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Assn. No. B.O. No. CIF No. SECURITY AGREEMENT
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53 70 1929535
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1. GRANT OF SECURITY INTEREST. For value received, the undersigned Debtor,
whether one or more, grants to Agstar Financial Services, PCA ("Secured
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Party"), whose address is 0000 Xxxxxxx Xxxxx Xxxxxxx, Xxxxxxxxx 00000, a
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security interest in all of the Debtor's rights, title, and interest in the
property described in Section 2, including all rights to transfer an
interest in the Collateral ("Collateral"), to secure the payment and
performance of the obligations described in Section 3 ("Obligations").
2. COLLATERAL DESCRIPTION. The Collateral is the property described in one or
more Exhibits to this Agreement which are by this reference incorporated
into this Agreement.
3. OBLIGATIONS SECURED. "Obligations" means: (a) all existing and future
loans, advances, indebtedness and payment and performance obligations owed
or owing to Secured Party arising out of existing or future credit granted
by Secured Party to Debtor (or any of them, if more than one), to Debtor
and another, to another guaranteed or endorsed by Debtor, or to another
designated by Debtor, whether direct or indirect, absolute or contingent,
including both consumer and commercial credit, and both long-term and
short-term credit; and (b) all existing and future payment and performance
obligations of Debtor arising out of this Agreement; and (c) all costs and
expenses incurred by Secured Party in protecting or enforcing its rights
under this Agreement with interest from the date incurred at Secured
Party's applicable loan rate on the date incurred, including, to the extent
permitted by law, attorneys' fees and legal costs and expenses.
4. DEBTOR'S DUTIES REGARDING COLLATERAL.
4.1 Prohibition on Disposition of Collateral by Debtor. DEBTOR SHALL NOT
SELL, STORE OFF-FARM, LEASE OR OTHERWISE DISPOSE OF ANY COLLATERAL
EXCEPT AS FOLLOWS:
a) Subject to any restrictions stated in an addendum to this Agreement
and to Secured Party's continuing security interest in all proceeds
and accounts arising from permitted disposition of Collateral, Debtor,
before default, may in a commercially reasonable manner, (1) market
milk, (2) market eggs, and (3) use feed, crops and products of crops
as feed for Debtor's livestock and poultry; or b) as specifically
authorized in writing signed by Secured Party or in an addendum to
this Agreement, Secured Party reserves the right, in its sole
discretion, to revoke or modify any permission given Debtor to dispose
of Collateral.
4.2 Ownership Warranty. Debtor warrants that Debtor is the absolute owner
of all Collateral free of all interests, liens, encumbrances, options
and security interests except: (a) Secured Party's security interest
and (b) those disclosed to Secured Party and Debtor in writing.
4.3 Residence and Location. Debtor's residence (if Debtor is a Registered
Organization, the State of Organization) is in the state shown above
Debtor's signature. The Debtor has provided the Secured Party with
information concerning the location of the Collateral and the Debtor
warrants to the Secured Party that such information is true, accurate,
and complete. Except with the prior written consent of the Secured
Party, the Debtor shall not remove any Collateral from any location as
provided to the Secured Party. Debtor shall immediately inform Secured
Party in writing of any change in Debtor's address or the location of
the Collateral.
4.4 Records and Reports. Debtor shall keep permanent records of all
material information on the acquisition, maintenance, identification
and disposition of all Collateral in a form acceptable to Secured
Party. Secured Party shall have the right to examine and copy these
records at reasonable times and places. Debtor's records are kept at
Debtor's present residence and shall not be removed from the state of
Debtor's present residence. Debtor agrees to furnish Secured Party
with written reports on the Collateral with content and at times as
Secured Party may reasonably request.
4.5 Maintenance of Collateral. Debtor shall: (a) care for the Collateral
in accordance with good agricultural practices and not permit its
value to be impaired; (b) keep it free from all liens, encumbrances
and security interests (other than those created or expressly
permitted by this Agreement); (c) defend it against all claims and
legal proceedings by persons other than Secured Party; (d) pay and
discharge when due all taxes, license fees, levies and other charges
upon it; (e) not permit it to become a fixture or an accession to
other goods except as specifically authorized in a writing signed by
Secured Party; and (f) not permit it to be used in violation of any
law, regulation or policy of insurance. Loss of or damage to the
Collateral shall not release Debtor from any of the Obligations.
4.6 Insurance. Debtor shall keep all Collateral and Secured Party's
interest in it insured under policies with provisions, coverages,
amounts and by insurance satisfactory to Secured Party. At Secured
Party's request, Secured Party shall be specifically named in an
appropriate union or standard mortgage clause endorsed on the policy.
Debtor assigns and directs any insurer to apply to Secured Party the
proceeds of this insurance and all premium refunds. Secured Party
shall have the option to apply the proceeds and refunds to any of the
Obligations, whether or not due, or to restoration of the Collateral,
returning any excess to Debtor. Secured Party is authorized, in the
name of the Debtor or otherwise, to make, adjust and settle claims
under any credit insurance financed by Secured Party or any insurance
on the Collateral and to cancel the insurance after the occurrence of
an event of Default.
4.7 Inspection. Debtor shall permit and assist Secured Party to verify and
inspect the Collateral wherever located at reasonable times.
THIS AGREEMENT INCLUDES ALL THE PROVISIONS ON ADDITIONAL PAGES OF THIS
AGREEMENT. BY SIGNING, DEBTOR ACKNOWLEDGES THAT DEBTOR HAS READ ALL OF
THESE PROVISIONS AND HAS RECEIVED AN EXACT COPY OF THIS AGREEMENT.
Debtor's State(s) of Residence of Organization: Minnesota
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Dated: December 12, 2001
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CORN-xx Xxxxx Farmers' Cooperative
a Minnesota Cooperative
__________________________________________ _____________________________
By: Xxxxxx Xxxxxx, President By: XxXxx Xxxx, Treasurer
SECURITY AGREEMENT (Page 2 of 3)
5. DEFAULT.
5.1 Default by Debtor. Each of the following constitutes a default under
this Agreement by Debtor ("Default"): (a) Failure to pay when due any
principal, interest, advances, late charges, costs, attorneys' fees or
other charges incurred on any of the Obligations; (b) The sale or
other disposition of any of the Collateral when it is not authorized
by this Agreement; (c) Failure to perform or observe any warranty,
agreement or obligation contained in this Agreement or in any
mortgage, deed of trust, security agreement, loan application or any
evidence of or document relating to any of the Obligations; (d) Any
warranty or information given to Secured Party in connection with this
Agreement or any of the Obligations is false in any material respect
when made; (e) Loss, theft, substantial damage, destruction or
encumbrance of any of the Collateral or the making of any levy,
seizure or attachment against it; (f) The acceleration of the maturity
of Debtor's indebtedness to any other creditor; (g) The death,
dissolution or termination of existence, insolvency, business failure,
appointment of a receiver for any property, assignment for the benefit
of creditors, the commencement of any proceeding under any bankruptcy
or insolvency laws, of, by, or against Debtor or any guarantor or
surety of Debtor; (h) Failure of any of Debtor's account debtors or
obligors to make payment when due or to honor Secured Party's security
interest; (i) The occurrence of any event when causes Secured Party in
good faith to believe that the Obligations are inadequately secured or
the prospect of payment, performance or realization on the Collateral
is impaired; (j) A default under any lease executed by Debtor under
which the Secured Party is the lessor or a default under any other
loan or lease that any Debtor has with either the Secured Party's
parent association or any subsidiaries of the Secured Party's parent
association.
5.2 Secured Party's Remedies. Secured Party, in addition to other rights
and remedies provided in this Agreement or in any evidence of or
document associated with the Obligations or provided by law, may do
any one or more of the following if a Default occurs under Section
5.1: (a) Declare any or all Obligations immediately due and payable;
(b) Refuse to make advances under any commitment; (c) Exercise all
rights and remedies of a secured party under the Uniform Commercial
Code; (d) Without notice to the Debtor or judicial process, peaceably
enter upon any premises where the Collateral is located, take
possession of all or any part of it, and remove it from the premises;
(e) Require Debtor at Debtor's expense to assemble all or part of the
Collateral as directed by Secured Party and make it available to
Secured Party at a place to be designed by Secured Party which is
reasonably convenient to both parties; (f) Sell, lease or otherwise
dispose of all or any part of the Collateral, without notice to Debtor
except as required by law, in one, or more parcels at public or
private proceedings on such terms as Secured Party may deem
commercially reasonably; (g) Occupy and use the Debtor's premises,
pasturage, feed troughs and water to care for livestock Collateral;
(h) Crops are perishable and may decline rapidly in value and Secured
Party at Debtor's expense may protect, cultivate, harvest, thresh and
combine crops and sell them at private sale; (i)Apply the proceeds of
Debtor's Association stock and participation certificates to the
Obligations in such order and at such times as Secured Party shall
determine; (j) Require Debtor to reimburse Secured Party out of
proceeds from the disposition of Collateral or otherwise for expenses
incurred by Secured Party in protecting or enforcing its rights under
this Agreement. These expenses include the expenses of retaking,
holding, preparing for sale or other disposition, and selling or
dispensing of the Collateral and, to the extent not prohibited by law,
attorneys' fees and legal expenses. Secured Party may charge these
expenses to any of the Obligations and Debtor shall pay them upon
demand with interest from the date incurred at the rate in effect on
the date incurred on the applicable Obligation. After deduction of
these expenses, Secured Party may apply the proceeds of disposition to
the Obligations in the order and amounts it elects; (k) If there is
any security or collateral other than the collateral described in this
Agreement for any of the Obligations, then Secured Party may proceed
upon the Collateral and the other security and collateral either
concurrently or separately, in any order it chooses.
5.3 Commercially Reasonable. In addition to other means which are
commercially reasonable: (a) commercially reasonable notice is written
notice sent to any address of Debtor given by Debtor to Secured Party
in conjunction with this Agreement at least 10 calendar days (counting
the day of sending) before the date of a proposed disposition of
Collateral; and (b) commercially reasonable means of disposition of
livestock include a sale through a livestock market and through a
licensed livestock sales company.
6. MISCELLANEOUS PROVISIONS.
6.1 True Information. Debtor warrants that all information, statements and
warranties given by or on behalf of Debtor to Secured Party in
connection with this Agreement or the Obligations are true and
correct.
6.2 Collections. (a) At any time Secured Party may, and Debtor shall upon
request, notify Debtor's account debtors and obligors on Instruments
to make payment directly to Secured Party. Secured Party may enforce
collection of, settle, compromise, extend or renew the indebtedness of
such account debtors and obligors. Unless this notification is given,
Debtor, as agent of Secured Party, shall collect accounts and
instruments, (b) When required by Secured Party, all proceeds of
Collateral received by Debtor shall be held by Debtor upon an express
trust for Secured Party, shall not be commingled with any other funds
or property of Debtor and shall be turned over to Secured Party in
precisely the form received (but endorsed by Debtor, if necessary for
collection) not later than the third business day following the date
of receipt. All proceeds of Collateral received by Secured Party
directly or from Debtor shall be applied against the Obligations in
such order and at such times as Secured Party shall determine.
6.3 Maintenance of Security Interest. To the extent permitted by law,
Debtor shall pay all expenses, and upon request take any action
reasonably deemed advisable by Secured Party, to preserve the
Collateral or to establish, determine priority of, perfect, continue
perfected, preserve, enforce or terminate Secured Party's rights and
interests under this Agreement.
6.4 Power of Attorney. Debtor hereby irrevocably appoints Secured Party as
Debtor's attorney-in-fact to act for Debtor will full authority in the
place and name of Debtor to take action and to execute any instrument
which the Secured Party may deem advisable to accomplish the purposes
of this Agreement, including authority: (a) to endorse, collect, xxx
for, compromise and receive any drafts, instruments, documents or
moneys due in connection with the Collateral; (b) to file any claims
or take any action or institute any proceedings which Secured Party
may deem desirable for the collection of any of the Collateral or
otherwise to enforce the rights of Secured Party with respect to any
of the Collateral; (c) to disburse funds including paying insurance
premiums, taxes, liens, and other costs of preserving the Collateral;
and (d) to establish, determine priority of, perfect, continue
perfected, preserve, enforce or terminate Secured Party's rights and
interests under this Agreement. Secured Party may charge its expenses
of doing so to any of the Obligations and Debtor shall pay them upon
demand with interest from the date incurred at the rate in effect on
the date incurred on the applicable Obligation.
6.5 Unauthorized Disposition and False Statements. Debtor understands that
the unauthorized disposition of Collateral or making a false statement
or report to Secured Party in connection with a loan could result in
civil and criminal consequences to Debtor (Federal Xxxxxxxx 00 X.X.X.
000, 0000).
6.6 Waiver. The failure or delay of Secured Party to enforce any right
shall not be construed as a waiver of the right. Secured Party's
waiver of any default shall not constitute a wavier of any prior or
subsequent default. Secured Party waives only those rights specified
in writing by Secured Party. The provisions of this Agreement shall
not be modified or waived by any course of dealing or trade usage.
SECURITY AGREEMENT (Page 3 of 3)
6.7 Secured Party Not Liable. Secured Party has no duty to exercise or to
withhold the exercise of any of the rights and powers expressly or
implicitly granted to it in this Agreement and shall not be
responsible for any failure to do so or delay in doing so. Secured
Party has no duty to protect, insure, or realize upon the Collateral.
Debtor releases Secured Party from all liability for any act or
omission relating to the Obligations, the Collateral or this Agreement
except Secured Party's willful misconduct.
6.8 Financing Statement. A carbon, photographic or other reproduction of
this Agreement or of a financing statement shall be sufficient as
financing statement.
6.9 Persons Bound. Each person signing this Agreement, other than the
Secured Party, is a Debtor. The Obligations of all Debtors are joint
and several, and all Debtors hereby acknowledge receipt of all
proceeds of the Loan. This Agreement benefits Secured Party, its
successors and assigns. This Agreement binds the Debtor, the Debtor's
heirs, person representatives, successors and assigns, and all persons
who become bound as a Debtor under this Agreement.
6.10 Agency. Until Secured Party is prospectively notified in writing by
Debtor to the contrary, Secured Party may rely upon the following: (a)
If Debtor is two or more individuals, the act or signatures of any one
of them shall bind them all; (b) If Debtor is a partnership, each
partner is fully authorized to act for the partnership in all matters
governed by this Agreement; (c) If Debtor is a corporation, each
officer is fully authorized individually to act for and bind the
corporation in all matters governed by this Agreement.
6.11 Cumulative Right. All rights and remedies of Secured Party in this
Agreement are cumulative and are in addition to other rights and
remedies given in this Agreement or in any evidence of or document
associated with the Obligations or provided by law.
6.12 Termination. This Agreement shall not be made null and void because at
any particular time there is no outstanding secured Obligation and no
commitment to lend money, if at the time the parties are contemplating
additional loans or advances. It shall continue in effect for all
Obligations to Secured Party arising prior to the filling of record of
a UCC Termination Statement covering all Collateral. Debtor
instructions Secured Party not to file a UCC Termination Statement
until requested by Debtor.
6.13 Interpretation. This Agreement shall be governed by the laws of the
state in which Secured Party's office originating the credit is
located. In this Agreement, "including" means "including but not
limited to" and indicates an illustrative incomplete listing.
6.14 Wisconsin Performance Deposit. If Debtor has and exercises a right to
redeem any Collateral under Section 425.208, Wisconsin Statutes, the
performance deposit tendered by Debtor shall no bear interest while
held by Secured Party.
6.15 Public Filings. The Debtor hereby authorizes the Secured Party to file
all financing statements describing the Collateral, and all amendments
thereto, in any offices as the Secured Party, in its sole discretion,
may determine. The Debtor hereby also authorizes the Secured Party to
file all effective financing statements describing the Collateral
pursuant to 7 U.S.C. Section 1631, and all amendments thereto, in any
offices as the Secured Party, in its sole discretion, may determine.
6.16 Government Program Payments. If the Collateral includes federal or
state government program entitlements or payments, the Debtor shall
execute and deliver to the Secured Party all assignments, transfers,
and other documents required by the Secured Party to transfer, convey
and assign to the Secured Party all such federal and state government
program entitlements, payments, right to payment whether or not earned
by performance, accounts, general intangibles, and benefits.
6.17 Uniform Commercial Code. All terms in this Agreement that are defined
in the Uniform Commercial Code, as enacted in the state in which the
Secured Party's office originating the Loan is located and as amended
from time to time ("UCC"), shall have the meanings set forth in the
UCC. The meaning of a term hereunder shall automatically change on the
effective date of each amendment to the definition of such term in the
UCC.
6.18 Debtor Name. For each Debtor that is not an individual, the legal name
of each such Debtor is as set forth in the Note or an addendum
thereto, or in this Agreement. No Debtor has used any trade name,
assumed name, or other name except those set forth in the Note or an
addendum thereto, or in this Agreement. The Debtor shall give the
Secured Party written notice at least 30 days before the date of (1)
any change in any Debtor's name or (2) any use by any Debtor of
another name.
6.19 Registered Organization. If any Debtor is a Registered Organization,
as that term is defined in the UCC, all information provided by such
Debtor to the Secured Party concerning the state of organization for
such Debtor is true, accurate, and complete. No Debtor shall change
its state or organization without the prior written consent of the
Secured Party. Debtor shall provide the Secured Party with written
notice at least 30 days before the date any Debtor takes any action to
change its state of organization.
6.20 Addresses of Debtor. If any Debtor is an individual or an entity that
is not a Registered Organization, all information provided by the
Debtor to the Secured Party concerning the address of an individual
Debtor's residence or the address of the chief executive officer of an
entity that is not a Registered Organization is true, accurate and
complete. No individual Debtor shall change that address of residence
without providing written notice to the Secured Party at least 30 days
before the effective date of such address change. No Debtor that is an
entity that is not a Registered Organization shall change that address
of the chief executive officer without providing written notice to the
Secured Party at least 30 days before the effective date of such
address change.
6.21 Purchase Money Security Interests. To the extent that the Debtor uses
proceeds of the Loans extended by the Secured Party to purchase
Collateral, Debtor's repayment of the Loan shall apply on a
"first-in-first-out" basis so that the portion of the Loan used to
purchase a particular item of the Collateral shall be paid in the
chronological order the Debtor purchased the Collateral.
6.22 Reporting. The Secured Party, its agents, successors and assigns may
report Debtor's names and information regarding this Loan and all of
Debtor's past and future loans to credit reporting agencies.
6.23 Authorization for Access to Information. Debtor acknowledges and
agrees that the verification or reverification of any information,
whether contained in the Debtor's loan application or in any other
manner supplied by the Debtor to the Secured Party in connection
therewith, may be made at any time by the Secured Party, its agents,
successors or assigns, either directly or through a credit reporting
agency, from any source whether named in the Debtor's loan application
or otherwise provided to the Secured Party by the Debtor.
Exhibit A
Attachment to: Exhibit to Security Agreement Description of Collateral - General
Dated: December 12, 2001
Debtor assigns, pledges and transfers to Secured Party as Collateral the
following property:
All of Debtor's interest, now owned or hereafter acquired, in Husker Ag
Processing, LLC. including without limitation, Debtor's member's interest
therein, and all distributions and proceeds of the foregoing.
All Debtor's rights to receive payments, direct or indirect, from the sale of
ethanol, distillers grains and other ethanol co-products.
All proceeds from Debtors rights to receive "holdback" payments from corn
delivery.
