Exhibit 10.7
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of August 10, 2007, between GREAT PLAINS
ETHANOL, LLC, a South Dakota limited liability d/b/a POET Biorefining -
Chancellor company ("Borrower"), and AGCOUNTRY FARM CREDIT SERVICES, FLCA
("Lender").
Recitals:
A.
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, is to make loans
to Borrower; and
B.
It is a condition precedent to Lender's making any Loans to
Borrower that Borrower execute and deliver to Lender a security agreement in
substantially the form hereof; and
C.
Borrower wishes to grant security interests in favor of 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 AS AND WHEN 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 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
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