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DEBTOR NAME AND ADDRESS SECURED PARTY NAME AND ADDRESS
THE BETTER ENERGY COMPANY, LLC FIRST FARMERS & MERCHANTS NATIONAL BANK
18TH & MINNESOTA, 000 X. 00XX XX. 000 XXXX XXXX, XX XXX 000
XXXXX XXXXX, XX 00000 XXXXXXX, XX 00000
00-0000000 00-0000000
Type: |_| individual |_| partnership |X| corporation |_| ________________
State of organization/registration (if applicable) SD______________________________
|_| If checked, refer to addendum for additional Debtors and signatures.
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COMMERCIAL SECURITY AGREEMENT
The date of this Commercial Security Agreement (Agreement) is 10-18-2002
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SECURED DEBTS. This Agreement will secure all sums advanced by Secured Party
under the terms of this Agreement and the payment and performance of the
following described Secured Debts that (check one) |X| Debtor |_|
_________________________________________________________________(Borrower)
owes to Secured Party:
|X| Specific Debts. The following debts and all extensions, renewals,
refinancings, modifications, and replacements (describe): NOTE #108206
DATED OCTOBER 18, 2002
|_| All Debts. All present and future debts, even if this Agreement is not
referenced, the debts are also secured by other collateral, or the
future debt is unrelated to or of a different type than the current
debt.
SECURITY INTEREST. To secure the payment and performance of the Secured Debts,
Debtor gives Secured Party a security interest in all of the Property
described in this Agreement that Debtor owns or has sufficient rights in
which to transfer an interest, now or in the future, wherever the Property
is or will be located, and all proceeds and products of the Property.
"Property" includes all parts, accessories, repairs, replacements,
improvements, and accessions to the Property; any original evidence of this
or ownerships and all obligations that support the payment or performance
of the Property. "Proceeds" includes anything acquired upon the sale,
lease, license, exchange, or other disposition of the Property; any rights
and claims arising from the Property; and any collections and distributions
on account of the Property. This Agreement remains in effect until
terminated in writing, even if the Secured Debts are paid and Secured Party
is no longer obligated to advance funds to Debtor or Borrower.
PROPERTY DESCRIPTION. The Property is described as follows:
|X| Accounts and Other Rights to Payment: All rights to payment, whether or not
earned by performance, including, but not limited to, payment for property
or services sold, leased, rented, licensed, or assigned. This includes any
rights and interests (including all liens) which Debtor may have by law or
agreement against any account debtor or obligor of Debtor.
|_| Inventory: All inventory held for ultimate sale or lease, or which has been
or will be supplied under contracts of service, or which are raw materials,
work in process, materials used or consumed in Debtor's business.
|_| Equipment: All equipment including, but not limited to, machinery,
vehicles, furniture, fixtures, manufacturing equipment, farm machinery and
equipment, shop equipment, office and record keeping equipment, parts, and
tools. The Property includes any equipment described in a list or schedule
Debtor gives to Secured Party, but such a list is not necessary to create a
valid security interest in all of Debtor's equipment.
|_| Instructions and Chattel Paper: All installments, including negotiable
instruments and promissory notes and any other writings or records that
evidence the right to payment of a monetary obligation, and tangible and
electronic chattel paper.
|_| General Intangibles: All general intangibles including, but not limited to,
tax refunds, patents and applications for patents, copyrights, trademarks,
trade secrets, goodwill, trade names, customer lists, permits and
franchises, payment intangibles, computer programs and all supporting
information provided in connection with a transaction relating in computer
programs, and the right to use Debtor's name.
|_| Documents: All documents of title including, but not limited to, bills of
lading, dock warrants and receipts, and warehouse receipts.
|_| Farm Products and Supplies: Al farm products including, but not limited to,
all poultry and livestock and their young, along with their produce,
products, and replacements; all crops, annual or perennial, and all
products of the crops and all feed, seed, fertilizer, medicines, and other
supplies used or produced in Debtor's farming operations.
|_| Government Payments and Programs: All payments, accounts, general
intangibles, and benefits including, but not limited to, payments in kind,
deficiency payments, letters of entitlement, warehouse receipts, storage
payments, emergency assistance and diversion payments, production
flexibility contracts, and conservation reserve payments under any
preexisting, current, or future federal or state government program.
|X| Investment Property: All investment property including, but not limited to,
certificated securities, uncertificated securities, securities
entitlements, securities accounts, commodity contracts, commodity accounts,
and financial assets.
|X| Deposits Accounts All deposit accounts including, but not limited to,
demand, time, savings, passbook, and similar accounts.
|X| Specific Property Description: The Property includes, but is not limited
by, the following (if required, provide real estate description):
3,060 SHARES IN HUSKER AG PROCESSING, LLC
PERSONAL GUARANTEES JOINT & SEVERAL DATED 10-18-02
LOAN AGREEMENT DATED 10-18-02
UCC-1 FILED IN SOUTH DAKOTA
ASSIGNMENT OF DIVIDENDS ISSUED BY HUSKER AG PROCESSING, LLC
USE OF PROPERTY. The Property will be used for |_| personal
|X| business |_| agricultural |_| _____________________________
purposes.
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SIGNATURES. Xxxxxx agrees to the terms on pages 1 and 2 of this Agreement and acknowledges receipt of a copy of
this Agreement.
DEBTOR SECURED PARTY
THE BETTER ENERGY COMPANY, LLC FIRST FARMERS & MERCHANTS NATIONAL BANK
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XXXXX XXXX; XXXXXX XXXX XXXXXXXX BOOM
PRESIDENT; SECRETARY VICE PRESIDENT
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XXXXX XXXX; XXXXX XXXX
VICE PRESIDENT; TREASURER
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Expert TM 2000 Bankers Systems, Inc., St. Cloud, MN Form SA-BUS 7/24/2001 (page 1 of 2)
GENERAL PROVISIONS. Each Debtor's obligations under this Agreement are
independent of the obligations of any other Debtor. Secured Party may sue each
Debtor individually or together with any other Debtor. Secured Party may release
any part of the Property and Debtor will remain obligated under this Agreement.
The duties and benefits of this Agreement will bind the successors and assigns
of Debtor and Secured Party. No modification of this Agreement is effective
unless made in writing and signed by Xxxxxx and Secured Party; however used, the
plural includes the singular and the singular includes the plural. Time is of
the essence.
APPLICABLE LAW. This Agreement is governed by the laws of the state in which
Secured party is located. In the event of a dispute, the exclusive forum, venue,
and place of jurisdiction will be the state in which Secured Party is located,
unless otherwise required by law. If any revision of this Agreement is
unenforceable by law, the unenforceable provision will be severed and the
remaining provisions will still be enforceable.
NAME AND LOCATION. Xxxxxx's name indicated on page 1 is Xxxxxx's exact legal
name. If Debtor is an individual, Xxxxxx's address is Xxxxxx's principal
residence. If Debtor is not an individual, Xxxxxx's address is the location of
Debtor's chief executive offices or sole place of business. If Debtor is an
entity organized and registered under state law, Debtor has provided Debtor's
state of registration on page 1. Debtor will provide verification of
registration and location upon Secured Party's request. Debtor will provide
Secured Party with at least 30 days notice prior to any change in Debtor's name,
address, or state of organization or registration.
WARRANTIES AND REPRESENTATIONS. Debtor has the right, authority, and power to
enter into this Agreement. The execution and delivery of this Agreement will not
violate any agreement governing Debtor or Debtor's property, or to which Debtor
is a party. Debtor makes the following warranties and representations which
continue as long as this Agreement is in effect:
(1) Debtor is duly organized and validly existing in all jurisdictions in which
Debtor does business;
(2) the execution and performance of the terms of this Agreement have been duly
authorized, have received all necessary governmental approval, and will not
violate any provision of law or order;
(3) other than previously disclosed to Secured Party, Debtor has not changed
Xxxxxx's name or principal place of business within the last 10 years and
has not used any other trade or fictitious name; and
(4) Debtor does not and will not use any other name without Secured Party's
prior written consent.
Debtor owns all of the Property, and Secured Party's claim to the Property is
ahead of the claims of any other creditor, except as otherwise agreed and
disclosed to Secured Party prior to any advance on the Secured Debts. The
Property has not been used for any purpose that would violate any laws or
subject the Property to forfeiture or seizure. DUTIES TOWARD PROPERTY. Debtor
will protect the Property and Secured Party's interest against any competing
claim. Except as otherwise agreed, Xxxxxx will keep the Property in Debtor's
possession at the address indicated on page 1 of this Agreement. Debtor will
keep the Property in good repair and use the Property only for purposes
specified on page 1. Debtor will not use the Property only for purposes
specified on page 1. Debtor will not use the Property in violation of any law
and will pay all taxes and assessments levied or assessed against the Property.
Secured Party has the right of reasonable access to inspect the Property,
including the right to require Debtor to assemble and make the Property
available to Secured Party. Debtor will immediately notify Secured Party of any
loss or damage to the Property. Debtor will prepare and keep books, records, and
accounts about the Property and Xxxxxx's business, to which Debtor will allow
Secured Party reasonable access. Debtor will not sell, offer to sell, license,
lease, or otherwise transfer or encumber the Property without Secured Party's
prior written consent. Any disposition of the Property will violate Secured
Party's rights, unless the Property is inventory sold in the ordinary course of
business at fair market value. If the Property includes chattel paper or
instruments, either as original collateral or as proceeds of the Property,
Debtor will record Secured Party's interest on the face of the chattel paper or
instruments. If the Property includes accounts, Xxxxxx will not settle any
account for less than the full value, dispose of the accounts by assignment, or
make any material change in the terms of any account without Secured Party's
prior written consent. Debtor will collect all accounts in the ordinary course
of business, unless otherwise required by Secured Party. Debtor will keep the
proceeds of the accounts, and any goods returned to Debtor, in trust for Secured
Party at Secured Party's request. Debtor will give Secured Party all statements,
reports, certificates, lists of account debtors (showing names, addresses, and
amounts owing), invoices applicable to each account, and any other data
pertaining to the accounts as Secured Party requests.
If the Property includes farm products, Debtor will provide Secured Party with a
list of the buyers, commission merchants, and selling agents to or through whom
Debtor may sell the farm products. Debtor authorizes Secured Party to notify any
additional parties regarding Secured Party's interest in Debtor's farm products,
unless prohibited by law. Xxxxxx agrees to plant, cultivate, and harvest crops
in due season.
Debtor will be in default if any loan proceeds are used for a purpose that will
contribute to excessive erosion of highly erodible land or to the conversion of
wetland to produce or to make possible the production of an agricultural
commodity, further explained in 7 CFR Part 1940, Subpart G, Exhibit M. If Debtor
pledges the Property to Secured Party (delivers the Property into the possession
or control of Secured Party or a designated third party), Debtor will, upon
receipt, deliver any proceeds and products of the Property to Secured Party.
Debtor will provide Secured Party with any notices, documents, financial
statements, reports, and other information relating to the Property Debtor
receives as the owner of the Property.
PERFECTION OF SECURITY INTEREST. Debtor authorizes Secured Party to file a
financing statement covering the Property. Debtor will comply with, facilitate,
and otherwise assist Secured Party in connection with obtaining possession or
control over the Property for purposes of perfecting Secured Party's interest
under the Uniform Commercial Code.
INSURANCE. Xxxxxx agrees to keep the Property insured against the risks
reasonably associated with the Property until the Property is released from this
Agreement. Debtor will maintain this insurance in the amounts Secured party
requires. Debtor may choose the insurance company, subject to Secured Party's
approval, which will not be unreasonably withheld. Debtor will have the
insurance provider name Secured Party as loss payee on the insurance policy.
Debtor will give Secured Party and the insurance provider immediate notice of
any loss. Secured Party may apply the insurance proceeds toward the Secured
Debts. Secured Party may require additional security as a condition of
permitting any insurance proceeds to be used to repair or replace the Property.
If Secured Party acquires the property in damaged condition, Xxxxxx's rights to
any insurance policies and proceeds will pass to Secured Party to the extent of
the Secured Debts. Debtor will immediately notify Secured Party of the
cancellation or termination of insurance. If Xxxxxx fails to keep the Property
insured, or fails to provide Secured Party with proof of insurance, Secured
Party may obtain insurance to protect Secured Party's interest in the Property.
The insurance may include coverages not originally required of Debtor, may be
written by a company other than one Debtor would choose, and may be written at a
higher rate than Debtor could obtain if Debtor purchased the insurance.
AUTHORITY TO PERFORM. Debtor authorizes Secured Party to do anything Secured
Party deems reasonably necessary to protect the Property and Secured Party's
interest in the Property. If Xxxxxx fails to perform any of Xxxxxx's duties
under this Agreement, Secured Party is authorized, without notice to Debtor, to
perform the duties or cause them to be performed. These authorizations include,
but are not limited to, permission to pay for the repair, maintenance, and
preservation of the Property and take any action to realize the value of the
Property. Secured Party's authority to perform for Debtor does not create an
obligation to perform and Secured Party's failure to perform will not preclude
Secured Party from exercising any other rights under the law or this Agreement.
If Secured Party performs for Debtor, Secured Party will use reasonable care.
Reasonable care will not include any steps necessary to preserve rights against
prior parties or any duty to take action in connection with the management of
the Property.
If Secured Party comes into possession of the Property, Secured Party will
preserve and protect the Property to the extent required by law. Secured Party's
duty of care with respect to the Property will be satisfied if Secured Party
exercises reasonable care in the safekeeping of the Property or in the selection
of a third party in possession of the Property.
Secured Party may enforce the obligations of an account debtor or other person
obligated on the Property. Secured Party may exercise Debtor's rights with
respect to the account debtor's or other person's obligations to make payment or
otherwise render performance to Debtor, and enforce any security interest that
secures such obligations.
PURCHASE MONEY SECURITY INTEREST. If the Property includes items purchased with
the Secured Debts, the Property purchased with the Secured Debts will remain
subject to Secured Party's security interest until the Secured Debts are paid in
full. Payments on any non-purchase money loan also secured by this Agreement
will not be applied to the purchase money loan. Payments on the purchase money
loan will be applied first to the non-purchase money portion of the loan, if
any, and then to the purchase money portion in the order in which the purchase
money Property was acquired. If the purchase money Property was acquired at the
same time, payments will be applied in the order Secured Party selects. No
security interest will be terminated by application of this formula.
DEFAULT. Debtor will be in default if:
(1) make all or any part of the Secured Debts immediately due and accrue
interest at the highest post-maturity interest rate,
(2) require Debtor to gather the Property and make it available to Secured
Party in a reasonable fashion,
(3) enter upon Xxxxxx's premises and take possession of all or any part of
Debtor's property for purposes of preserving the Property or its value and
use and operate Debtor's property to protect Secured Party's interest, all
without payment or compensation to Debtor,
(4) use any remedy allowed by state or federal law, or provided in any
agreement evidencing or pertaining to the Secured Debts.
If Secured Party repossesses the Property or enforces the obligations of an
account debtor, Secured Party may keep or dispose of the Property as provided by
law Secured Party will apply the proceeds of any collection or disposition first
to Secured Party's expenses of enforcement, which includes reasonable attorneys'
fees and legal expenses to the extent not prohibited by law, and then to the
Secured Debts. Debtor (or Borrower, if not the same) will be liable for the
deficiency, if any.
By choosing any one or more of these remedies, by Secured Party does not give up
the right to use any other remedy. Secured Party does not waive a default by not
using a remedy.
WAIVER. Debtor waives all claims for damages caused by Secured Party's acts or
omissions where Secured Party acts in good faith.
NOTICE AND ADDITIONAL DOCUMENTS. Where notice is required, Xxxxxx agrees that 10
days prior written notice will be reasonable notice to Debtor under the Uniform
Commercial Code Notice to one party is notice to all parties. Xxxxxx agrees to
sign, deliver, and file any additional documents and certifications Secured
Party considers necessary to perfect, continue, or preserve Debtor's obligations
under this Agreement and to confirm Secured Party's lien status on the Property.
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Expert TM 2000 Bankers Systems, Inc., St. Cloud, MN Form (page 2 of 2)
SA-BUS 7/24/2001
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