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SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNT

Hedge Agreement

SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNT 

 
  
  
  
  
 
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This Hedge Agreement involves

SIOUXLAND ETHANOL, LLC

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Title: SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNT
Date: 2/14/2007

SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNT 

 
  
  
  
  
 
, Parties: siouxland ethanol  llc
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Exhibit 10.3

Farm Credit Services of America

SECURITY AGREEMENT AND ASSIGNMENT OF HEDGING ACCOUNT

 

 

 

 

 

Debtors: Siouxland Ethanol, LLC

 

 

 

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 118 th Street, Omaha, NE 68137.

NOW, THEREFORE, it is agreed by and between the parties hereto as follows:

1.

 

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.

2.

 

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).

 

3.

 

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.

4.

 

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


 
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