Exhibit 10.6

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the “Agreement”) dated as of December 29, 2015, is
between ABE SOUTH DAKOTA, LLC, a Delaware limited liability company
(“Borrower”), and AGCOUNTRY FARM CREDIT SERVICES, PCA (“Lender”).

RECITALS:

WHEREAS, Borrower has entered into a Master Credit Agreement dated as of the
date hereof (as amended, restated, supplemented or otherwise modified and in
effect from time to time, the “Credit Agreement”) with Lender, pursuant to which
Lender, subject to the terms and conditions contained therein, will and may make
loans and other credit accommodations to Borrower; and

WHEREAS, it is a condition precedent to Lender’s making such loans and
accommodations to Borrower under the Credit Agreement that Borrower execute and
deliver to Lender a security agreement in substantially the form hereof,
granting to Lender a lien and security interest in all of Borrower’s personal
property; and

WHEREAS, Borrower wishes to grant such security interests to the Lender as
herein provided.

AGREEMENT:

In consideration of the promises herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Lender agree as follows:

1. Definitions. All capitalized terms which are not defined herein have the
meanings provided for in the Credit Agreement. The term “State” as used herein
means the State of North Dakota. All terms defined in Article 9 of the Uniform
Commercial Code of the State and used herein shall have the same meanings as
specified therein. The term “Event of Default” as used herein means any Event of
Default described or listed in the Credit Agreement, including the failure of
Borrower to pay or perform any of the Obligations within the applicable cure
period after such Obligations are due to be paid or performed.

2. Grant of Security Interest. Borrower hereby grants to Lender, to secure the
payment and performance in full of all of the Obligations, a security interest
in, and pledges and collaterally assigns to Lender, the following properties,
assets and rights of Borrower, wherever located, whether now owned or hereafter
acquired or arising, and all proceeds (including casualty insurance proceeds)
and products thereof (all of the same being hereinafter called the
“Collateral”): all personal and fixture property of every kind and nature
including without limitation all goods (including inventory, equipment and any
accessions thereto), instruments (including notes), documents, accounts
(including health-care-insurance receivables), chattel paper (whether tangible
or electronic), deposit accounts, letter-of-credit rights (whether or not the
letter of credit is evidenced by a writing), commercial tort claims, securities
and all other investment property, supporting obligations, any other contract
rights or rights to the payment of money (including without limitation all
United States Department of Agriculture payments and

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Commodity Credit Corporation payments such as payments related to the bioenergy
program described at 7 C.F.R. Part 1424), including without limitation all
Material Contracts, insurance claims and proceeds, tort claims, and all general
intangibles including, without limitation, all payment intangibles, patents,
patent applications, trademarks, trademark applications, trade names,
copyrights, copyright applications, software, engineering drawings, service
marks, customer lists, goodwill, and all licenses, permits, agreements of any
kind or nature pursuant to which Borrower possesses, uses or has authority to
possess or use property (whether tangible or intangible) of others or others
possess, use or have authority to possess or use property (whether tangible or
intangible) of Borrower, and all recorded data of any kind or nature, regardless
of the medium of recording including, without limitation, all software,
writings, plans, specifications and schematics. Notwithstanding the foregoing,
the Collateral shall not include any Excluded Property. Lender acknowledges that
the attachment of its security interest in any commercial tort claim as original
collateral is subject to Borrower’s compliance with Section 4.07.

“Excluded Property” means (i) any permit, license, agreement or asset subject to
any such agreement to the extent that the grant of a security interest therein
is prohibited by any law or constitutes a breach of, grounds for termination of,
or a default under, such permit, license or agreement (other than to the extent
that such terms would be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the UCC of any applicable jurisdiction or by any other
applicable law or principles of equity), (ii) property owned by the Borrower
that is subject to a purchase money Lien or a capital lease permitted under the
Credit Agreement if the agreement pursuant to which such Lien is granted (or
providing for such capital lease) prohibits or requires the consent of any
Person other than the Borrower which has not been obtained as a condition to the
creation of any other Lien on such property, and (iii) any “intent to use”
Trademark applications for which a statement of use has not been filed (but only
until such statement is filed); provided, however, the term “Excluded Property”
shall not include any proceeds, products, substitutions or replacements of
Excluded Property (unless such proceeds, products, substitutions or replacements
would otherwise constitute Excluded Property); provided, further, the exclusions
set forth in the preceding clauses (i) and (ii) shall not apply if such
prohibition has been waived or such applicable Person authorized to grant any
such permit or license, or such Person party to any such license or agreement,
as applicable, has otherwise consented to the creation hereunder of a security
interest in such Excluded Property. In addition, with respect to clauses (i) and
(ii) above, immediately upon the ineffectiveness, lapse or termination of the
provisions of such agreements or laws which prohibit or require the consent of
any Person as a condition to the creation or grant by the Borrower of a security
interest or Lien thereon or that would be breached or give the other party the
right to terminate it as a result thereof, the Borrower shall be deemed to have
granted a security interest in, and all of its rights, titles and interests in
and to, such Excluded Property.

3. Authorization to File Financing Statements. Borrower hereby irrevocably
authorizes Lender at any time and from time to time to file in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Collateral (i) as all assets of Borrower or words
of similar effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the Uniform Commercial Code of
the State or such jurisdiction, or (ii) as being of an equal or lesser scope or
with greater detail, and (b) contain any other information required by Article 9
of the Uniform Commercial Code of the State or any other state for the
sufficiency or filing office acceptance of

 

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any financing statement or amendment, including (i) whether Borrower is an
organization, the type of organization and any organization identification
number issued to Borrower and, (ii) in the case of a financing statement filed
as a fixture filing or indicating Collateral as as-extracted collateral or
timber to be cut, a sufficient description of real property to which the
Collateral relates. Borrower agrees to furnish any such information to Lender
promptly upon request. Borrower also ratifies its authorization for Lender to
have filed in any Uniform Commercial Code jurisdiction any like initial
financing statements or amendments thereto if filed prior to the date hereof.

4. Other Actions. Further to insure the attachment, perfection and first
priority of, and the ability of Lender to enforce, Lender’s security interest in
the Collateral, Borrower agrees, in each case at Borrower’s own expense, to take
the following actions with respect to the following Collateral:

4.01 Notes and Tangible Chattel Paper. If Borrower at any time holds or acquires
any notes or tangible chattel paper, Borrower will forthwith endorse, assign and
deliver the same to Lender, accompanied by such instruments of transfer or
assignment duly executed in blank as Lender may from time to time specify.

4.02 Deposit Accounts. For each deposit account that Borrower at any time opens
or maintains, Borrower will, at Lender’s request and option, pursuant to an
agreement in form and substance satisfactory to Lender, cause the depositary
bank to agree to comply at any time with instructions from Lender to such
depositary bank directing the disposition of funds from time to time credited to
such deposit account, without further consent of Borrower. The provisions of
this paragraph do not apply to any deposit account for which Borrower, the
depositary bank and Lender have entered into a cash collateral agreement
specially negotiated among Borrower, the depositary bank and Lender for the
specific purpose set forth therein.

4.03 Investment Property. If Borrower at any time holds or acquires any
certificated securities, Borrower will forthwith endorse, assign and deliver the
same to Lender, accompanied by such instruments of transfer or assignment duly
executed in blank as Lender may from time to time specify. If any securities now
or hereafter acquired by Borrower are uncertificated and are issued to Borrower
or its nominee directly by the issuer thereof, Borrower will immediately notify
Lender thereof and, at Lender’s request and option, pursuant to an agreement in
form and substance satisfactory to Lender, cause the issuer to agree to comply
with instructions from Lender as to such securities, without further consent of
Borrower or such nominee. If any securities, whether certificated or
uncertificated, or other investment property now or hereafter acquired by
Borrower are held by Borrower or its nominee through a securities intermediary
or commodity intermediary, Borrower will immediately notify Lender thereof and,
at Lender’s request and option, pursuant to an agreement in form and substance
satisfactory to Lender, cause such securities intermediary or (as the case may
be) commodity intermediary to agree to comply with entitlement orders or other
instructions from Lender to such securities intermediary as to such securities
or other investment property, or (as the case may be) to apply any value
distributed on account of any commodity contract as directed by Lender to such
commodity intermediary, in each

 

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case without further consent of Borrower or such nominee The provisions of this
paragraph shall not apply to any financial assets credited to a securities
account for which Lender is the securities intermediary.

4.04 Collateral in the Possession of a Bailee. If any goods are at any time in
the possession of a bailee, Borrower will promptly notify Lender thereof and, if
requested by Lender, will promptly obtain an acknowledgment from the bailee, in
form and substance satisfactory to Lender, that the bailee holds such Collateral
for the benefit of Lender and will act upon the instructions of Lender, without
the further consent of Borrower.

4.05 Electronic Chattel Paper and Transferable Records. If Borrower at any time
holds or acquires an interest in any electronic chattel paper or any
“transferable record,” as that term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, Borrower will promptly notify Lender thereof and, at the request
of Lender, will take such action as Lender may reasonably request to vest
control in Lender, under Section 9-105 of the Uniform Commercial Code, of such
electronic chattel paper or control under Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act or, as the case may be,
Section 16 of the Uniform Electronic Transactions Act, as so in effect in such
jurisdiction, of such transferable record. Lender agrees with Borrower that
Lender will arrange, pursuant to procedures satisfactory to Lender and so long
as such procedures will not result in Lender’s loss of control, for Borrower to
make alterations to the electronic chattel paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to make
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by Borrower with
respect to such electronic chattel paper or transferable record.

4.06 Letter-of-Credit Rights. If Borrower is at any time a beneficiary under a
letter of credit now or hereafter issued in favor of Borrower, Borrower will
promptly notify Lender thereof and, at the request and option of Lender,
Borrower will, pursuant to an agreement in form and substance satisfactory to
Lender, either (i) arrange for the issuer and any confirmer of such letter of
credit to consent to an assignment to Lender of the proceeds of any drawing
under the letter of credit or (ii) arrange for Lender to become the transferee
beneficiary of the letter of credit.

4.07 Commercial Tort Claims. If Borrower at any time holds or acquires a
commercial tort claim not listed on Schedule 8(d), Borrower will immediately
notify Lender in a writing signed by Borrower of the brief details thereof and
grant to Lender in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance satisfactory to Lender.

4.08 Other Actions as to any and all Collateral. Borrower further agrees to take
any other action reasonably requested by Lender to insure the attachment,
perfection

 

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and first priority of, and the ability of Lender to enforce, Lender’s security
interest in any and all of the Collateral including, without limitation,
(a) executing, delivering and, where appropriate, filing financing statements
and amendments relating thereto under the Uniform Commercial Code, (b) causing
Lender’s name to be noted as secured party on any certificate of title for a
titled good if such notation is a condition to attachment, perfection or
priority of, or ability of Lender to enforce, Lender’s security interest in such
Collateral, (c) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
Lender to enforce, Lender’s security interest in such Collateral, (d) obtaining
governmental and other third party consents and approvals, including without
limitation any consent of any licensor, lessor or other person obligated on
Collateral, (e) obtaining waivers from mortgagees and landlords in form and
substance satisfactory to Lender and (f) taking all actions required by any
earlier versions of the Uniform Commercial Code or by other law, as applicable
in any relevant Uniform Commercial Code jurisdiction, or by other law as
applicable in any foreign jurisdiction.

5. Relation to Other Security Documents. The provisions of this Agreement
supplement the provisions of any real estate mortgage or deed of trust granted
by Borrower to Lender and securing the payment or performance of any of the
Obligations. Nothing contained in any such real estate mortgage or deed of trust
derogates from any of the rights or remedies of Lender hereunder.

6. Representations and Warranties Concerning Borrower’s Legal Status. Borrower
represents and warrants to Lender as follows: (a) Borrower’s exact legal name is
that indicated on the signature page hereof, (b) Borrower is a limited liability
company organized under the laws of the State of Delaware, (c) Borrower’s
organizational identification number is 2272531, (d) Borrower’s federal taxpayer
identification number is 46-0417659 and (e) Borrower’s place of business, chief
executive office, as well as mailing address is 8000 Norman Center Drive, Suite
610, Bloomington, MN 55437. Borrower hereby certifies that the Taxpayer
Identification Number shown in this Section 6 is correct and that Borrower is
not subject to backup withholding either because it is exempt, has not been
notified that it is subject to backup withholding due to failure of reporting
interest or dividends, or the Internal Revenue Service has notified it that it
is no longer subject to backup withholding. Borrower is a U.S. person (including
U.S. resident alien).

7. Covenants Concerning Borrower’s Legal Status. Borrower covenants with Lender
as follows: (a) without providing at least 30 days prior written notice to
Lender, Borrower will not change its name, its place of business or, if more
than one, chief executive office, or its mailing address or organizational
identification number if it has one, (b) if Borrower does not have an
organizational identification number and later obtains one, Borrower will
forthwith notify Lender of such organizational identification number, and
(c) Borrower will not change its type of organization, jurisdiction of
organization or other legal structure.

8. Representations and Warranties Concerning Collateral, Etc. Borrower further
represents and warrants to Lender as follows: (a) Borrower is the owner of the
Collateral, free from any adverse lien, security interest or other encumbrance,
except for the security interest created by this Agreement and other liens
permitted by the Credit Agreement, (b) to the extent

 

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that any of the Collateral constitutes, or is the proceeds of, “farm products”
as defined in Section 9-102(a)(34) of the Uniform Commercial Code of the State
or any other relevant state, Borrower has taken all required acts to ensure that
Lender’s security interest in such Collateral is first and prior, (c) none of
the account debtors or other persons obligated on any of the Collateral at the
date hereof is a governmental authority subject to the Federal Assignment of
Claims Act or like federal, state or local statute or rule in respect of such
Collateral, (d) Borrower holds no commercial tort claim except as set forth on
Schedule 8(d), or if not held on the date hereof, of which Borrower has given
notice to Lender under Section 4.07, and (e) Borrower has at all times operated
its business in compliance with all applicable provisions of the federal Fair
Labor Standards Act, as amended, and with all applicable provisions of federal,
state and local statutes and ordinances dealing with the control, shipment,
storage or disposal of hazardous materials or substances.

9. Covenants Concerning Collateral, Etc. Borrower further covenants with Lender
as follows: (a) to the extent not delivered to Lender pursuant to Section 4 and
subject to Section 9(h) below, any tangible Collateral will be kept at the
address of Real Estate which is subject to the Mortgage, and all other
Collateral will be kept at Borrower’s chief executive office located at the
address provided in Section 6(d) hereof, and Borrower will not remove the
Collateral from such locations, without providing at least 30 days prior written
notice to Lender, (b) except for the security interest herein granted and liens
permitted by the Credit Agreement, Borrower will be the owner of the Collateral
free from any lien, security interest or other encumbrance, and Borrower will
defend the same against all claims and demands of all persons at any time
claiming the same or any interests therein adverse to Lender, (c) Borrower will
not pledge, mortgage or create, or suffer to exist a security interest in the
Collateral in favor of any person other than Lender except for liens permitted
by the Credit Agreement, (d) Borrower will keep the Collateral in good order and
repair, normal wear and tear excepted, and will not use the same in violation of
law or any policy of insurance thereon, (e) Borrower will permit Lender, or its
designee, to inspect the Collateral at any reasonable time, wherever located,
(f) Borrower will pay promptly when due all taxes, assessments, governmental
charges and levies upon the Collateral or incurred in connection with the use or
operation of such Collateral or incurred in connection with this Agreement,
(g) Borrower will operate its business in compliance with all applicable
provisions of the federal Fair Labor Standards Act, as amended, and with all
applicable provisions of federal, state and local statutes and ordinances
dealing with the control, shipment, storage or disposal of hazardous materials
or substances, and (h) Borrower will not sell or otherwise dispose, or offer to
sell or otherwise dispose, of the Collateral or any interest therein except for
(i) sales in the ordinary course of business of Borrower and (ii) sales or other
dispositions of obsolescent items of equipment and other goods in the ordinary
course of business consistent with past practices and permitted by the Credit
Agreement.

10. Insurance.

10.01 Maintenance of Insurance. Borrower will maintain with financially sound
and reputable insurers insurance with respect to its properties and business
against such casualties and contingencies as shall be in accordance with general
practices of businesses engaged in similar activities in similar geographic
areas. Such insurance shall be in such minimum amounts that Borrower will not be
deemed a co-insurer under applicable insurance laws, regulations and policies
and otherwise shall be in such

 

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amounts, contain such terms, be in such forms and be for such periods as may be
reasonably satisfactory to Lender. In addition, all such insurance shall be
payable to Lender as loss payee under a standard loss payee clause. Without
limiting the foregoing, Borrower will (i) keep all of its physical property
insured with casualty or physical hazard insurance on an “all risks” basis, with
electronic data processing coverage, with a full replacement cost endorsement
and in an amount equal to 100% of the full replacement cost of such property,
(ii) maintain all such workers’ compensation or similar insurance as may be
required by law and (iii) maintain, in amounts and with deductibles equal to
those generally maintained by businesses engaged in similar activities in
similar geographic areas, general public liability insurance against claims of
bodily injury, death or property damage occurring, on, in or about the
properties of Borrower; business interruption insurance; and product liability
insurance.

10.02 Insurance Proceeds. The proceeds of any casualty insurance in respect of
any casualty loss of any of the Collateral shall, subject to the rights, if any,
of other parties with a prior interest in the property covered thereby, (i) so
long as no Default or Event of Default has occurred and is continuing and to the
extent that the amount of such proceeds is less than $1,000,000, be disbursed to
Borrower for direct application by Borrower solely to the repair or replacement
of Borrower’s property so damaged or destroyed and (ii) in all other
circumstances, be held by Lender as cash collateral for the Obligations. Lender
may, at its sole option, disburse from time to time all or any part of such
proceeds so held as cash collateral, upon such terms and conditions as Lender
may reasonably prescribe, for direct application by Borrower solely to the
repair or replacement of Borrower’s property so damaged or destroyed, or Lender
may apply all or any part of such proceeds to the Obligations with the
Commitments (if not then terminated) being reduced by the amount so applied to
the Obligations.

10.03 Notice of Cancellation, etc. All policies of insurance will provide for at
least 30 days prior written cancellation notice to Lender. In the event of
failure by Borrower to provide and maintain insurance as herein provided, Lender
may, at its option, provide such insurance and charge the amount thereof to
Borrower. Borrower will furnish Lender with certificates of insurance and copies
policies evidencing compliance with the foregoing insurance provision.

11. Collateral Protection Expenses; Preservation of Collateral.

11.01 Expenses Incurred by Lender. In its discretion, Lender may discharge taxes
and other encumbrances at any time levied or placed on any of the Collateral,
make repairs thereto and pay any necessary filing fees or, if the debtor fails
to do so, insurance premiums. Borrower agrees to reimburse Lender on demand for
any and all expenditures so made. Lender has no obligation to Borrower to make
any such expenditures, and the making thereof will not relieve Borrower of any
default.

11.02 Lender’s Obligations and Duties. Anything herein to the contrary
notwithstanding, Borrower will remain liable under each contract or agreement
comprised in the Collateral to be observed or performed by Borrower thereunder.
Lender shall not have any obligation or liability under any such contract or
agreement by reason

 

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of or arising out of this Agreement or the receipt by Lender of any payment
relating to any of the Collateral, nor shall Lender be obligated in any manner
to perform any of the obligations of Borrower under or pursuant to any such
contract or agreement, to make inquiry as to the nature or sufficiency of any
payment received by Lender in respect of the Collateral or as to the sufficiency
of any performance by any party under any such contract or agreement, to present
or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to Lender or to which
Lender may be entitled at any time or times. Lender’s sole duty with respect to
the custody, safe keeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Uniform Commercial Code of the State or
otherwise, is to deal with such Collateral in the same manner as Lender deals
with similar property for its own account.

12. Securities and Deposits. Lender may at any time at its option, transfer to
itself or any nominee, for Collateral purposes, any securities constituting
Collateral, receive any income thereon and if an Event of Default has occurred
and is continuing, hold such income as additional Collateral or apply it to the
Obligations. Whether or not any Obligations are due, Lender may demand, sue for,
collect, or make any settlement or compromise which it deems desirable with
respect to the Collateral. Regardless of the adequacy of Collateral or any other
security for the Obligations, any deposits or other sums at any time credited by
or due from Lender to Borrower may at any time be applied to or set off against
any of the Obligations then due and owing.

13. Notification to Account Debtors and Other Persons Obligated on Collateral.
If an Event of Default has occurred and is continuing, Borrower will, at the
request of Lender, notify account debtors and other persons obligated on any of
the Collateral of the security interest of Lender in any account, chattel paper,
general intangible, instrument or other Collateral and that payment thereof is
to be made directly to Lender or to any financial institution designated by
Lender as Lender’s agent therefor, and Lender may itself, if an Event of Default
has occurred and is continuing, without notice to or demand upon Borrower, so
notify account debtors and other persons obligated on Collateral. After the
making of such a request or the giving of any such notification, Borrower will
hold any proceeds of collection of accounts, chattel paper, general intangibles,
instruments and other Collateral received by Borrower as trustee for Lender
without commingling the same with other funds of Borrower and will turn the same
over to Lender in the identical form received, together with any necessary
endorsements or assignments. Lender will apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral
received by Lender to the Obligations, such proceeds to be immediately entered
after final payment in cash or other immediately available funds of the items
giving rise to them.

14. Power of Attorney.

14.01 Appointment and Powers of Lender. Borrower hereby irrevocably constitutes
and appoints Lender and any officer or agent thereof, with full power of
substitution, as its true and lawful attorneys-in-fact with full irrevocable
power and authority in the place and stead of Borrower or in Lender’s own name,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to

 

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execute any and all documents and instruments that may be necessary or desirable
to accomplish the purposes of this Agreement; provided, however, the Lender will
not exercise any of the aforementioned rights unless a Default has occurred and
is continuing. Without limiting the generality of the foregoing, hereby gives
said attorneys the power and right, on behalf of Borrower, without notice to or
assent by Borrower, to do the following:

(a) upon the occurrence and during the continuance of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral in such manner as is consistent with
the Uniform Commercial Code of the State and as fully and completely as though
Lender were the absolute owner thereof for all purposes, and to do at Borrower’s
expense, at any time, or from time to time, all acts and things which Lender
deems necessary to protect, preserve or realize upon the Collateral and Lender’s
security interest therein, in order to effect the intent of this Agreement, all
as fully and effectively as Borrower might do, including, without limitation,
(i) the filing and prosecuting of registration and transfer applications with
the appropriate federal or local agencies or authorities with respect to
trademarks, copyrights and patentable inventions and processes, (ii) upon
written notice to Borrower, the exercise of voting rights with respect to voting
securities, which rights may be exercised, if Lender so elects, with a view to
causing the liquidation in a commercially reasonable manner of assets of the
issuer of any such securities and (iii) the execution, delivery and recording,
in connection with any sale or other disposition of any Collateral, of the
endorsements, assignments or other instruments of conveyance or transfer with
respect to such Collateral; and

(b) to the extent that Borrower’s authorization given in Section 3 is not
sufficient, to file such financing statements with respect hereto, with or
without Borrower’s signature, or a photocopy of this Agreement in substitution
for a financing statement, as Lender may deem appropriate and to execute and/or
file in Borrower’s name such financing statements and amendments thereto and
continuation statements which may require Borrower’s signature.

14.02 Ratification by Borrower. To the extent permitted by law, Borrower hereby
ratifies all that said attorneys lawfully do or cause to be done by virtue of
this Agreement. This power of attorney is a power coupled with an interest and
is irrevocable.

14.03 No Duty on Lender. The powers conferred on Lender hereunder are solely to
protect its interests in the Collateral and do not impose any duty upon it to
exercise any such powers. Lender will be accountable only for the amounts that
it actually receives as a result of the exercise of such powers and neither it
nor any of its officers, directors, employees or agents shall be responsible to
Borrower for any act or failure to act, except for Lender’s own gross negligence
or willful misconduct.

15. Remedies. If an Event of Default has occurred and is continuing, Lender may,
without notice to or demand upon Borrower, declare this Agreement to be in
default, and Lender shall thereafter have in any jurisdiction in which
enforcement hereof is sought, in addition to all

 

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other rights and remedies, the rights and remedies of a secured party under the
Uniform Commercial Code of the State or of any jurisdiction in which Collateral
is located, including, without limitation, the right to take possession of the
Collateral, and for that purpose Lender may, so far as Borrower can give
authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom. Lender may in its discretion require
Borrower to assemble all or any part of the Collateral at such location or
locations within the jurisdictions of Borrower’s principal office(s) or at such
other locations as Lender may reasonably designate. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, Lender will give to Borrower at least 10 Business
Days prior written notice of the time and place of any public sale of Collateral
or of the time after which any private sale or any other intended disposition is
to be made. Borrower hereby acknowledges that 10 Business Days prior written
notice of such sale or sales is reasonable notice. In addition, Borrower waives
any and all rights that it may have to a judicial hearing in advance of the
enforcement of any of Lender’s rights hereunder, including, without limitation,
its right following an Event of Default to take immediate possession of the
Collateral and to exercise its rights with respect thereto.

16. Standards for Exercising Remedies. To the extent that applicable law imposes
duties on Lender to exercise remedies in a commercially reasonable manner,
Borrower acknowledges and agrees that it is not commercially unreasonable for
Lender (a) to fail to incur expenses reasonably deemed significant by Lender to
prepare Collateral for disposition or otherwise to complete raw material or work
in process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to
remove liens or encumbrances on or any adverse claims against Collateral, (d) to
exercise collection remedies against account debtors and other persons obligated
on Collateral directly or through the use of collection agencies and other
collection specialists, (e) to advertise dispositions of Collateral through
publications or media of general circulation, whether or not the Collateral is
of a specialized nature, (f) to contact other persons, whether or not in the
same business as Borrower, for expressions of interest in acquiring all or any
portion of the Collateral, (g) to hire one or more professional auctioneers to
assist in the disposition of Collateral, whether or not the collateral is of a
specialized nature, (h) to dispose of Collateral by utilizing internet sites
that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and
sellers of assets, (i) to dispose of assets in wholesale rather than retail
markets, (j) to disclaim disposition warranties, (k) to purchase insurance or
credit enhancements to insure Lender against risks of loss, collection or
disposition of Collateral or to provide to Lender a guaranteed return from the
collection or disposition of Collateral, or (l) to the extent deemed appropriate
by Lender, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Lender in the collection or
disposition of any of the Collateral. Borrower acknowledges that the purpose of
this Section 16 is to provide non-exhaustive indications of what actions or
omissions by Lender would not be commercially unreasonable in Lender’s exercise
of remedies against the Collateral and that other actions or omissions by Lender
shall not be deemed commercially unreasonable solely on account of not being
indicated in this Section 16. Without limitation upon the foregoing, nothing
contained in this Section 16 shall be construed to grant any rights to Borrower
or to impose any duties on Lender that would not have been granted or imposed by
this Agreement or by applicable law in the absence of this Section 16.

 

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17. No Waiver by Lender, etc. Lender shall not be deemed to have waived any of
its rights upon or under the Obligations or the Collateral unless such waiver
shall be in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver on any one occasion will not be construed as a bar to or
waiver of any right on any future occasion. All rights and remedies of Lender
with respect to the Obligations or the Collateral, whether evidenced hereby or
by any other instrument or papers, will be cumulative and may be exercised
singularly, alternatively, successively or concurrently at such time or at such
times as Lender deems expedient.

18. Suretyship Waivers by Borrower. Borrower waives demand, notice, protest,
notice of acceptance of this Agreement, notice of loans made, credit extended,
Collateral received or delivered or other action taken in reliance hereon and
all other demands and notices of any description. With respect to both the
Obligations and the Collateral, Borrower assents to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of or failure to perfect any security interest
in any Collateral, to the addition or release of any party or person primarily
or secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising or adjusting of any thereof, all in such manner and at
such time or times as Lender may deem advisable. Lender will have no duty as to
the collection or protection of the Collateral or any income thereon, nor as to
the preservation of rights against prior parties, nor as to the preservation of
any rights pertaining thereto beyond the safe custody thereof as set forth in
Section 11.02. Borrower further waives any and all other suretyship defenses.

19. Marshaling. Lender will not be required to marshal any present or future
collateral security (including but not limited to this Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order, and all of its rights hereunder and in respect of such
collateral security and other assurances of payment are cumulative and in
addition to all other rights, however existing or arising. To the extent that it
lawfully may, Borrower hereby agrees that it will not invoke any law relating to
the marshalling of collateral which might cause delay in or impede the
enforcement of Lender’s rights under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of
the Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
Borrower hereby irrevocably waives the benefits of all such laws.

20. Proceeds of Dispositions; Expenses. Borrower will pay to Lender on demand
any and all expenses, including reasonable attorneys’ fees and disbursements,
incurred or paid by Lender in protecting, preserving or enforcing Lender’s
rights under or in respect of any of the Obligations or any of the Collateral.
After deducting all of said expenses, the residue of any proceeds of collection
or sale of the Obligations or Collateral shall, to the extent actually received
in cash, be applied to the payment of the Obligations in such order or
preference as Lender may determine, proper allowance and provision being made
for any Obligations not then due. Upon the final payment and satisfaction in
full of all of the Obligations and after making

 

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any payments required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the Uniform
Commercial Code of the State, any excess shall be returned to Borrower, and
Borrower shall remain liable for any deficiency in the payment of the
Obligations.

21. Overdue Amounts. Until paid, all amounts due and payable by Borrower
hereunder are a debt secured by the Collateral and shall bear, whether before or
after judgment, interest at the rate of interest for overdue principal set forth
in the Credit Agreement.

22. Governing Law; Consent to Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE. Borrower agrees that
any suit for the enforcement of this Agreement may be brought in the courts of
the State of North Dakota or any federal court sitting therein and consents to
the non-exclusive jurisdiction of such court. Borrower hereby waives any
objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.

23. Waiver of Jury Trial. THE PARTIES WAIVE THEIR RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY
SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, Borrower waives any
right which it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. Borrower
(i) certifies that neither Lender nor any representative, agent or attorney of
Lender has represented, expressly or otherwise, that Lender would not, in the
event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges
that, in entering into the Credit Agreement and the other loan documents to
which Lender is a party, Lender is relying upon, among other things, the waivers
and certifications contained in this Section 23.

24. Miscellaneous. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder are binding upon Borrower and
its respective successors and assigns, and will inure to the benefit of Lender
and its successors and assigns. If any term of this Agreement is held to be
invalid, illegal or unenforceable, the validity of all other terms hereof shall
in no way be affected thereby, and this Agreement shall be construed and be
enforceable as if such invalid, illegal or unenforceable term had not been
included herein. Borrower acknowledges receipt of a copy of this Agreement.

25. Counterparts. This document may be executed in two or more counterparts,
each of which will be deemed an original for all purposes, and together will
constitute one and the same document. A facsimile copy of a signature shall be
as binding as an original signature.

SIGNATURE PAGE FOLLOWS

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

BORROWER: ABE SOUTH DAKOTA, LLC By:  

/s/ Richard R. Peterson

Name:   Richard R. Peterson Title:   President and Chief Executive Officer
LENDER: AGCOUNTRY FARM CREDIT SERVICES, PCA By:  

/s/ Randolph L. Aberle

Name:   Randolph L. Aberle Title:   Senior Vice President

SIGNATURE PAGE TO SECURITY AGREEMENT