Exhibit 10.3


 


AMENDED AND
RESTATED SECURITY AGREEMENT


 


THIS AMENDED AND RESTATED SECURITY AGREEMENT
is dated as of July 12, 2005, between GREAT PLAINS ETHANOL, LLC, a South
Dakota limited liability company (“Borrower”), and AGCOUNTRY FARM CREDIT
SERVICES, FLCA (“Lender”).


 


WHEREAS, Borrower
and Lender entered into a Credit Agreement dated as of June 19, 2002,
pursuant to which Lender, subject to the terms and conditions contained
therein, made loans to Borrower; and


 


WHEREAS, as a
condition precedent to Lender’s making any loans to Borrower under the Credit
Agreement dated June 19, 2002, that Borrower execute and deliver to Lender
a security agreement; and


 


WHEREAS, Borrower
granted security interests in favor of Lender pursuant to the terms of a
Security Agreement dated June 19, 2002; and


 


WHEREAS, Borrower
has entered into an Amended and Restated Credit Agreement dated as of the date
hereof (as amended and in effect from time to time, the “Credit Agreement”)
with Lender, pursuant to which Lender, subject to the terms and conditions
contained therein, is to make additional loans and accommodations to Borrower;
and


 


WHEREAS, it is a
condition precedent to Lender’s making such additional loans and accommodations
to Borrower under the Credit Agreement that Borrower execute and deliver to
Lender a security agreement in substantially the form hereof; and


 


WHEREAS, Borrower
wishes to grant security interests in favor of Lender as herein provided.


 


NOW, THEREFORE, in
consideration of the promises contained 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 shall have the respective 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 as and when due to be paid or performed under the terms of the
Credit Agreement.


 





















 


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 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 Commodity Credit Corporation payments
such as payments related to the bioenergy program described at 7 C.F.R. Part 1424),
including without limitation all management contracts, supply contracts,
off-take contracts, all railroad, trucking and other transportation contracts,
and all power 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.  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.


 


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 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.


 


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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 shall at any time hold or acquire any notes or tangible chattel paper,
Borrower shall 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 shall, at Lender’s
request and option, pursuant to an agreement in form and substance satisfactory
to Lender, either (a) 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, or (b) arrange for Lender to become
the customer of the depositary bank with respect to the deposit account, with
Borrower being permitted, only with the consent of Lender, to exercise rights
to withdraw funds from such deposit account. 
The provisions of this paragraph shall not apply to (i) 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, (ii) deposit
accounts for which Lender is the depositary and (iii) deposit accounts
specially and exclusively used for payroll, payroll taxes and other employee
wage and benefit payments to or for the benefit of Borrower’s salaried
employees.


 


4.03.                     Investment
Property.  If Borrower shall at
any time hold or acquire any certificated securities, Borrower shall 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 shall immediately notify
Lender thereof and, at Lender’s request and option, pursuant to an agreement in
form and substance satisfactory to Lender, either (a) cause the issuer to
agree to comply with instructions from Lender as to such securities, without
further consent of Borrower or such nominee, or (b) arrange for Lender to
become the registered owner of the securities. 
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 shall immediately notify Lender thereof and, at Lender’s request and
option, pursuant to an agreement in form and substance satisfactory to Lender,
either (i) 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 case


 


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without further consent of Borrower or such nominee, or (ii) in
the case of financial assets or other investment property held through a
securities intermediary, arrange for Lender to become the entitlement holder
with respect to such investment property, with Borrower being permitted, only
with the consent of Lender, to exercise rights to withdraw or otherwise deal
with such investment property.  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 shall
promptly notify Lender thereof and, if requested by Lender, shall 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
shall 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
shall promptly notify Lender thereof and, at the request of Lender, shall take
such action as Lender may reasonably request to vest in Lender control, 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 shall promptly notify Lender thereof and, at the request and
option of Lender, Borrower shall, 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.


 


c4.07                  Commercial
Tort Claims.  If Borrower shall
at any time hold or acquire a commercial tort claim, Borrower shall immediately
notify Lender in a writing signed by


 


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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 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 shall derogate 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 South Dakota, (c) Borrower’s
organizational identification number is DL003422, (d) Borrower’s tax payer
identification number is 46-0459188 and (e) Borrower’s place of business,
chief executive office, as well as mailing address is 27716 – 462nd Avenue,
Chancellor, South Dakota  57015.


 


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 shall 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.


 


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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 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 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) 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) the Collateral, to the extent not delivered to Lender pursuant
to Section 4, will be kept at those locations listed on Schedule 9(a) 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 shall be the owner of the Collateral free from any lien, security
interest or other encumbrance, and Borrower shall 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 shall 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
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 continue
to 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
of inventory and licenses of general intangibles in the ordinary course of
business and (ii) sales or other dispositions of obsolescent items of
equipment 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


 


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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 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 $25,000, 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 shall 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 shall furnish Lender with
certificates of insurance and 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 shall have no obligation to Borrower to make any such
expenditures, nor shall the making thereof relieve Borrower of any default.


 


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11.02.              Lender’s
Obligations and Duties.  Anything
herein to the contrary notwithstanding, Borrower shall 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
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, shall be 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 any securities
constituting Collateral, receive any income thereon and 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 a
Default or an Event of Default shall have occurred and be continuing, Borrower
shall, 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 a Default or an Event of Default shall have occurred and be
continuing beyond the applicable cure period, if any, 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 shall 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 shall turn the
same over to Lender in the identical form received, together with any necessary
endorsements or assignments.  Lender
shall 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.


 


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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 execute
any and all documents and instruments that may be necessary or desirable to
accomplish the purposes of this Agreement and, 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 beyond the applicable cure
period, if any, 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 shall
lawfully do or cause to be done by virtue hereof This power of attorney is a
power coupled with an interest and shall be irrevocable.


 


14.03.              No Duty on Lender.  The powers conferred on Lender hereunder
are solely to protect its interests in the Collateral and shall not impose any
duty upon it to


 


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exercise any such powers.  Lender
shall 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 shall have
occurred and be continuing beyond the applicable cure period, if any, 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 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 shall give to Borrower at least ten 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 ten Business Days prior written notice of such sale or sales shall be
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


 


10





















 


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.


 


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 shall 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, shall 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 shall 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 shall 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
shall be 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


 


11





















 


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
shall 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 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 shall be 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
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 shall be binding upon Borrower and its respective
successors


 


12





















 


and assigns, and shall inure to the benefit of Lender and its
successors and assigns.  If any term of
this Agreement shall be 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.


 


[Signature Page Follows]


 


13





















 


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:

  
	
   

  	
   

  
	
   

  	
  GREAT PLAINS ETHANOL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Darrin Ihnen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Darrin Ihnen

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AGCOUNTRY FARM CREDIT SERVICES, FLCA

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Randolph L. Aberle

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Randolph L. Aberle

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
								



 





















 


Schedule 8(d)


 


Tort Claims


 


None.


 





















 


Schedule 9(a)


 


27716 – 462nd Avenue, Chancellor, South
Dakota  57015