SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNTHedge Agreement |
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Exhibit 10.3
Farm Credit Services of America
SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNT
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Debtors: Siouxland
Ethanol, LLC |
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Customer No.: 138039 |
WHEREAS, the undersigned,
Siouxland Ethanol, LLC hereinafter called “Debtor”, whose address
is Post Office Box 147, Jackson, NE 68743-0147, carries an account
(No. 29340) with FC Stone as Broker, hereinafter called the
“Broker”, whose address is Post Office Box 4887, Des Moines, Iowa
50306 for trading in commodities and contracts relating thereto;
WHEREAS, Debtor is now and/or
may hereafter become indebted to FARM CREDIT SERVICES OF AMERICA, PCA,
hereinafter called the “Secured Party”, whose address is 5015 South
118th Street, Omaha, NE 68137.
NOW, THEREFORE, it is agreed
by and between the parties hereto as follows:
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Secured Party
hereby may advance to Debtor certain sums of money for the purpose of hedging
Debtor’s inventory of certain commodities. Debtor agrees to deposit
said sums in an account with Broker (“Account”) and agrees to
employ said funds for the sole purpose of making hedging transactions to
protect Debtor’s commodity inventory and shall not employ said funds
for transactions of speculation or investment in commodities futures. |
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To secure
payment and performance of Debtor’s obligations to Secured Party, and
for the payment of all monies which Secured Party may hereafter loan or
advance to Debtor, Debtor hereby grants a security interest in and assigns
and transfers to Secured Party all funds which may hereafter accumulate or
become withdrawable from, or paid out of the Account, including any balance
which may remain to the credit of the Account upon the closing thereof;
subject, however, to the prior payment of all indebtedness of Debtor to
Broker, as such may exist from time to time, including fees and commissions,
which may have been incurred in connection with Debtor’s transactions
with Broker, and to Broker’s lien, and the right of foreclosure thereof
in connection with the indebtedness of Debtor to Broker (including, but not
limited to, any right of Broker to close out open positions without prior
demand for additional margin and without prior notice). |
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As additional
security for the obligations of Debtor to Secured Party, and for the payment
of all monies which Secured Party may hereafter loan or advance to Debtor,
Debtor hereby grants to Secured Party a continuing security interest in and
to all commodities futures contracts which Broker transacts for Debtor and
all proceeds thereof; subject, however, to the prior payment of all
indebtedness of Debtor to Broker, as such may exist from time to time,
including fees and commissions, which may have been incurred in connection
with Debtor’s transactions with Broker, and to Broker’s lien, and
the right of foreclosure thereof in connection with any indebtedness of
Debtor to Broker (including, but not limited to, any right of Broker to close
out open positions without prior demand for additional margin and without
prior notice). Debtor shall execute and deliver to Secured Party all
financing statements and other documents as Secured Party may reasonably
request, in a form satisfactory to Secured Party to perfect and maintain
perfected the security interests granted and assignments made by Debtor to
Secured Party in this Agreement. |
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4. |
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Broker is
hereby authorized and directed to pay to Secured Party upon Secured
Party’s demand all funds that may hereafter be withdrawable or payable
out of the Account, and Debtor agrees that Debtor will not withdraw or
attempt to withdraw any funds or other property from the Account except as
permitted by this Agreement. Secured Party is hereby authorized and fully
empowered without further authority from Debtor to request Broker to remit to
Secured Party any funds that may be due to Debtor, and Broker is hereby
authorized and directed to pay to Secured Party such sums as Secured Party
shall so request or demand without the consent of or notice to Debtor. |
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If at any time
during the continuance of any such contract or contracts, Broker requires
additional funds in order to protect such contract or contracts, Secured
Party may, at Secured Party’s sole and exclusive discretion, pay to
Broker on behalf of Debtor such amounts as may be required to protect such
contracts; provided, however, that Debtor shall in all respects remain liable
to Secured Party for any amounts so advanced pursuant to the terms of any
agreement entered into between Secured Party and Debtor in connection with
the transactions covered by this Agreement. |
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Debtor hereby
constitutes and appoints Secured Party Debtor’s true, lawful and
irrevocable attorney to demand, receive and enforce payments and to give
receipts, releases, satisfactions for, and to sue for all monies payable to
Debtor, and this may be done in the name of Secured Party with the same force
and effect as Debtor could do had this Agreement not been made. Any and all
monies or payments which may be received by Debtor to which Secured Party is
entitled under and by reason of the Agreement, will be received by Debtor as
trustee for Secured Party, and will be immediately delivered in kind to
Secured Party without commingling. |
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Nothing herein
contained shall be construed so as to prevent Debtor from remaining the
owner, subject to the interest of Secured Party of the Account with Broker.
Until Secured Party elects to the contrary and delivers notice of such
election in writing to Broker, Debtor may make such additional transactions
in the Account with Broker as Broker shall be willing to accept for
execution. In the event Secured Party does make such election and does
deliver notice to Broker, Debtor shall not thereafter execute any
transactions in the Account and Broker shall not accept for execution any
such transactions without the concurrence of Secured Party except
transactions in liquidation of any then outstanding commodity or futures
positions. |
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