day and year
first written above.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
         /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
               President

  

 

 

Schedule I to Swap Note

 

AMORTIZATION SCHEDULE – Normal Amortization,
360 Day Year

 

	
  #

  	
   

  	
  Date

  	
   

  	
  Principal

  	
   

  
	
  1

  	
   

  	
  9/1/2008

  	
   

  	
  612,194.15

  	
   

  
	
  2

  	
   

  	
  12/1/2008

  	
   

  	
  616,441.62

  	
   

  
	
  2008 Totals

  	
   

  	
   

  	
   

  	
  1,228,635.77

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  3/1/2009

  	
   

  	
  621,046.22

  	
   

  
	
  4

  	
   

  	
  6/1/2009

  	
   

  	
  633,679.68

  	
   

  
	
  5

  	
   

  	
  9/1/2009

  	
   

  	
  654,091.59

  	
   

  
	
  6

  	
   

  	
  12/1/2009

  	
   

  	
  667,252.64

  	
   

  
	
  2009 Totals

  	
   

  	
   

  	
   

  	
  2,576,070.13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  3/1/2010

  	
   

  	
  673,449.21

  	
   

  
	
  8

  	
   

  	
  6/1/2010

  	
   

  	
  687,148.67

  	
   

  
	
  9

  	
   

  	
  9/1/2010

  	
   

  	
  714,983.70

  	
   

  
	
  10

  	
   

  	
  12/1/2010

  	
   

  	
  722,441.51

  	
   

  
	
  2010 Totals

  	
   

  	
   

  	
   

  	
  2,798,023.09

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  3/1/2011

  	
   

  	
  730,367.22

  	
   

  
	
  12

  	
   

  	
  6/1/2011

  	
   

  	
  745,224.51

  	
   

  
	
  13

  	
   

  	
  9/1/2011

  	
   

  	
  772,952.73

  	
   

  
	
  14

  	
   

  	
  12/1/2011

  	
   

  	
  782,221.05

  	
   

  
	
  2011 Totals

  	
   

  	
   

  	
   

  	
  3,030,765.51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  3/1/2012

  	
   

  	
  792,019.72

  	
   

  
	
  16

  	
   

  	
  6/1/2012

  	
   

  	
  808,131.17

  	
   

  
	
  17

  	
   

  	
  9/1/2012

  	
   

  	
  835,743.69

  	
   

  
	
  18

  	
   

  	
  12/1/2012

  	
   

  	
  846,973.11

  	
   

  
	
  2012 Totals

  	
   

  	
   

  	
   

  	
  3,282,867.69

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
   

  	
  3/1/2013

  	
   

  	
  858,800.55

  	
   

  
	
  20

  	
   

  	
  6/1/2013

  	
   

  	
  876,191.82

  	
   

  
	
  21

  	
   

  	
  7/20/2013

  	
   

  	
  21,848,645.44

  	
   

  
	
  2013 Totals

  	
   

  	
   

  	
   

  	
  23,583,637.81

  	
   

  

 

 

FIFTH AMENDMENT TO THE

 

AMENDED AND RESTATED
CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“C”

 

Variable Rate Note

 

 [SEE THE ATTACHED]

 

 

VARIABLE RATE NOTE

 

	
  $34,054,559.56

  	
   

  	
  July 20, 2008

  
	
   

  	
   

  	
  Omaha, Nebraska

  

 

FOR VALUE
RECEIVED, the undersigned, LSCP, LLLP, an Iowa limited liability limited
partnership  (the “Borrower”), HEREBY PROMISES
TO PAY to the order of FIRST NATIONAL BANK OF OMAHA, a national banking
association (the “Bank”), at its principal office located at 1620 Dodge Street,
STOP 1050, Omaha, Nebraska 68197, in lawful money of the United States and in
immediately available funds, the principal amount of Thirty Four Million Fifty
Four Thousand Five Hundred Fifty Nine and 56/100ths Dollars ($34,054,559.56)
or, so much thereof as may be advanced by the Bank pursuant to the terms and
provisions of the Loan Agreement, as hereinafter defined, between the Borrower
and the Bank (the “Principal Amount”).

 

The Borrower
also promises to pay (i) the Principal Amount, without off-set, deduction
or counterclaim, until paid in full, (ii) interest on the unpaid Principal
Amount from the date hereof at the rates and times specified in the Loan
Agreement, without off-set, deduction or counterclaim, until paid in full and (iii) fees
at such times and at such rates and amounts specified in the Loan Agreement, without
off-set, deduction or counterclaim, until paid in full.  The unpaid Principal Amount hereof, together
with all accrued and unpaid interest and fees, shall be due and payable on the
date that is the earliest to occur of the following: (i) July 20, 2013,
(ii) the date the Obligations are accelerated pursuant to the Loan
Agreement or this Variable Rate Note and (iii) the date the Bank has
received indefeasible payment in full of the Obligations.

 

This Variable
Rate Note is the Variable Rate Note referred to in the Amended and Restated
Construction Loan Agreement, dated April 5, 2007, by and between the
Borrower and the Bank (the “Initial Loan Agreement”), as amended by that
certain First Amendment to Amended and Restated Construction Loan Agreement
dated as of January 31, 2008 (the “First Amendment”), as further amended
by that certain Second Amendment to the Amended and Restated Construction Loan
Agreement dated as of March 31, 2008 (the “Second Amendment”), as further
amended by that certain Third Amendment to the Amended and Restated
Construction Loan Agreement dated as of April 30, 2008 (the “Third
Amendment”), as further amended by that certain Fourth Amendment to the Amended
and Restated Construction Loan Agreement dated as of June 1, 2008 (the
“Fourth Amendment”), as further amended by that certain Fifth Amendment to the
Amended and Restated Construction Loan Agreement dated as of July 20, 2008
(the “Fifth Amendment”) (each as amended, supplemented, or otherwise modified
from time to time, the Initial Loan Agreement, the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment
are herein referred to collectively as the “Loan Agreement”), the terms and
conditions of which are incorporated herein by this reference.  This Variable Rate Note is entitled to the
benefits and security set forth in the Loan Documents, including, but not
limited to, the Security Agreement, the Mortgage, the Assignment of Rents and
Leases and the Guaranty.  In the event of
a conflict or inconsistency between the terms of this Variable Rate Note and
the Loan Agreement, the terms and provisions of the Loan Agreement shall
govern.  Capitalized terms not otherwise
defined in this Variable Rate Note which are defined in the Loan Agreement
shall have the meanings ascribed thereto in the Loan Agreement.

 

 

The Loan
Agreement, among other things, contains (i) enumerated Events of Default, (ii) provisions
for acceleration of the maturity of this Variable Rate Note upon the happening
of certain stated events, (iii) provisions for prepayments of the
principal amount of this Variable Rate Note prior to the maturity of the
Variable Rate Note and the prepayment fees and restrictions related thereto,
and (iv) provisions for modification or waiver of this Variable Rate Note
upon the terms and conditions specified in the Loan Agreement.

 

The occurrence
of any Event of Default enumerated in the Loan Agreement or any of the other
Loan Documents shall constitute an Event of Default under this Variable Rate
Note.  Upon any such Event of Default,
the Bank shall have any and all remedies provided in the Loan Agreement or any
of the other Loan Documents, including but not limited to the right, but not
the obligation, to accelerate the due date of this Variable Rate Note and
declare all obligations set forth herein immediately due and payable, and such
other remedies as are provided by law. 
No failure to exercise, and no delay in exercising, any rights hereunder
on the part of the Bank shall operate as a waiver of such rights.

 

The Borrower
acknowledges that the Obligations evidenced by this Variable Rate Note are for
business purposes only and are not an extension of consumer or individual
credit.

 

THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY GOVERNING LAW,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, NOTICE OF DISHONOR, PROTEST,
NOTICE OF PROTEST, DEMAND, NOTICE OF EVERY KIND IN CONNECTION HEREWITH AND
DILIGENCE IN ENFORCING PAYMENT OR BRINGING SUIT AGAINST ANY PARTY HERETO.

 

                This Variable Rate Note is made under and
governed by the laws of, and shall be deemed to have been executed in, the
State of Nebraska without giving effect to choice of law principles (whether of the State of Nebraska or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Nebraska.

 

                THE BANK AND THE BORROWER HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT
OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS
VARIABLE RATE NOTE.  NO OFFICER OR
EMPLOYEE OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS
PROVISION.

 

Time is of the
essence as to each and every date and each and every Obligation of the Borrower
set forth in this Variable Rate Note.

 

[REMAINDER OF
PAGE INTENTIONALLY BLANK; SIGNATURE PAGE TO FOLLOW]

 

 

IN WITNESS WHEREOF, the Borrower has caused
this Variable Rate Note to be executed and delivered to the Bank as of the day
and year first written above.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
         /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
               President

  

 

 

FIFTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“D”

 

Long Term Revolving Note

 

[SEE THE ATTACHED]

 

 

LONG TERM REVOLVING NOTE

 

	
  $10,000,000.00

  	
   

  	
  July 20, 2008

  
	
   

  	
   

  	
  Omaha, Nebraska

  

 

FOR VALUE
RECEIVED, the undersigned, LSCP, LLLP, an Iowa limited liability limited
partnership  (the “Borrower”), HEREBY PROMISES
TO PAY to the order of FIRST NATIONAL BANK OF OMAHA, a national banking
association (the “Bank”), at its principal office located at 1620 Dodge Street,
STOP 1050, Omaha, Nebraska 68197, in lawful money of the United States and in
immediately available funds, the principal amount of Ten Million and No/100ths
Dollars ($10,000,000.00) or, so much thereof as may be advanced by the Bank
pursuant to the terms and provisions of the Loan Agreement, as hereinafter
defined, between the Borrower and the Bank (the “Principal Amount”).

 

The Borrower further agrees to pay (i) the
Principal Amount, without off-set, deduction or counterclaim, until paid in
full, (ii) interest on the unpaid Principal Amount from the date hereof at
the rates and times specified in the Loan Agreement, without off-set, deduction
or counterclaim, until paid in full, and (iii) fees at such times and at
such rates and amounts specified in the Loan Agreement, without off-set,
deduction or counterclaim, until paid in full. 
The unpaid Principal Amount hereof, together with all accrued and unpaid
interest hereunder, shall be due and payable on the date that is the earliest
to occur of the following: (i) July 20, 2013, (ii) the date the
Obligations are accelerated pursuant to the Loan Agreement or this Long Term
Revolving Note and (iii) the date the Bank has received indefeasible
payment in full of the Obligations.

 

This Long Term
Revolving Note is the Long Term Revolving Note referred to in the Amended and
Restated Construction Loan Agreement, dated April 5, 2007, by and between
the Borrower and the Bank (the “Initial Loan Agreement”), as amended by that
certain First Amendment to Amended and Restated Construction Loan Agreement
dated as of January 31, 2008 (the “First Amendment”), as further amended
by that certain Second Amendment to the Amended and Restated Construction Loan
Agreement dated as of March 31, 2008 (the “Second Amendment”), as further
amended by that certain Third Amendment to the Amended and Restated
Construction Loan Agreement dated as of April 30, 2008 (the “Third
Amendment”), as further amended by that certain Fourth Amendment to the Amended
and Restated Construction Loan Agreement dated as of June 1, 2008 (the
“Fourth Amendment”), as further amended by that certain Fifth Amendment to the
Amended and Restated Construction Loan Agreement dated as of July 20, 2008
(the “Fifth Amendment”) (each as amended, supplemented, or otherwise modified
from time to time, the Initial Loan Agreement, the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment
are herein referred to collectively as the “Loan Agreement”), the terms and
conditions of which are incorporated herein by this reference.  This Long Term Revolving Note is entitled to
the benefits and security set forth in the Loan Documents, including, but not
limited to, the Security Agreement, the Mortgage, the Assignment of Rents and
Leases and the Guaranty.  In the event of
a conflict or inconsistency between the terms of this Long Term Revolving Note
and the Loan Agreement, the terms and provisions of the Loan Agreement shall
govern.  Capitalized terms not otherwise
defined in this Long Term Revolving Note which are defined in the Loan Agreement
shall have the meanings ascribed thereto in the Loan Agreement.

 

 

The Loan
Agreement, among other things, contains (i) enumerated Events of Default, (ii) provisions
for acceleration of the maturity of this Long Term Revolving Note upon the
happening of certain stated events, (iii) provisions for prepayments of
the principal amount of this Long Term Revolving Note prior to the maturity of
this Long Term Revolving Note, and (iv) provisions for modification or
waiver of this Long Term Revolving Note upon the terms and conditions specified
in the Loan Agreement.

 

The occurrence
of any Event of Default enumerated in the Loan Agreement or any of the other
Loan Documents shall constitute an Event of Default under this Long Term
Revolving Note.  Upon any such Event of
Default, the Bank shall have any and all remedies provided in the Loan
Agreement or any of the other Loan Documents, including but not limited to the
right, but not the obligation, to accelerate the due date of this Long Term
Revolving Note and declare all obligations set forth herein immediately due and
payable, and such other remedies as are provided by law.  No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the Bank shall operate as a
waiver of such rights.

 

The Borrower
acknowledges that the Obligations evidenced by this Long Term Revolving Note
are for business purposes only and are not an extension of consumer or
individual credit.

 

THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY GOVERNING LAW,
PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, NOTICE OF DISHONOR, PROTEST,
NOTICE OF PROTEST, DEMAND, NOTICE OF EVERY KIND IN CONNECTION HEREWITH AND
DILIGENCE IN ENFORCING PAYMENT OR BRINGING SUIT AGAINST ANY PARTY HERETO.

 

This Long Term
Revolving Note is made under and governed by the laws of, and shall be deemed
to have been executed in, the State of Nebraska without giving effect to choice
of law principles
(whether of the State of Nebraska or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Nebraska.

 

THE BANK AND
THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS LONG TERM REVOLVING NOTE.  NO OFFICER OR EMPLOYEE OF THE BANK HAS
AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

 

Time is of the
essence as to each and every date and each and every Obligation of the Borrower
set forth in this Long Term Revolving Note.

 

[REMAINDER OF
PAGE INTENTIONALLY BLANK; SIGNATURE PAGE TO FOLLOW]

 

 

IN WITNESS WHEREOF, the Borrower has caused
this Long Term Revolving Note to be executed and delivered to the Bank as of
the day and year first written above.

 

	
   

  	
  “Borrower”

  
	
   

  	
   

  
	
   

  	
  LSCP, LLLP,

  
	
   

  	
  an Iowa limited liability limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
         /s/ Stephen G. Roe

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
               President

  

 

 

FIFTH AMENDMENT TO THE

 

AMENDED AND
RESTATED CONSTRUCTION LOAN AGREEMENT

 

EXHIBIT
“E”

 

Reaffirmation of Guaranty

 

[SEE THE ATTACHED]

 

 

REAFFIRMATION OF GUARANTY

 

This will confirm (a) that the
undersigned hereby consents (i) to the terms of that Fifth Amendment to
the Amended and Restated Construction Loan Agreement (the “Fifth Amendment”) of
even date herewith by and between the Borrower and the Bank and (ii) to
the execution and delivery of the Fifth Amendment by the Borrower; (b) that
the Obligations of the Borrower to the Bank under the Loan Agreement (as
defined in the Fifth Amendment) as amended by the Fifth Amendment constitutes
an obligation of the Guarantor to the Bank under the terms and conditions of
the Guaranty; and (c) that all references to the “Loan Agreement”
contained in the Guaranty shall constitute references to the Loan Agreement as
amended by the Fifth Amendment, and as the same may be amended, restated or
otherwise modified from time to time hereafter. 
The undersigned confirms to the Bank that all of the terms, conditions,
provisions, agreements, requirements, promises, obligations, duties, covenants,
and representations of the undersigned under the Guaranty, and any and all
other documents and agreements entered into with respect to the obligations under
the Guaranty, are incorporated herein by this reference as modified hereby and
as so modified, are hereby ratified and affirmed in all respects by the
undersigned.

 

Dated as of July 20, 2008.

 

 

	
   

  	
  “Guarantor”

  
	
   

  	
   

  
	
   

  	
  Little Sioux Corn Processors, L.L.C.,

  
	
   

  	
  an Iowa limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Stephen Roe

  	 

	
   

  	
   

  
	
   

  	
  Name:

  	
  Stephen Roe

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  PresidentExhibit 10

Exhibit 10.23

AIR COMMERCIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE -- GROSS

(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

1. Basic Provisions ("Basic Provisions").

1.1 Parties: This Lease ("Lease"), dated for reference purposes only ,August 8, 2008 is made by and between Glenn Reithinger

("Lessor") and  Baywood Internatiional, Inc.("Lessee"), (collectively the "Parties," or individually a "Party").

1.2 Premises: That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as ,9380 East Bahia Road, Suite 201, Scottsdale, Az. 85260 located in the County of , Maricopa State of  Arizona  and generally described as (describe briefly the nature of the property and, if applicable, the "Project", if the property is located within a Project) approximately 3219 sq ft. of finished office space at the McDowell Mountain ranch Business Center.

("Premises"). (See also Paragraph 2)

1.3 Term:  5  years and  0 months ("Original Term") commencing October 1, 2008 ("Commencement Date") and ending  September 2013 ("Expiration Date"). (See also Paragraph 3)

1.4 Early Possession:  upon execution of lease by both parties ("Early Possession Date"). (See also Paragraphs 3.2 and 3.3)

1.5 Base Rent: $ 4,500.00  per month ("Base Rent"), payable on the 1st day of each month commencing October, 2008.

 (See also Paragraph 4)

 If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 51

1.6 Base Rent and Other Monies Paid Upon Execution:

(a) Base Rent: $  4,500.00  for the period October 2008.

(b) Security Deposit: $0.00 ("Security Deposit"). (See also Paragraph 5)

(c) Association Fees: $ 0.00 for City of Scottsdale Rental Tax Currently 2.15%

(d) Other: $ for.

(e) Total Due Upon Execution of this Lease: $ .

1.7 Agreed Use: General Office uses subject to the 94th Street & McDowell ‘Condominium CC&R’s(if any)

(See also Paragraph 6)

1.8 Insuring Party: Lessor is the "Insuring Party". The annual "Base Premium" is $  0.00 (See also Paragraph 8)

1.9 Real Estate Brokers: (See also Paragraph 15)

(a) Representation: The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check applicable boxes): 

  Business Condo Experts LLC (Harvey)represents Lessor exclusively ("Lessor's Broker");

 represents Lessee exclusively ("Lessee's Broker"); or

 represents both Lessor and Lessee ("Dual Agency").

 

(b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Broker the fee agreed to in their separate written agreement (or if there is no such agreement, the sum of or % of the total Base Rent) for the

brokerage services rendered by the Brokers.

1.10 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by ("Guarantor"). (See also Paragraph 37)

1.11 Attachments. Attached hereto are the following, all of which constitute a part of this Lease:

 an Addendum consisting of Paragraphs 51  through  58

 a plot plan depicting the Premises;

 a current set of the Rules and Regulations;

 a Work Letter;

 other (specify):

2. Premises.

2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and

upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size is more or less. Note: Lessee is advised to verify the actual size prior to executing this Lease.

2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early

Possession Date, whichever first occurs ("Start Date"), and, so long as the required service contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), loading doors, sump pumps, if any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date and that the surface and structural elements of the roof, bearing walls and foundation of any buildings on the Premises (the "Building") shall be free of material defects, and that the Unit does not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law. If a non-compliance with said warranty exists as of the Start Date, or if one of

such systems or elements should malfunction or fail within the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify same at Lessor's expense. The warranty periods shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the remaining systems and other elements of the Building. If Lessee does not give Lessor the required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole  cost and expense, except for the roof, foundations, and bearing walls which are handled as provided in paragraph 7.

2.3 Compliance. Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable  laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") that were in effect at the time that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee's intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense. If Lessee does not give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that non-compliance shall be the obligation of Lessee at Lessee's sole cost and expense. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:

(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the

Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days  thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.

(b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as,  governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date that on which the Base Rent is due, an amount equal to 144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor  shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor's share of such costs have been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to Lessor.

(c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary,

unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease.

2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor and/or Brokers to satisfy itself with respect tothe condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, andcompliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's intended use, (b) Lessee has madesuch investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy ofthe Premises, and (c) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.

2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately

prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.

3. Term.

3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.

3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay

Base Rent shall be abated for the period of such early possession. All other terms of this Lease (including but not limited to the obligations to pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such period. Any such early possession shall not affect the Expiration Date.

3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to

Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered within 60 days after the Commencement Date, Lessee may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If  possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing.

3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.

4. Rent.

4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are

deemed to be rent ("Rent").

4.2 Payment. . Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or

deduction (except as specifically permitted in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated  to pay the amount set forth in this Lease. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its address stated herein or to such other persons or

place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. Payments will be applied first to accrued late charges and attorney's fees, second to accrued interest, then to Base Rent and Operating Expense Increase, and any remaining amount to any other outstanding charges or costs.

4.3 Association Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner's

association or condominium fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent.

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due already due Lessor, for Rents which will be due in the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this 

Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material

change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.

6. Use.

6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is reasonably comparable

thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein, and/or is not significantly more burdensome to the Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include an explanation of Lessor's objections to the change in the Agreed Use.

6.2 Hazardous Substances.

(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product,

substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring  properties.  Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit.

(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be

located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance.

(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or

about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party.

(d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor,

if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into 

by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.

(e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its

employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from  Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.

(f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation

measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure is required as a result of Lessee's use (including "Alterations", as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.

(g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation  as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination.

6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee's

sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the such Requirements, without regard to whether such Requirements are now in effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises.

6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants shall have the right to

enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of a written request therefor.

7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.

7.1 Lessee's Obligations.

(a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the Premises, Utility Installations (intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior and exterior), ceilings, floors, windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee is also responsible for keeping the roof and roof drainage clean and free of debris. Lessor shall keep the surface and structural elements of the roof, foundations, and bearing walls in good repair (see paragraph 7.2). Lessee, in keeping the Premises in 

good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee's obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g. graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including, when necessary, the exterior repainting of the Building.

(b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain contracts, with copies to Lessor, in

customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, and (v) clarifiers. However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse Lessor, upon demand, for the cost thereof. (c) Failure to Perform. If Lessee fails to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee's behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof.

(d) Replacement. Subject to Lessee's indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any time.

7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are intended to be that of the Lessee, except for the surface and structural elements of the roof, foundations and bearing walls, the repair of which shall be the responsibility of Lessor upon receipt of written notice that such a repair is necessary. It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

7.3 Utility Installations; Trade Fixtures; Alterations.

(a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels,

electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations" are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

(b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent.

Lessee may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications. For work which costs an amount in excess of one month's Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor.

(c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or

for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of 

such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor's attorneys' fees and costs.

7.4 Ownership; Removal; Surrender; and Restoration.

(a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility

Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises.

(b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.

(c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises, or if applicable, the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below.

8. Insurance; Indemnity.

8.1 Payment of Premium Increases.

(a) Lessee shall pay to Lessor any insurance cost increase ("Insurance Cost Increase") occurring during the term of this Lease.

Insurance Cost Increase is defined as any increase in the actual cost of the insurance required under Paragraph 8.2(b), 8.3(a) and 8.3(b) ("Required Insurance"), over and above the Base Premium as hereinafter defined calculated on an annual basis. Insurance Cost Increase shall include but not be limited to increases resulting from the nature of Lessee's occupancy, any act or omission of Lessee, requirements of the holder of mortgage or deed of trust covering the Premises, increased valuation of the Premises and/or a premium rate increase. The parties are encouraged to fill in the Base Premium in paragraph 1.8 with a reasonable premium for the Required Insurance based on the Agreed Use of the Premises. If the parties fail to insert a dollar amount in Paragraph 1.8, then the Base Premium shall be the lowest annual premium reasonably obtainable for the Required Insurance as of the commencement of the Original Term for the Agreed Use of the Premises. In no event, however, shall Lessee be responsible for any portion of the

increase in the premium cost attributable to liability insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. (b) Lessee shall pay any such Insurance Cost Increase to Lessor within 30 days after receipt by Lessee of a copy of the premium statement or other reasonable evidence of the amount due. If the insurance policies maintained hereunder cover other property besides the Premises, Lessor shall also deliver to Lessee a statement of the amount of such Insurance Cost Increase attributable only to the Premises showing in reasonable detail the manner in which such amount was computed. Premiums for policy periods commencing prior to, or extending beyond the term of this Lease, shall be prorated to correspond to the term of this Lease.

8.2 Liability Insurance.

(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional Insured-Managers or Lessors of Premises" Endorsement. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only.

(b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein.

8.3 Property Insurance - Building, Improvements and Rental Value.

(a) Building and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to  he full insurable replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. If Lessor is the Insuring Party, however, Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be insured by Lessee under Paragraph 8.4 rather than by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender or included in the Base Premium), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an Insured Loss.

(b) Rental Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days ("Rental Value insurance"). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be liable for any deductible amount in the event of such loss.

(c) Adjacent Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises.

8.4 Lessee's Property; Business Interruption Insurance.

(a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in force.

(b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils.

(c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease.

8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to transact business in the state

where the Premises are located, and maintaining during the policy term a "General Policyholders Rating" of at least A-, VI, as set forth in the most current issue of "Best's Insurance Guide", or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable byLessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.

8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the

other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby.

8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee

shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.

8.8 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its

agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce

the provisions of any other lease in the Project, or (iii) injury to Lessee's business or for any loss of income or profit therefrom. Instead, it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.

8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required

herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or certificates evidencing the existance of the required insurance, the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/ costs that Lessor will incur by reason of Lessee's failure to maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease.

9. Damage or Destruction.

9.1 Definitions.

(a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee

Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall not include damage to windows, doors, and/or other similar items which Lessee has the responsibility to repair or replace pursuant to the provisions of Paragraph 7.1.

(b) "Premises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved.

(d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable  Requirements, and without deduction for depreciation.

(e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a

contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises which requires repair, remediation, or restoration.

9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's

expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee's responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall

not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.

9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a

negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease

shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.

9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.

9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair

exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shall be extinguished.

9.6 Abatement of Rent; Lessee's Remedies.

(a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for

which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein.

(b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful  way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect. "Commence" shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.

9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable

adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor.

10. Real Property Taxes.

10.1 Definition. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Premises or the Project, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease.

10.2

(a) Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Premises provided, however, that Lessee shall pay to Lessor the amount, if any, by which Real Property Taxes applicable to the Premises increase over the fiscal tax year during which the Commencement Date Occurs (”Tax Increase“). Payment of any such Tax Increase shall be made by Lessee to Lessor within 30 days after receipt of  Lessor’s written statement setting forth the amount due and computation thereof. If any such taxes shall cover any period of time prior to or after the expiration or termination of this Lease, Lessee’s share of such taxes shall be prorated to cover only that portion of the tax bill applicable to the period that this Lease is in effect. In the event lessee incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require that the Tax Increase be paid in advance to Lessor by Lessee monthly in advance with the payment of the Base Rent. Such monthly payment shall be an amount equal to the amount of the estimated installment of the Tax Increase divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount of the applicable Tax Increase is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable Tax Increase. If the amount collected by Lessor is insufficient to pay the Tax Increase when due, Lessee shall pay Lessor, upon demand, such additional sums as are necessary to pay such obligations. Advance payments may be intermingled with other moneys of Lessor and shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance payments may be treated by Lessor as an additional Security Deposit.

(b) Additional Improvements. Notwithstanding anything to the contrary in this Paragraph 10.2, Lessee shall pay to Lessor upon demand therefor the entirety of any increase in Real Property Taxes assessed by reason of Alterations or Utility Installations placed upon the Premises by Lessee or at Lessee's request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution of this Lease by the Parties.

10.3 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Tax

Increase for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available.

10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned

Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property.

11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's 

reasonable control or in cooperation with governmental request or directions.

12. Assignment and Subletting.

12.1 Lessor's Consent Required.

(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or

assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior written consent.

(b) Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control for this purpose.

(c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition,

financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.

(d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the event of such Breach and rental adjustment, (i) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment 

to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent.

(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief.

(f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is

requested.

(g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, ie. 20 square feet or less, to be used by a third

party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting.

12.2 Terms and Conditions Applicable to Assignment and Subletting.

(a) Regardless of Lessor's consent, no assignment or subletting shall: (i) be effective without the express written assumption by

such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.

(b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or

disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach.

(c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.

(d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.

(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's

determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor's considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (See also Paragraph 36)

(f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing.

(g) Lessor's consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the

original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2)

12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:

(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may

collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee's obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach

exists in the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary.

(b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor.

(c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.

(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent.

(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee.

13. Default; Breach; Remedies.

13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of the terms, covenants,

conditions or Rules and Regulations under this Lease. A "Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:

(a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of

security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism.

(b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES.

(c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts

constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days following written notice to Lessee.

(d) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service

contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee.

(e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that if the nature of Lessee's Default is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion.

(f) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of

creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other  judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged

within 30 days; provided, however, in the event that any provision of this subparagraph (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions.

(g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.

(h) If the performance of Lessee's obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at

the time of execution of this Lease.

13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:

(a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and

Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Lessee proves could be 

reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by

discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages  under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute.

(b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may

sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession.

(c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises.

13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for

Lessee of any cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.

13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not

contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater. The Parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance.

13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to

scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment, shall bear interest from the date when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments. The interest ("Interest") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late

charge provided for in Paragraph 13.4.

13.6 Breach by Lessor.

(a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor's obligation is such that more than 30 days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such 30 day period and thereafter diligently pursued to completion.

(b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days

after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent or the Security 

Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost of said cure and supply said documentation to Lessor.

14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 10% of the Building, or more than 25% of that portion of the Premises not occupied by any building, is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage

to the Premises caused by such Condemnation.

15. Brokerage Fees.

15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers a fee in accordance with the schedule of the Brokers in effect at the time of the execution of this Lease.

15.2 Assumption of Obligations. Any buyer or transferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecting any brokerage fee owed.

15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto.

16. Estoppel Certificates.

(a) Each Party (as "Responding Party") shall within 10 days after written notice from the other Party (the "Requesting Party")

execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current "Estoppel Certificate" form published by the AIR Commercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably r equested by the Requesting Party.

(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more than one month's rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the

Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.

(c) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee title to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. 

Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.

18. Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

19. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to calendar days.

20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability

of Lessor with respect to this Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction.

21. Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.

22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party.

23. Notices.

23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.

23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of

delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

24. Waivers.

(a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a

waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent.

(b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee

may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment.

(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS

RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.

25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.

(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should

from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows:

(i) Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor

only. A Lessor's agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the 

diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.

 (ii) Lessee's Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not

the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.

(iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more

associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker.

(c) Lessor and Lessee agree to identify to Brokers as "Confidential" any communication or information given Brokers that is

considered by such Party to be confidential.

26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.

27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.

29. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.

30. Subordination; Attornment; Non-Disturbance.

30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.

30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Devise to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations, except that such new owner shall not: 

(a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of

ownership;

(b) be subject to any offsets or defenses which Lessee might have against any prior lessor,

(c) be bound by prepayment of more than one month's rent, or

(d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner.

30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's

subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.

30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein.

31. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation).

32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee.

33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

34. Signs. Lessor may place on the Premises ordinary "For Sale" signs at any time and ordinary "For Lease" signs during the last 6 months of the term hereof. Except for ordinary "for sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent. All signs must comply with all Applicable Requirements.

35. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest.

36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor. Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor's consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request.

37. Guarantor.

37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently published by the AIR Commercial Real Estate Association.

37.2 Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the

execution of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.

38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.

39. Options. If Lessee is granted an Option, as defined below, then the following provisions shall apply:

39.1 Definition. "Option" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor.

39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.

39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be

exercised unless the prior Options have been validly exercised.

39.4 Effect of Default on Options.

(a) Lessee shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.

(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an Option because of the provisions of Paragraph 39.4(a). (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breach of this Lease.

40. Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties, including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses incurred in connection with such rules and regulations.

41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.

42. Reservations. Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.

43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be

entitled to recover such sum or so much thereof as it was not legally required to pay. A Party who does not initiate suit for the recovery of sums paid "under protest" within 6 months shall be deemed to have waived its right to protest such payment.

44. Authority; Multiple Parties; Execution.

(a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual

executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority.

(b) If this Lease is executed by more than one person or entity as "Lessee", each such person or entity shall be jointly and

severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such document.

(c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which

together shall constitute one and the same instrument.

45. Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.

46. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.

47. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.

48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and/or the Arbitration of disputes between the Parties and/or Brokers arising out of this Lease  is  is not attached to this Lease.

50. Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee's expense.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE  THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF 

THIS LEASE OR THE TRANSACTION TO WHICHIT RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.

WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED.

The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.

Executed at:

On:

Executed at:

On:

By LESSOR: Glenn Reithinger

 By LESSEE: Baywood Internatiional, Inc.

By:

Name Printed:

Title:

By:

Name Printed:

Title:

Address:

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Facsimile: ( )

Federal ID No.

By:

Name Printed:

Title:

By:

Name Printed:

Title:

Address:

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Facsimile: ( )

Federal ID No.

BROKER: BROKER:

Att:

Title:

Address:

Telephone:( )

Facsimile:( )

Federal ID No.

Att:

Title:

Address:

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Federal ID No.

NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017.

Telephone No. (213) 687-8777. Fax No.: (213) 687-8616.

© Copyright 2001 - By AIR Commercial Real Estate Association. All rights reserved.

No part of these works may be reproduced in any form without permission in writing.

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