Document:

Exhibit
10.19

 

MORTGAGE

AND

SECURITY AGREEMENT

AND

FIXTURE FINANCING STATEMENT

 

THIS INDENTURE, made this 26th day of February, 2004, by and
between UNITED WISCONSIN GRAIN PRODUCERS, LLC, a Wisconsin limited liability
company, having its principal office at 100 Richland Street, Friesland,
Wisconsin, 53935 (“Mortgagor”), and AGSTAR FINANCIAL SERVICES, PCA, a United
States instrumentality, having its address at 1921 Premier Drive, Mankato,
Minnesota, 56002 (“Mortgagee”).

 

WITNESSETH:

 

That Mortgagor is justly obligated to Mortgagee pursuant to that
certain Construction and Revolving Loan Agreement dated as of the date hereof
and executed by and between Mortgagor and Mortgagee (as the same may from time
to time be amended, modified, extended, renewed or restated, the “Loan
Agreement”) and that certain Promissory Note of Mortgagor dated the date
hereof and payable to the order of Mortgagee in the original principal amount
of Thirty Three Million Twenty-Four Thousand Twenty and 00/100 Dollars
($33,024,020.00) (as the same may from time to time be amended, modified,
extended, renewed or restated, the “Note”) and does hereby GRANT,
BARGAIN, SELL, MORTGAGE, WARRANT AND CONVEY unto Mortgagee, its successors and
assigns, forever, all that tract or parcel of land situated in the County of
Columbia, and State of Wisconsin, described in Exhibit A attached hereto and by
this reference made a part hereof (the “Land”);

 

TOGETHER with all of the buildings and improvements of every kind and
description now or hereafter located on the Land (the “Improvements”);

 

TOGETHER with all of the following property, rights and interests (the
Land, the Improvements and such property, rights and interests being
collectively called the “Premises”):

 

(a)                                  Mortgagor’s
right, title and interest, including all mineral and water rights as well as
any after-acquired title or reversion, in and to the beds of the ways, roads,
streets, avenues and alleys adjoining the Land; and

 

(b)                                 all
and singular the tenements, hereditaments, easements, appurtenances, passages,
waters, water rights, water courses, riparian rights, other rights, liberties
and privileges thereof or in any way now or hereafter appertaining thereto,
including homestead and any other claim at law or in equity as well as any
after-acquired title, franchise or license and the reversion and reversions and
remainder and remainders thereof; and

 

 

(c)                                  all
rents, issues, proceeds and profits accruing and to accrue from the Premises;
and

 

(d)                                 all
materials intended for construction, reconstruction, alteration and repair of
the Improvements, all of which materials shall be deemed to be included within
the Premises immediately upon the delivery thereof to the Premises and all
fixtures and articles of personal property now or hereafter owned by Mortgagor
and attached to or contained in and used in connection with the Premises,
including, but not limited to, all Accounts and other rights to payment whether
or not earned by performance, and including, but not limited to, payment for
property or services sold, leased, rented, licensed or assigned; Goods; Farm
Products; Chattel Paper; Inventory; Equipment; Instruments; Investment
Property; Documents; Deposit Accounts; Money; Letter-of-Credit Rights; General
Intangibles; Payment Intangibles; Software; Supporting Obligations; all
payments, rights to payment whether or not earned by performance, accounts,
general intangibles and benefits, including, but not limited to, payments in
kind, deficiency payments, letters of entitlement, storage payments, emergency
assistance, diversion payments, production flexibility contracts, contract
reserve payments, ethanol incentive funds, bioenergy programs, under or from
any preexisting, current or future federal or state government program and, to
the extent not included in the foregoing as original collateral, the proceeds
and products of the foregoing; and all renewals or replacements thereof or
articles in substitution therefor, whether or not the same are or shall be
attached to the Improvements in any manner; it being mutually agreed that all
the aforesaid property owned by Mortgagor and placed by it on the Premises
shall, so far as permitted by law, be deemed to be affixed to the realty,
security for the said indebtedness and covered by this Mortgage.  All capitalized terms in this
section are given the meaning attributed to them in the Uniform Commercial
Code, as enacted in Wisconsin.

 

(e)                                  All
proceeds of any insurance payable to Mortgagor and all subsequent owners of the
Premises as a result of the damage or destruction thereto.

 

(f)                                    Together
with all awards and other compensation hereafter paid to Mortgagor and all
subsequent owners of the Premises for any taking by eminent domain or
condemnation, either permanent or temporary, of all or any part of the Premises
or any easement or appurtenance thereof, including severance and consequential
damages and change in grade of streets, and any conveyance by private sale in
lieu thereof.

 

This Mortgage shall also constitute a security agreement as defined in
the Uniform Commercial Code with respect to (and the Mortgagor hereby grants
Mortgagee a security interest in) all personal property and fixtures owned by
Mortgagor and included in the Premises. 
The Mortgagor will pay to Mortgagee, on demand, the amount of any and
all reasonable costs and expenses (including reasonable attorneys’ fees and
legal expenses) paid or incurred by Mortgagee in connection with the exercise
of any right or remedy referred to in this paragraph.  As to those items of collateral described in this Mortgage that
are or are to become fixtures, it is intended that THIS MORTGAGE SHALL BE
EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING from the date of
its filing in the real estate records of the County where the

 

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Premises are
situated.  The name of the record owner
of the Premises is the Mortgagor set forth in page one of this Mortgage.  Information concerning the security interest
created by this instrument may be obtained from Mortgagee, as secured party, at
its address as set forth in page one of this Mortgage.  The address of the Mortgagor, as debtor, is
as set forth in page one to this Mortgage. 
The Mortgagor’s federal identification number is 39-2032455.  This document covers goods which are or are
to become fixtures.  Upon the occurrence
of a default, the giving of any required notice and the expiration of any
applicable grace or cure period, Mortgagee may, at its option, sell or
otherwise dispose of such personal property and fixtures by public or private
proceedings, separate from or together with the sale of the Premises, in
accordance with the provisions of the Wisconsin Uniform Commercial Code, and
Mortgagee may with respect to such fixtures or personal property, exercise any
other rights or remedies of a secured party under the Wisconsin Uniform
Commercial Code.  Unless such personal
property and/or fixtures are perishable or threatens to decline speedily in
value or are of a type customarily sold on a recognized market, Mortgagee shall
give Mortgagor at least ten (10) days prior written notice of the time and
place of any public sale of such fixtures or personal property or other
intended disposition thereof.  Upon
occurrence of any event of default, the Mortgagee reserves the option, pursuant
to the appropriate provisions of the Wisconsin Uniform Commercial Code to
proceed with respect to such personal property and/or fixtures as part of the
Premises in accordance with its rights and remedies with respect to the
Premises, in which event the default provisions of the Wisconsin Uniform
Commercial Code shall not apply.

 

TO HAVE AND TO HOLD the same unto Mortgagee and its successors and
assigns forever.

 

AND MORTGAGOR COVENANTS AND WARRANTS that Mortgagor is lawfully seized
of an indefeasible estate in fee simple of the Premises; that the same is free
from all encumbrances and liens whatsoever, except the “Permitted Exceptions”
identified on Exhibit B hereto, that Mortgagor has good and legal right, power
and authority to so convey the same and that Mortgagor and its successors and
assigns in interest will forever WARRANT AND DEFEND the title of the Premises
and the lien and priority of this Mortgage against the lawful claims and
demands of all persons whomsoever, subject to the Permitted Exceptions; and
that Mortgagor will execute, acknowledge and deliver all and every such further
assurances unto Mortgagee of the title to all and singular the Premises hereby
conveyed and intended so to be, or which Mortgagor may be or shall become
hereinafter bound so to do.  All such
covenants and warranties shall run with the land solely for the benefit of
Mortgagee, its successors and assigns.

 

PROVIDED, NEVERTHELESS, that if Mortgagor shall well and truly pay to
Mortgagee, or order, the principal sum of THIRTY-THREE MILLION TWENTY-FOUR
THOUSAND TWENTY and 00/100THS ($33,024,020.00) DOLLARS or such amount advanced
to Mortgagor pursuant to the Loan Agreement, the Note, and any future
obligations of Mortgagor to Mortgagee under the Loan Agreement, the Note, or
pursuant to other notes, contracts, guaranties or other evidences of
indebtedness or obligations now or hereafter executed by Mortgagor with or in
favor of Mortgagee (which Loan Agreement, Note and other evidences of
indebtedness or obligations are hereinafter collectively referred to as the
“Loan Documents”) with interest on such principal sum pursuant to the Loan
Documents at the rate specified in the Loan Documents.

 

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The indebtedness
pursuant to the Loan Documents mature not later than July 1, 2010.  The provisions of the Loan Documents are
incorporated herein by reference.

 

AND PROVIDED, that if Mortgagor shall fully perform all of the terms,
covenants, conditions and warranties of this Mortgage, then this indenture is
to be NULL AND VOID and shall be released of record at the expense of
Mortgagor, OTHERWISE to remain in full force and effect.

 

MORTGAGOR FURTHER COVENANTS AND AGREES AS FOLLOWS:

 

1.                                       To
pay promptly the principal of, premium, if any, and interest, fixed, contingent
or otherwise, on the indebtedness evidenced by the Loan Documents together with
all other sums arising under the Loan Documents and this Mortgage and secured
hereby, at the times and in the manner herein and in the Loan Documents
provided.

 

2.                                       To
keep the Premises free from statutory liens of every kind; to pay, (except when
payment for all such items has been made under Paragraph 3 hereof) before
delinquent and before any interest or penalty for non-payment attaches thereto,
all taxes, assessments, water rates, sewer rentals and other governmental
charges, fines, or impositions of every nature and to whomever assessed that
may now or hereafter be levied or assessed upon the Premises or any part
thereof, or upon the rents, issues, income or profits thereof, whether any or
all said taxes, assessments, water rates, sewer rentals or charges, fines or
impositions be levied directly or indirectly or as excise taxes or income
taxes; at Mortgagee’s request, to deliver to Mortgagee, at least ten (10) days
before delinquent, receipted bills evidencing payment therefor; to pay in full,
under protest in the manner provided by statute, any tax, assessment, rate,
rental, fine, imposition or charge aforesaid which Mortgagor may desire to contest;
and in the event of the passage, after the date of this Mortgage, of any law of
the State of Wisconsin, deducting from the value of land for the purpose of
taxation, any lien thereon or changing in any way the laws for the taxation of
mortgages or debts secured by mortgage for state or local purposes, or the
manner of the collection of any such taxes, so as to impose a tax, or upon the
rendition of any Court of competent jurisdiction of a decision that any
undertaking by Mortgagor as in this paragraph or elsewhere in this Mortgage
provided is legally inoperative, then the principal indebtedness together with
accrued interest and all other sums due hereunder (but not including any
prepayment premium) and under the Loan Documents will be due and payable at the
election of Mortgagee thirty (30) days’ after written notice to the Mortgagor,
of such election, provided, however, said option and right shall be unavailing
and the Loan Documents and Mortgage shall remain in effect as though said law
had not been enacted, if, notwithstanding such law, Mortgagor lawfully may pay
any such tax or taxes assessment, rate, rental, fine, imposition or charge to
or for Mortgagee and does in fact pay same when payable.  An assessment which is payable in
installments at the application of Mortgagor or any lessee of the Premises
shall nevertheless, for the purpose of this paragraph, be deemed due and
payable in its entirety on the day the first installment becomes due and
payable or a lien unless Mortgagee agrees that such assessment may be paid in
installments, which agreement shall not be unreasonably withheld.  Except when payment has been made under
Paragraph 3 hereof, at the request of Mortgagee, Mortgagor shall deliver to
Mortgagee receipted bills evidencing payment of such installments at

 

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least ten (10)
days before delinquent.  In the event of
a default under this Mortgage, including a default under the foregoing,
Mortgagee shall have the option, in addition to its other remedies, to require
the Mortgagor to pay immediately the outstanding balance of any assessments
being paid in installments.

 

3.                                       To
keep the Improvements insured against loss or damage resulting from fire,
windstorm and other hazards, casualties and contingencies in an amount equal to
the replacement cost thereof, and to pay promptly, when due, any premiums on
such insurance.  All insurance policies
shall be in such form and with such endorsements as shall be reasonably
acceptable to Mortgagee and shall be carried in companies approved by Mortgagee
and policies and renewals, marked ‘Paid’ or Certificates of Insurance, shall be
delivered to Mortgagee at least ten (10) days before the expiration of the old
policies and shall have attached thereto standard non-contributing mortgagee
clause (in favor of and entitling Mortgagee to collect any and all of the
proceeds payable under all such insurance) as well as standard waiver of
subrogation endorsement, all to be in form acceptable to Mortgagee.  In the event of a change in ownership or
occupancy of the Premises immediate notice thereof by mail shall be delivered
by Mortgagee to all insurers and in the event of loss, Mortgagor will give
immediate notice by mail to Mortgagee. 
Except for losses in an annual aggregate amount of $50,000 or less,
which Mortgagor shall handle directly, the Mortgagor hereby authorizes
Mortgagee, at Mortgagee’s option, to collect, adjust and compromise any losses
under any of the insurance aforesaid and after deducting costs of collection to
apply the proceeds at its option as follows: 
(1)  As a credit upon any portion
as selected by Mortgagee, of the indebtedness secured hereby, or (2) To
restoring the improvements in which event Mortgagee shall not be obligated to
see the proper application thereof nor shall the amount so released or used be
deemed a payment on any indebtedness secured hereby, or (3) To deliver same to
the owner of the Premises.  In the event
of foreclosure of this Mortgage, or other transfer of title to the Premises in
extinguishment of the indebtedness secured hereby, all right, title and
interest of Mortgagor in and to any insurance policies then in force shall pass
to the purchaser or grantee of the Premises. 
Mortgagor shall not carry separate insurance, concurrent in kind or form
and contributing, in the event of loss, with any insurance policies required
hereunder.  Mortgagor shall at all times
be in compliance with the terms and provisions of all insurance policies
required hereunder or in fact maintained by Mortgagor with respect to the
Premises whether or not required hereunder.

 

That notwithstanding any provisions herein to the contrary and in
particular the foregoing provisions of this Section 3, in the event of any
such loss or damage as therein described to the improvements upon the Premises,
it is hereby understood, covenanted and agreed that the Mortgagee shall make
the proceeds received under any such insurance policies as therein described
available for the restoration of the improvements so damaged, subject to the
following conditions:  (a) that
Mortgagor is not then in default under any of the terms, covenants and
conditions hereof; (b) that Mortgagee shall first be given satisfactory proof
that such improvements have been fully restored or that by the expenditure of
such money will be fully restored, free and clear of all liens, except as to
the lien of this Mortgage; (c) that in the event such proceeds shall be
insufficient to restore or rebuild the said improvements, Mortgagor shall
deposit promptly with Mortgagee funds which, together with the insurance
proceeds, shall be sufficient to restore and rebuild the said Premises; (d)
that in the event Mortgagor shall fail

 

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within a
reasonable time, subject to delays beyond its control, to restore or rebuild
the said improvements, then Mortgagee, at its option, may restore or rebuild
the said improvements for or on behalf of the Mortgagor and for such purpose
may do all necessary acts; and (e) that the excess of said insurance proceeds
above the amount necessary to complete such restoration shall be applied as
hereinbefore provided as a credit upon any portion as selected by Mortgagee, of
the indebtedness secured hereby.  In the
event any of the said conditions are not or cannot be satisfied, then the
alternate disposition of such insurance proceeds as provided above in this
Section 3 shall again become applicable.

 

Under no circumstances shall Mortgagee become personally obligated to
take any action to restore or rebuild the said Improvements.  In the event of foreclosure of this
Mortgage, or other transfer of title to the Premises in extinguishment of the
indebtedness secured hereby, all right, title and interest of the Mortgagor, in
and to any insurance policies then in force, and to the proceeds of any such
policies, shall pass to the purchaser or grantee.

 

4.                                       To
carry and maintain such liability and indemnity insurance (including, but
without limitation, water damage and the so-called assumed and contractual liability
coverage) as may reasonably be required from time to time by Mortgagee in
forms, amounts and with companies satisfactory to Mortgagee.  Such insurance policies shall name Mortgagee
as an additional insured.  Certificates
of such insurance, premiums prepaid, shall be deposited with Mortgagee and
shall contain provision for thirty (30) days’ notice to Mortgagee prior to any
cancellation thereof.

 

5.                                       That
none of the Improvements shall be materially altered, removed or demolished nor
shall any fixtures, appliances or articles of personal property on, in or about
the Improvements be severed, removed, sold or mortgaged, without the consent of
Mortgagee which may be withheld in Mortgagee’s sole discretion except that such
consent of Mortgagee shall not be required in the case of:  (i) the severance, removal or sale of any
fixtures, chattels or articles of personal property, provided that they are
promptly replaced by similar fixtures, chattels and articles of personal
property, at least equal in quality and condition as those replaced, free from
any security interest in or encumbrance thereon or reservation of title
thereto; and (ii) alterations, removals or demolitions done for the purpose of
making improvements done in the ordinary course of operating the Premises as
income producing property provided that any such alteration, removal or
demolition costs less than $50,000; to permit, commit or suffer no waste,
impairment or deterioration of the Premises or any part thereof; to keep and
maintain the Premises and every part thereof in thorough repair and condition;
to effect such repairs as Mortgagee may reasonably require and from time to
time to make all needful and proper replacements so that the Premises will, at
all times, be in good condition, fit and proper for the respective purposes for
which they were originally erected or installed; to comply with all statutes,
orders, requirements or decrees relating to the Premises by any federal, state
or municipal authority; to observe and comply with all conditions and
requirements necessary to preserve and extend any and all rights, licenses,
permits (including but not limited to zoning variances, special exceptions and
non-conforming uses), privileges, franchises and concessions which are
applicable to the Premises or which have been granted to or contracted for by
Mortgagor in connection with any existing or presently contemplated use of the
Premises; and to permit Mortgagee or its agents, at all reasonable times,

 

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to enter upon and
inspect the Premises; provided that such inspections shall not unreasonably
disrupt Mortgagor’s business operations.

 

6.                                       To
save Mortgagee harmless from all reasonable costs and expenses, including
reasonable attorneys’ fees, and costs of a title search, continuation of
abstract and preparation of survey, incurred by reason of any action, suit,
proceeding, hearing, motion or application before any court or administrative
body (excepting an action to foreclose or to collect the debt secured hereby)
in and to which Mortgagee may be or become a party by reason hereof, including
but not limited to condemnation, bankruptcy and administrative proceedings, as
well as any other of the foregoing wherein proof of claim is by law required to
be filed or in which it becomes necessary to defend or uphold the terms of and
the lien created by this Mortgage, and all money paid or expended by Mortgagee
in that regard, together with interest thereon from date of such payment at the
rate set forth in the Loan Documents shall be so much additional indebtedness
secured hereby and shall be immediately and without notice due and payable by
Mortgagor.

 

7.                                       That
Mortgagor will give Mortgagee immediate written notice of the actual or
threatened commencement of any proceedings under eminent domain affecting all
or any part of the Premises or any easement therein or appurtenance thereof,
including severance and consequential damage and change in grade of streets,
and will deliver to Mortgagee copies of any and all papers served in connection
with any such proceedings.  Mortgagor
further covenants and agrees to make, execute and deliver to Mortgagee, at any
time or times upon request, free, clear and discharged of any encumbrances of
any kind whatsoever, any and all further assignments and/or other instruments
deemed necessary by Mortgagee for the purpose of validly and sufficiently
assigning all awards and other compensation heretofore and hereafter to be made
to Mortgagor (including the assignment of any award from the United States
Government at any time after the allowance of the claim therefor, the
ascertainment of the amount thereof and the issuance of the warrant for payment
thereof) for any taking, either permanent or temporary, under any such
proceedings.

 

Mortgagor further agrees that should the Premises or any part thereof,
including any easement or appurtenance thereof, be taken or damaged,
permanently or temporarily, by reason of any public improvement or condemnation
proceedings, including severance and consequential damage and change in grade
of streets, or damage by earthquake or in any other manner, Mortgagee shall be
entitled to any compensation, award, payment or relief therefor and Mortgagor
does hereby appoint Mortgagee its attorney-in-fact, coupled with an interest,
and authorizes, directs and empowers such attorney, at the option of the
attorney on behalf of the Mortgagor, its successors or assigns, to commence,
appear in and prosecute, in its own name, any action or proceedings, to adjust
or compromise any claim therefor and to collect and receive proceeds thereof,
and to give proper receipts and acquittances therefor and after deducting
expenses of collection, to apply the net proceeds as a credit on any portion,
as selected by Mortgagee, of the indebtedness secured hereby notwithstanding
the fact that the amount owing thereon may not then be due and payable
hereunder or that the indebtedness is otherwise adequately secured, provided,
however, that no prepayment premium shall be due in connection with any net
proceeds applied to the indebtedness.

 

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8.                                       That
Mortgagor within five (5) business days upon request by mail, will furnish a
written statement duly acknowledged confirming the amount of the outstanding
principal balance set forth in the Loan Documents and all interest accrued
thereon and all other amounts due upon this Mortgage and whether any offsets or
defenses exist against the mortgage debt.

 

9.                                       That
upon default by Mortgagor in the performance or observance of any of the terms,
covenants, conditions or warranties herein or in the Loan Documents contained,
after any notice required by the terms of the Loan Documents and the expiration
of any applicable cure or grace period, Mortgagee may, at its option, and
whether electing to declare the whole indebtedness due and payable or not,
perform the same without waiver of any other remedy, and any amount paid or
advanced by Mortgagee in connection therewith or any other reasonable costs,
charges or expenses incurred in the protection of the Premises and the
maintenance of this lien including reasonable attorneys’ fees, with interest
thereon, at the rate set forth in the Loan Documents shall be repayable by the
Mortgagor without demand and shall be an additional lien upon the Premises
prior to any right, title, interest or claim attaching or accruing subsequent
to the lien of this Mortgage and shall be secured by and collectible as a part
of this Mortgage.

 

10.                                 That
upon any default by Mortgagor in the payment of the principal sum secured
hereby or of any installment thereof, or of interest thereon, as they severally
become due, or any default, in the performance or observance of any other term,
covenant or condition in this Mortgage or in the Loan Documents or in any
instrument now or hereafter evidencing or securing said debt, and the
continuance of any such default after the giving of any required notice and the
expiration of any applicable grace period provided in Paragraph 32 of this
Mortgage, then in any or either of said events, the whole indebtedness secured
hereby together with accrued interest and all other sums due hereunder or under
the Loan Documents, shall, at the option of Mortgagee, become immediately due
and payable together with interest at the rate set forth in the Loan Documents
and together with reasonable attorneys’ fees and without relief from valuation
or appraisement laws, and thereupon, or at any time during the existence of any
such default, Mortgagee may exercise with respect to all personal property and
fixtures which are a part of the Premises, all the rights and remedies accorded
upon default to a secured party under the Uniform Commercial Code as in effect
in the State of Wisconsin, and may proceed to foreclose this Mortgage by judicial
proceedings, anything hereinbefore or in said Loan Documents contained to the
contrary notwithstanding, and any failure to exercise said option shall not
constitute a waiver of the right to exercise the same at any other time.  Mortgagee may become the purchaser at any
such foreclosure sale, and for the purpose of making settlement or payment of
the purchase price, shall be entitled to use the Loan Documents and any claims
for interest accrued and unpaid thereon, together with all other sums, with interest,
advanced and unpaid hereunder, and all statutory charges for such foreclosure,
including maximum attorney’s fees allowed by law in order that there may be
credited as paid on the purchase price the sums then due under the Loan
Documents including principal and interest thereon and all other sums, with
interest, advanced and unpaid hereunder, and all charges and expenses of such
foreclosure including attorneys’ fees allowed by law.

 

11.                                 That
upon default by Mortgagor as aforesaid, and the election of acceleration by
Mortgagee as aforesaid, Mortgagee may, at its option, and subject to the notice
provisions of this

 

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Mortgage, collect
the whole amount due and payable in a suit at law or by foreclosure of this
Mortgage by action or by the exercise of any other remedy available at law or
equity, and Mortgagee may sell the property at public sale and give deeds of
conveyance to the purchasers pursuant to applicable Wisconsin statutes, and may
apply the proceeds of any public sale to pay all amounts then due on this
Mortgage, including principal, interest, and the amount of any taxes,
assessments and insurance premiums and any other sum which may then be due
Mortgagee,  and also to pay all costs
and expenses of any such foreclosure sale, including but not limited to
attorney fees, costs of continuation of abstract, examination of title and
title insurance, all of which costs, expenses and fees Mortgagor agrees to pay.

 

12.                                 That
in case of foreclosure of this Mortgage in any court of law or equity, whether
or not any order or decree shall have been entered therein, and to the extent
permitted by law, a reasonable sum as aforesaid shall be allowed for attorneys’
fees of the plaintiff in such proceeding, for stenographers’ fees and for all
moneys expended for documentary evidence and the cost of a complete abstract of
title and title report for the purpose of such foreclosure, such sums to be
secured by the lien hereunder; and, to the extent permitted by law, there shall
be included in any judgment or decree foreclosing this Mortgage and be paid out
of said rents, issues and profits from the Premises or the proceeds of any sale
made in pursuance of any such judgment or decree:  (1) all reasonable costs and expenses of such suit or suits,
advertising, sale and conveyance, including reasonable attorneys’, solicitors’
and stenographers’ fees, outlays for documentary evidence and the cost of said
abstract, examination of title and title report; (2) all moneys advanced by
Mortgagee, if any, for any purpose authorized in this Mortgage, with interest
as herein provided; (3) all the accrued interest and Default Interest remaining
unpaid on the indebtedness hereby secured; (4) any acceleration premium then
arising; and (5) all the said principal money remaining unpaid.  The overplus of the proceeds, if any, shall
be paid to the said Mortgagor, or as the court may direct.

 

13.                                 That
in case of any foreclosure sale of the Premises, the same may be sold in one or
more parcels.  Mortgagor, for Mortgagor
and all who may claim through or under Mortgagor, waives any and all right to
have the Premises marshaled upon foreclosure of the lien hereof and agrees that
any court having jurisdiction to foreclose such lien may order the Premises
sold as an entirety.  Mortgagor agrees
that to the extent permitted by law, this Mortgage may be foreclosed by
Mortgagee at Mortgagee’s option, pursuant to the provisions of
Section 846.101, 846.102 and/or 846.103 of the Wisconsin statutes or any
successor thereof.

 

14.                                 That
the failure of Mortgagee to exercise the option for acceleration of maturity
and/or foreclosure following any default as aforesaid or to exercise any other
option granted to Mortgagee hereunder in any one or more instances, or the acceptance
by Mortgagee of partial payments hereunder shall not constitute a waiver of any
such default, but such option shall remain continuously in force.  Acceleration of maturity, once claimed
hereunder by Mortgagee, may, at the option of Mortgagee, be rescinded by
written acknowledgment to that effect by Mortgagee, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind
such acceleration of maturity.

 

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15.                                 That
in the event of foreclosure of this Mortgage, Mortgagor does hereby authorize
and empower Mortgagee, its successors and assigns:  (a) to pay all taxes, special assessments, assessments, water
rates, sewer rentals and other governmental charges of every kind and nature
that may then have been or that thereafter during the period of redemption from
sale under such foreclosure may be levied or assessed upon the Premises or any
part thereof; (b) to keep the Improvements insured and to pay the premiums
therefor as required hereunder during the period of redemption from the sale
under such foreclosure; and (c) to keep the Premises in thorough repair as
required hereunder during the period of redemption of the sale from such
foreclosure, and any amount so paid or advanced by Mortgagee under the
authority of this paragraph, together with interest thereon at the rate set
forth in the Loan Documents, shall be an additional lien upon the Premises
prior to any right, title, interest or claim thereon attaching or accruing subsequent
to the lien of this Mortgage and shall be secured by and collectible as part of
the within Mortgage.

 

16.                                 That
at the option of Mortgagee, this Mortgage shall become subject and subordinate,
in whole or in part (but not with respect to priority of entitlement to any
insurance proceeds, award in condemnation or any intervening judgment lien) to
any and all leases of all or any part of the Premises upon the execution and
recording in the offices of the County Recorder in and for Columbia County,
Wisconsin, by Mortgagee of a unilateral declaration to that effect.

 

17.                                 That
the rights and remedies herein provided are cumulative and Mortgagee may
recover judgment thereon, issue execution therefor, and resort to every other
right or remedy available at law or in equity, without first exhausting and
without affecting or impairing the security or any right or remedy afforded by
this Mortgage and no enumeration of special rights or powers by any provisions
of this Mortgage shall be construed to limit any grant of general rights or
powers, or to take away or limit any and all rights granted to or vested in
Mortgagee by virtue of the laws of Wisconsin.

 

18.                                 The
Mortgagor hereby waives, to the extent permitted by law, the benefits of all
valuation, appraisement, homestead, exemption, stay and moratorium laws, now in
force or which may hereafter become laws.

 

19.                                 That
Mortgagee, without notice, and without regard to the consideration, if any,
paid therefor, and notwithstanding the existence at that time of any inferior
liens thereon, may release any part of the security described herein or any
person liable for any indebtedness secured hereby without in any way affecting
the priority of the lien of this Mortgage, to the full extent of the
indebtedness remaining unpaid hereunder upon any part of the security not
expressly released and may agree with any party obligated on said indebtedness
or having any interest in the security described herein to extend the time for
payment of any part or all of the indebtedness secured hereby.  Such agreement shall not, in any way,
release or impair the lien hereof, but shall extend the lien hereof as against
the title of all parties having any interest in said security which interest is
subject to said lien.

 

20.                                 In
the event Mortgagee (a) releases, as aforesaid, any part of the security
described herein or any person liable for any indebtedness secured hereby, (b)
grants an extension of time

 

10

 

of any payments of
the debt secured hereby; (c) takes other or additional security for the payment
thereof; (d) waives or fails to exercise any right granted herein or in the
Loan Documents, said act or omission shall not release the Mortgagor,
subsequent purchasers of the Premises or any part thereof, or makers or
sureties of this Mortgage or of the Loan Documents, under any covenant of this
Mortgage or of the Loan Documents, nor preclude Mortgagee from exercising any
right, power or privilege herein granted or intended to be granted in the event
of any other default then made or any subsequent default.

 

21.                                 That
nothing herein contained nor any transaction related thereto shall be construed
or so operate as to require the Mortgagor to make any payment or to do any act
contrary to law; that if any clauses or provisions herein contained operate or
would prospectively operate to invalidate this Mortgage in whole or in part
then such clauses and provisions only shall be held for naught, as though not
herein contained, and the remainder of this Mortgage shall remain operative and
in full force and effect.  All notices,
approvals, consents, requests and other communications required to be given
hereunder shall be in writing and mailed, faxed, or delivered at the addresses
set forth below, or at such other address as such party may specify by written
notice to the other parties hereto:

 

	
  If to the
  Mortgagor:

  	
   

  	
  United Wisconsin
  Grain Producers, LLC

  
	
   

  	
   

  	
  100 Richland
  Street

  
	
   

  	
   

  	
  P.O. Box 247

  
	
   

  	
   

  	
  Friesland,
  WI  53935

  
	
   

  	
   

  	
  Telephone:  (920) 348-5016

  
	
   

  	
   

  	
  Fax:  (920) 348-5009

  
	
   

  	
   

  	
  Attention:  President

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Thomas D.
  Johnson

  
	
   

  	
   

  	
  Brown Winick
  Graves Gross Baskerville and Schoenebaum, PLC

  
	
   

  	
   

  	
  666 Grand
  Avenue, Suite 2000

  
	
   

  	
   

  	
  Des Moines, Iowa
  50309

  
	
   

  	
   

  	
  Facsimile: (515)
  242-2488

  
	
   

  	
   

  	
   

  
	
  If to the
  Mortgagee:

  	
   

  	
  AgStar Financial
  Services, PCA

  
	
   

  	
   

  	
  1921 Premier
  Drive

  
	
   

  	
   

  	
  P.O. Box 4249

  
	
   

  	
   

  	
  Mankato, MN
  56002-4249

  
	
   

  	
   

  	
  Telephone: (507)
  386-4242

  
	
   

  	
   

  	
  Facsimile: (507)
  344-5088

  
	
   

  	
   

  	
  Attention: Mark
  Schmidt

  

 

11

 

	
  With copy to:

  	
   

  	
  Phillip L. Kunkel

  
	
   

  	
   

  	
  Gray Plant Mooty

  
	
   

  	
   

  	
  1010 West St.
  Germain, Suite 600

  
	
   

  	
   

  	
  St. Cloud,
  MN  56301

  
	
   

  	
   

  	
  Facsimile: (320)
  252-4482

  

 

All such notices
and communications shall have been duly given and shall be effective:  (a) when delivered; (b) when transmitted via
facsimile to the number set forth above; (c) the business day following the day
on which the same has been delivered prepaid (or pursuant to an invoice
arrangement) to a reputable national overnight air courier service; or (d) the
third business day following the day on which the same is sent by certified or
registered mail, postage prepaid.  Any
confirmation sent by the Mortgagee or Mortgagor to a Borrower of any borrowing
under this Agreement shall, in the absence of manifest error, be conclusive and
binding for all purposes

 

22.                                 That
the Premises herein mortgaged being located in the State of Wisconsin, this
Mortgage and the rights and indebtedness hereby secured shall, without regard
to the place of contract or payment, be construed and enforced according to the
internal laws of the State of Wisconsin.

 

23.                                 Mortgagor
agrees that upon or any time after the occurrence and continuance beyond any
applicable cure period of a default hereunder or during the pendency of any
action to foreclose this Mortgage, Mortgagee, shall upon application to the
circuit court where the Premises or any part thereof is located by an action
separate from the foreclosure or in the foreclosure action (it being understood
and agreed that the existence of a foreclosure is not a prerequisite to any
action for a receiver hereunder), be entitled to the appointment of a receiver
for the rents, profits and all other income of every kind which shall accrue
and be owing for the use or occupation of the Premises or any part thereof.  Mortgagee shall be entitled to the
appointment of a receiver without regard to waste, adequacy of the security or
solvency of Mortgagor or without the requirement of posting of any bond or
security and without regard to the then value of the Premises.  The Mortgagee hereunder or any holder of the
Loan Documents may be appointed as the receiver.  The receiver, who shall be an experienced property manager, shall
collect (until the indebtedness secured hereby is paid in full and, in the case
of a foreclosure action, during the entire redemption period) the rents,
profits and all other income of every kind, manage the Premises so to prevent
waste, execute leases within or beyond the period of the receivership if
approved by the court and apply all rents, profits and other income collected
by the receiver to the following in such order as may be designated by
Mortgagee: 

 

A.                                   To
the payment of all reasonable fees of the receiver, if any, approved by the
court;

 

B.                                     To
the repayment of tenant security deposits, with interest thereon, if required
by applicable statutes;

 

12

 

C.                                     To
the payment when due of, delinquent or current, real estate taxes or special
assessments with respect to the Premises, or the periodic escrow for the
payment of the same;

 

D.                                    To
the payment when due of premiums for insurance of the type required hereby, or
the periodic escrow for payment of the same, if any;

 

E.                                      To
the payment of expenses for normal maintenance of the Premises; and

 

F.                                      If
received prior to any foreclosure sale of the said Premises, to Mortgagee for
payment of the indebtedness secured by this Mortgage, but no such payment made
after acceleration of the indebtedness shall affect such acceleration.

 

 

As provided in applicable statutes, Mortgagee shall have the right at
any time and without limitation to advance money to the receiver to pay any
part of or all of the items which the receiver should otherwise pay if cash
were available from the Premises and sums so advanced with interest at the rate
provided in the Loan Documents, shall be secured hereby, or if advanced during
the period of redemption, shall be a part of the sum required to be paid to
redeem from the sale.

 

Upon the occurrence and continuation of a default beyond any applicable
cure period, Mortgagor for itself and any subsequent owner of the Premises
hereby waives any and all defenses to the application for a receiver and hereby
specifically consents to such appointment upon notice but nothing herein
contained is to be construed to deprive the holder of this Mortgage of any
other right, remedy or privilege it may have under the law to have a receiver
appointed.  The provision for the
appointment of a receiver and the assignment of such rents, issues and profits
is an express condition upon which the loan hereby secured is made.  The rights and remedies herein provided for
shall be deemed to be cumulative and in addition to, and not in limitation of,
those provided by law, and if there be no receiver so appointed, Mortgagee may
proceed to collect the rents, issues and profits from the Premises.

 

24.                                 That
in the event of the sale or transfer by operation of law, or otherwise, of all
or any part of the Premises, Mortgagee is hereby authorized and empowered to
deal with such vendee or transferee with reference to the Premises, or the debt
secured hereby, or with reference to any of the terms or conditions hereof, as
fully and to the same extent as it might with Mortgagor, without in any way
releasing or discharging Mortgagor from its liability or undertaking hereunder.

 

25.                                 Mortgagor
shall maintain and keep in full force and effect its legal existence, its right
to carry on its business, and all franchises, rights and privileges heretofore
or hereafter granted to or for Mortgagor, and shall file within the prescribed
time any and all franchise tax reports and any other tax reports or returns,
and pay all such taxes when due and payable all in compliance with the
provisions of any present or future law.

 

13

 

26.                                 Mortgagor
represents and warrants that on the date on which this Mortgage is executed and
delivered, neither it, this Mortgage, nor the Premises, nor the contemplated
use of the Improvements on the Premises are in violation of any easements, covenants
and whether restrictions of record or not, affecting or binding on the
Premises.  Mortgagor further covenants
that Mortgagor shall at all times faithfully and timely perform or cause to be
performed all of the terms, covenants and conditions, on Mortgagor’s part to be
performed, contained in any agreements, easements, permits or other instruments
affecting the Premises.  Mortgagor
covenants and agrees that it will not waive or modify any of the terms of any
of such agreements, easements, permits or other instruments or the rights or
easements created thereby or cancel or surrender same or release or discharge
any party thereunder or person bound thereby of or from any of the terms,
covenants or conditions thereof or permit the release or discharge of any party
thereunder in a manner that adversely affects mortgagee’s security, without, in
each instance, the prior written consent of Mortgagee.  Mortgagor shall take all necessary action to
effect the performance of all of the obligations of the other parties to and
the persons bound by the said agreements, easements, permits and other
instruments.

 

Mortgagor will promptly give to Mortgagee copies of all notices,
advices, demands, requests, consents, statements, approvals, disapprovals,
authorizations, determinations, satisfactions, waivers, designations, refusals,
confirmations or denials which it shall give or receive under any of the
aforesaid agreements, easements, permits and other instruments to the extent
any of the foregoing adversely affect Mortgagee’s security.

 

27.                                 Mortgagor
hereby represents and warrants that:

 

(a)                                  the
Premises and the operations presently conducted thereon are not in material
violation of any zoning ordinances, building codes or Environmental Laws (as
hereinafter defined) ;

 

(b)                                 neither
Mortgagor nor to the knowledge of Mortgagor, after due inquiry, any other
person or entity has ever caused or permitted any hazardous substance to be
placed, held, located, generated, treated or disposed of, on, under or at the
Premises except in conformance with applicable law;

 

(c)                                  Mortgagor
has not received any notice from any governmental agency that the Premises and
the operations presently conducted thereon are the subject of any pending or
threatened investigation, inquiry or proceeding under any Environmental Laws;

 

(d)                                 neither
Mortgagor, nor to the knowledge of Mortgagor, after due inquiry, any other
person, has ever caused or permitted any asbestos to be located on the
Premises;

 

(e)                                  to
Mortgagor’s knowledge, after due inquiry, no hazardous substance has ever
migrated in, on, about or under the Premises;

 

14

 

(f)                                    Mortgagor
has no knowledge of any use of the Premises by any prior owner which violated
any applicable Environmental Laws; and

 

(g)                                 Mortgagor
has duly obtained or secured all necessary permits, licenses, and other
governmental authorizations either necessary or appropriate under Environmental
Laws for the construction and operation of the Project.

 

28.                                 Mortgagor
hereby covenants and agrees that:

 

(a)                                  its
own use of the Premises and the operations and activities conducted thereon
will at all times be in compliance with all Environmental Laws and that it will
exercise its best efforts to secure compliance by other users of the Premises
with all Environmental Laws;

 

(b)                                 Mortgagor
will not cause or permit any hazardous substance ever to be generated, handled,
used, stored treated or placed on, under or at, or to escape, leak, seep, spill
or be discharged, emitted or released from, the Premises or any part thereof,
except in compliance with Environmental Laws, provided, however,
that Mortgagor may store reasonable quantities of chemicals, cleansers and
other materials reasonably required for maintenance and operation of the
Premises provided the same are properly stored, are used in the ordinary course
of business, and in compliance with all applicable laws and provided, however,
that Mortgagor may engage in the manufacturing, processing, storage,
transportation and production of ethanol, including all ingredients and
byproducts in compliance with applicable laws;

 

(c)                                  the
use of the Premises by Mortgagor of the Premises will not result in the
unlawful release or presence of any hazardous substance or solid waste in, on
or under the Premises and Mortgagor will exercise its best efforts to assure
that the use of the Premises by any tenant, licensee or other occupant will not
result in the unlawful release or presence of any hazardous substance or solid
waste in, on or under the Premises;

 

(d)                                 Mortgagor
shall give immediate notice to the Mortgagee of any violation, or receipt of
any notice or complaint of any violation or alleged violation, of any
Environmental Laws.  Mortgagor will, at
the Mortgagor’s expense, furnish Mortgagee with any and all environmental
reports, tests, analyses, and studies reasonably requested by Mortgagee to
determine whether the Premises has been or is being used for the handling,
generation, disposal, storage, or transportation of any hazardous substances,
and whether the Premises and all activities conducted thereon are in compliance
with all Environmental Laws.

 

(e)                                  Mortgagee,
its agents and representatives, may from time to time make periodic inspections
of the Premises and in connection therewith may make

 

15

 

such tests of the air, soil, groundwater, and building materials, as
Mortgagee, its agents and representatives, shall reasonably deem necessary,
provided, however, such inspections shall not unreasonably disrupt Mortgagor’s
business operations; and

 

(f)                                    Mortgagor
shall use its best efforts to cause any and all tenants, licensees and other
occupants of the Premises to conduct their respective businesses and uses of
the Premises so as to comply in all respects with Environmental Laws.

 

For purposes of section 27 and this section28, the term
“Environmental Laws” shall mean and include any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any governmental
authority pertaining to health or to the environment, and relating to the
Premises, including without limitation, the Clean Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986
(“SARA”), and as may be further amended (collectively “CERCLA”), the Federal
Water Pollution Control Act Amendments, the Occupational Safety Health Act of
1970, as amended, the Resource Conservation and Recovery Act of 1976, as
amended (“RCRA”), the Hazardous Materials Transportation Act of 1975, as
amended, the Safe Drinking Water Act, as amended, and the Toxic Substances
Control Act, as amended.  Likewise, the
terms “hazardous substance” and “Release” shall have the meanings specified in
CERCLA and the terms “solid waste” and “disposal” (or “disposed”) shall have
the meanings specified in RCRA; provided, however, in the event
either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined therein, such broader meaning shall apply subsequent to the effective
date of such amendment, and provided further that, to the extent the
laws of the state in which the mortgaged premises is located establish a
meaning for “hazardous substance,” “release,” “solid waste” or “disposal” which
is broader than that specified in either CERCLA or RCRA, such broader meaning
shall apply with regard to the Premises.

 

29.                                 Mortgagor
covenants and warrants that the Premises are and will be the subject of validly
issued and outstanding permits and that the Premises are (and Mortgagor
covenants that they will remain) permitted by and are consistent with any and
all zoning, ecological, environmental and use restrictions and all other
governmental laws, rules and regulations applicable to the Premises and Mortgagor
agrees that these covenants and warranties shall be fully accurate and in force
continually hereafter for so long as the indebtedness secured hereby is unpaid.

 

30.                                 Mortgagor
covenants not to initiate, join in, or consent to any change in any zoning ordinance,
private restrictive covenants or other public or private restriction changing,
limiting or restricting the uses which may be made of the Premises or any part
thereof, without the prior written consent of Mortgagee in each instance.  Without limiting the generality of the
foregoing, (a) Mortgagor shall not by act or omission permit all or any part of
the Premises to be availed of any municipal or governmental requirements for
the construction or maintenance of any building or other improvements on premises
not part of the Premises, and (b) Mortgagor

 

16

 

shall not by act
or omission impair the integrity of the Premises as a parcel separate and apart
from all other premises not subject to this Mortgage.  Any attempt by Mortgagor to take any action which would violate
any of the foregoing provisions of this paragraph 30 shall be void.

 

31.                                 Notwithstanding
anything herein or in the Loan Documents secured hereby to the contrary, it is
hereby agreed that in no event shall the amount paid, or agreed to be paid, to
Mortgagee as interest pursuant to the terms of the Loan Documents exceed the
highest lawful rate permissible under applicable usury laws if any.  If Mortgagee would, but for the operation of
this paragraph, ever receive as interest an amount which would exceed the
highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the unpaid principal balance due hereunder and not
to the payment of interest.

 

Mortgagor covenants and agrees that the indebtedness secured by this
Mortgage and the proceeds of such indebtedness are for business purposes only.

 

Mortgagor hereby represents and warrants that no portion of the
Premises is homestead property of Mortgagor.

 

32.                                 That
(a) if default be made in the payment of the principal sum secured hereby or of
any installment thereof, or of interest thereon, or of any other sum due
hereunder, under the Loan Documents or in any other document, instrument, or
agreement now or hereafter evidencing or securing said debt as they severally
become due and such default shall continue uncured for ten (10) days beyond the
due date thereof; (b) if default be made in the performance or observance of
any other term, covenant, or condition in this Mortgage or in the Loan
Documents or in any other document, instrument or agreement now or hereafter
evidencing or securing said debt and such default shall continue uncured for a
period of ten (10) days after notice to Mortgagor unless such default is of
such nature as cannot be cured within such ten (10) day period but can be cured
during a longer period and Mortgagor has initiated action to cure such default
and diligently pursues the curing of such default, in which case, such ten (10)
day period shall be extended for a time that is reasonably necessary to cure
such default; (c) if default be made in any payment or performance due under
the Loan Documents, this Mortgage or any other document, instrument or
agreement now or hereafter evidencing or securing said debt and it is expressly
stated herein or therein that there is no applicable grace period; (d) if
proceedings be instituted for the foreclosure or collection of any mortgage,
judgment or lien prior or subordinate to the lien of this Mortgage materially
affecting the Premises; (e) if Mortgagor shall make a general assignment for
the benefit of creditors, or shall file a voluntary petition in bankruptcy, or
shall be adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking, consenting to, or acquiescing in, reorganization, arrangement,
adjustment, composition, liquidation, dissolution or similar relief, under any
present or future statute, law or regulation relating to bankruptcy,
insolvency, reorganization or relief of debtors or if Mortgagor shall file an
answer admitting or shall fail to deny the material allegations of a petition
against Mortgagor seeking any such relief shall not have been dismissed within
sixty (60) days after the commencement thereof; or (f) if a trustee, receiver
or liquidator of Mortgagor or any substantial part of its properties or assets
shall be appointed with the consent or acquiescence of Mortgagor or if any such
appointment, if not so consented to or acquiesced in, shall remain unvacated or

 

17

 

unstayed for an
aggregate of sixty (60) days: then at such time, or upon the happening of any
such event, or at any time thereafter unless cured to Mortgagee’s satisfaction,
as the case may be, the entire principal sum secured hereby, together with
accrued interest or any portion thereof as selected by Mortgagee and all other
sums due hereunder, under the Loan Documents and any other document, instrument
or agreement now or hereafter evidencing or securing the indebtedness, shall,
at the option of Mortgagee, become immediately due and payable and shall
thereupon be collectible by exercise of any remedy available under this
Mortgage or any other document given as additional security for the
indebtedness secured hereby as fully and completely as if all of the said sums
of money were originally stipulated to be paid on such day, anything in said
Loan Documents or in this Mortgage to the contrary notwithstanding, with
reasonable attorneys’ fees and other reasonable costs and charges and without
relief from valuation or appraisement laws. 
In addition, such principal sum and all such other sums shall bear
interest from the date of such default until paid at the rate provided in the
Loan Documents, such interest to be paid on demand.  The remedies provided under this paragraph shall be in addition
to and not a limitation on any other rights or remedies contained in this
Mortgage or available as a result of any default by Mortgagor hereunder.  Thereupon, or at any time during the
existence of any such default, Mortgagee may proceed to foreclose this
Mortgage, anything herein or in said Loan Documents contained to the contrary
notwithstanding, including a partial foreclosure.  Any failure of Mortgagee to exercise any option which Mortgagee
may have hereunder, under the documents and instruments evidencing and securing
the debt, or at law or in equity, shall not constitute a waiver of the right to
exercise the same at any other time.

 

33.                                 That
all covenants hereof shall run with the land solely for the benefit of
Mortgagor and its successors and assigns.

 

34.                                 That
this Mortgage and the rights and indebtedness hereby secured, without regard to
the place of contract or payments, be construed and enforced according to the laws
of the State of Wisconsin.

 

35.                                 That
Mortgagor will do, execute, acknowledge and deliver such further reasonable
acts, deeds, conveyances, transfers and assurances necessary or proper, in the
reasonable judgment of Mortgagee, for the better assuring, conveying,
mortgaging, assigning and confirming unto the Mortgagee all property mortgaged
hereby.

 

36.                                 Each
right, power and remedy herein conferred upon Mortgagee is cumulative and in
addition to every other right, power or remedy, existing or implied, given now
or hereafter existing at law or in equity, except as specifically restricted
herein and each and every right, power and remedy herein set forth or otherwise
so existing may be exercised from time to time as often and in such order as
may be deemed expedient by Mortgagee, and the exercise or the beginning of the
exercise of one right, power or remedy shall not be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy; and
no delay or omission of Mortgagee in the exercise of any right, power or remedy
accruing hereunder or arising otherwise shall impair any such right, power or
remedy, or be construed to be a waiver of any default or acquiescence therein.

 

18

 

37.                                 
Nothing in this Mortgage shall be construed as constituting the Mortgagee a
mortgagee in possession.

 

38.                                 Mortgagor
and mortgagee have had a full opportunity to review this agreement and have
either consulted with their own attorneys regarding the terms of this agreement
or specifically waived the right to do so. 
If there is ever a dispute regarding any provision of this agreement,
the parties agree that this agreement shall not be construed against either
Mortgagor or Mortgagee or the preparer thereof.  

 

39.                                 The
unenforceability or invalidity of any provision or provisions hereof shall not
render any other provision or provisions herein contained unenforceable or
invalid.

 

40.                                 This
Mortgage shall not be modified or amended unless such modification or amendment
is in writing and signed by both parties hereto. 

 

41.                                 This
Mortgage is the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or written
agreements regarding the subject matter hereof, except that nothing herein
shall supersede the Loan Documents, and to the extent that this Mortgage is
inconsistent with such Loan Documents, the Loan Documents shall be controlling.

 

IT IS SPECIFICALLY AGREED that time is of the essence of this contract
and that the waiver of the options, or obligations secured hereby, shall not,
at any time thereafter, be held to be abandonment of such rights.  Except as provided by applicable law, notice
of the exercise of any option granted to Mortgagee herein, or in the Loan
Documents secured hereby, is not required to be given.

 

ALL OF THE COVENANTS herein contained shall bind, and the benefits and
advantages thereof shall also inure to the respective heirs, executors,
administrators, successors and assigns of the parties hereto.  Whenever used, the singular number shall
include the plural, the plural the singular and the use of any gender shall
include all genders.

 

[SIGNATURE PAGE ON
FOLLOWING PAGE]

 

19

 

SIGNATURE PAGE TO

 

MORTGAGE

AND

SECURITY AGREEMENT

AND

FIXTURE FINANCING STATEMENT

 

IN WITNESS WHEREOF, the Mortgagor has signed and delivered this writing
the day and year first above written.

 

	
   

  	
  UNITED WISCONSIN
  GRAIN PRODUCERS, LLC

  
	
   

  	
   

  
	
   

  	
  /s/
  Kevin Roche

  	
   

  
	
   

  	
  By Kevin Roche

  
	
   

  	
  Its President

  

 

	
  STATE OF
  WISCONSIN

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF
  COLUMBIA

  	
  )

  

 

On this 26th day of February, 2004, before me, a Notary
Public within and for said County, personally appeared Kevin Roche, to me
personally known, who, being by me duly sworn did say that he is the President
of UNITED WISCONSIN GRAIN PRODUCERS, LLC, the limited liability company named
as Mortgagor in the foregoing instrument, and that he signed said instrument on
behalf of said limited liability company and as the free act and deed of said
limited liability company.

 

 

	
   

  	
  /s/
  Cynthia K. Blau

  
	
   

  	
  Print Name

  	
  Cynthia K. Blau

  	
   

  
	
   

  	
  Notary
  Public,                County,
  Wisconsin

  
	
   

  	
  My Commission
  [Expires]

  	
  11-27-05

  	
   

  
						

 

This instrument
was drafted by and after recording should be returned to:

 

JAMES W. FLORY

WILEY, COLBERT,
NURSENG,

  CRAY, HERRELL & FLORY, S.C.

21 SOUTH BARSTOW
STREET

P.O. BOX 629

EAU CLAIRE,  WI 
54702-0629

 

20

 

EXHIBIT A

 

Legal Description

 

Lot 1 of Certified
Survey Map No. 4050, recorded in the Columbia County Register of Deeds Office,
In volume 28 of Certified Survey Maps, page 44, as Document No. 697073, in the
Town of Randolph, Columbia County, Wisconsin, EXCEPT land described in Volume
187 of Deeds, page 374.

 

21

 

EXHIBIT B

 

Permitted Encumbrances

 

None.

 

22Exhibit
10.20

 

LETTER
AGREEMENT

 

March 15, 2004

 

	
  LENDER:

  AgStar Financial Services, PCA

  1921 Premier Drive

  Mankato, MN  56002

  	
   

  	
  BORROWER:

  United Wisconsin Grain Producers, LLC

  100 Richland Street

  Friesland, WI  53935

  

 

Gentlemen:

 

This letter agreement memorializes certain matters relating to the
Construction and Revolving Loan Agreement in the amount of $33,024,200.00 (the
“Loan”) being made by AgStar Financial Services, PCA to United Wisconsin Grain
Producers, LLC (the “Borrower”) in accordance with the loan agreement (the
“Loan Agreement”), promissory note, and other documents and agreements dated
February 26, 2004 related to the Loan (the “Loan Documents”).  Capitalized terms used and not defined in
this letter agreement shall have the meanings assigned to them in the Loan
Agreement.

 

We have discussed the fact that some of the
conditions and requirements of the Loan and Loan Documents remained outstanding
at the time the Loan Documents were executed. 
These items include, but are not limited to, the following:

 

1.                                       Intercreditor and Subordination Agreement
with Fagen, Inc., before any Advances are made under the Loan, if subordinated
debt is used;

 

2.                                       Executed Agreement with WPS Energy Services,
Inc.;

 

3.                                       Executed Agreement with Wisconsin Power
& Light Company;

 

4.                                       Copy of building permit as soon as
available;

 

5.                                       Copy of Tier II Stormwater Permit, as soon
as available;

 

6.                                       Copy of Stormwater PPP Permit, as soon as
available;

 

7.                                       Copy of BATF Permit, as soon as available;

 

8.                                       Update on EIS as soon as available;

 

9.                                       Procurement Agreements when available, if
any, and a Collateral Assignment of each such agreement;

 

10.                                 Ethanol Marketing Agreements when available,
if any, and a Collateral Assignment of each such agreement;

 

 

11.                                 DDGS Marketing Agreements when available, if
any, and a Collateral Assignment of each such agreement;

 

In accordance with Borrower’s requests,
Lender agreed to sign and deliver the Loan Documents on February 26,
2004.  Signature and delivery of the
Loan Documents by the Lender is not and shall not be deemed a waiver by the
Lender of any term, condition or requirement contained in the Loan Documents
for purposes of:  (i) any advance under
the Loan Documents; or (ii) constituting an event of default under the terms of
the Loan Documents.  That is,
notwithstanding the signature and delivery by the Lender of the Loan Documents,
all of the terms, conditions and requirements of the Loan Documents must be
satisfied prior to any advance of Loan proceeds being made under the Loan
Documents; and the Lender is not waiving or forgiving any event of default
under the Loan Documents constituted by the above referenced outstanding
conditions and requirements, and Lender expressly reserves the right to
exercise all remedies contained in the Loan Documents if, in its sole
discretion, such outstanding conditions and requirements are not complied with
in a timely and satisfactory fashion.

 

The Borrower understands and acknowledges
that the Lender’s signature and delivery of the Loan Documents is subject to the
production and/or execution of the above listed items.  Except for items 5, 6 and 7, to which
Borrower does not expect permits to be issued until after operations begin,
Borrower further acknowledges that Lender will be under no obligation to
advance any funds pursuant to the Loan Documents until Borrower meets the above
conditions to the satisfaction of Lender.

 

The undersigned agree to be bound to the terms and conditions of the
above letter, and have executed this letter as of the 15th day of
March, 2004.

 

	
  LENDER:

  	
   

  	
  BORROWER:

  
	
  AgStar Financial Services, PCA

  	
   

  	
  United Wisconsin Grain Producers, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Mark Schmidt

  	
   

  	
    /s/ Kevin Roche

  
	
  By Mark Schmidt

  	
   

  	
  By Kevin Roche

  
	
  Its Vice President

  	
   

  	
  Its President

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