EXHIBIT 10.2
BUSINESS LOAN AGREEMENT (ASSET BASED)
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PRINCIPAL LOAN DATE MATURITY LOAN NO CALL/COLL ACCOUNT OFFICER INITIALS
$1,000,000.00 03-11-2003 03-31-2004 54033 21/203 119284 EJ
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing "* * *" has been omitted
due to text length limitations.
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Grantor: HUSKER AG, LLC (TIN: 47-0836953) Lender: STEARNS BANK NATIONAL ASSOCIATION
54048 Highway 20 4191 SO 2ND ST
PLAINVIEW, NE 68769 PO BOX 7338
ST CLOUD, MN 56302
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THIS BUSINESS LOAN AGREEMENT (ASSET BASED) DATED MARCH 11, 2003, IS MADE AND
EXECUTED BETWEEN HUSKER AG, LLC ("BORROWER") AND STEARNS BANK NATIONAL.
ASSOCIATION (`LENDER") ON THE FOLLOWING TERMS AND CONDITIONS. BORROWER HAS
RECEIVED PRIOR COMMERCIAL LOANS FROM LENDER OR HAS APPLIED TO LENDER FOR A
COMMERCIAL LOAN OR LOANS OR OTHER FINANCIAL ACCOMMODATIONS, INCLUDING THOSE
WHICH MAY BE DESCRIBED ON ANY EXHIBIT OR SCHEDULE ATTACHED TO THIS AGREEMENT
("LOAN"). BORROWER UNDERSTANDS AND AGREES THAT: (A) IN GRANTING, RENEWING, OR
EXTENDING ANY LEAN, LENDER IS RELYING UPON BORROWER'S REPRESENTATIONS,
WARRANTIES, AND AGREEMENTS AS SET FORTH IN THIS AGREEMENT; (B) THE GRANTING,
RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE SUBJECT TO
LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL SUCH LOANS SHALL BE AND
REMAIN SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT.
TERM. This Agreement shall be effective as of March 11, 2003, and shall continue
in full force and effect until such time as all of Borrower's Loans in favor of
Lender have been paid in full, including principal, interest, costs, expenses,
attorneys' fees, and other fees and charges, or until such time as the parties
may agree in writing to terminate this Agreement.
ADVANCE AUTHORITY. The following persons currently are authorized, except as
provided in this paragraph, to request advances and authorize payments under the
line of credit until Lender receives from Borrower, at Lender's address shown
above, written notice of revocation of their authority: GARY KUESTER, Vice
Chairman of HUSKER AG, LLC; JACK FRAHM, Secretary of HUSKER AG, LLC; FRED
KNIEVEL, Treasurer of HUSKER AG, LLC; 0. KELLY HODSON, Chairman of HUSKER AG,
LLC; and ALLEN H SIEVERTSEN, General Manager of HUSKER AG, LLC.. NO REQUESTS FOR
ADVANCES WILL BE FUNDED THAT WOULD CAUSE THE LENDER TO EXCEED THEIR Legal.
LENDING LIMIT.
LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing
Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows:
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make any
Advance to or for the account of Borrower under this Agreement is subject
to the following conditions precedent with all documents, instruments,
opinions, reports, and other items required under this Agreement to be in
form and substance satisfactory to Lender:
(1) Lender shall have received evidence that this Agreement and all
Related Documents have been duly authorized, executed, and delivered
by Borrower to Lender.
(2) Lender shall have received such opinions of counsel,
supplemental opinions, and documents as Lender may request.
(3) The security interests in the Collateral shall have been duly
authorized, created, and perfected with first lien priority and shall
be in full force and effect.
(4) All guaranties required by Lender for the credit facility(ies)
shall have been executed by each Guarantor, delivered to Lender, and
be in full force and effect.
(5) Lender, at its option and for its sole benefit, shall have
conducted an audit of Borrower's Accounts, inventory, books, records,
and operations, and Lender shall be satisfied as to their condition.
(6) Borrower shall have paid to Lender all fees, costs, and expenses
specified in this Agreement and the Related Documents as are then due
and payable.
(7) There shall not exist at the time of any Advance a condition
which would constitute an Event of Default under this Agreement, and
Borrower shall have delivered to Lender the compliance certificate
called for in the paragraph below titled "Compliance Certificate."
MAKING LOAN ADVANCES. Advances under this credit facility, as well as
directions for payment from Borrower's accounts, may be requested orally
or in writing by authorized persons. Lender may, but need not, require
that all oral requests be confirmed in writing. Each Advance shall be
conclusively deemed to have been made at the request of and for the
benefit of Borrower (1) when credited to any deposit account of Borrower
maintained with Lender or (2) when advanced in accordance with the
instructions of an authorized person. Lender, at its option, may set a
cutoff time, after which all requests for Advances will be treated as
having been requested on the next succeeding Business Day.
MANDATORY LOAN REPAYMENTS. If at any time the aggregate principal amount
of the outstanding Advances shall exceed the applicable Borrowing Base,
Borrower, immediately upon written or oral notice from Lender, shall pay
to Lender an amount equal to the difference between the outstanding
principal balance of the Advances and the Borrowing Base. On the
Expiration Date, Borrower shall pay to Lender in full the aggregate
unpaid principal amount of all Advances then outstanding and all accrued
unpaid interest, together with all other applicable fees, costs and
charges, if any, not yet paid.
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 2
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LOAN ACCOUNT. Lender shall maintain on its books a record of account in
which Lender shall make entries for each Advance and such other debits
and credits as shall be appropriate in connection with the credit
facility. Lender shall provide Borrower with periodic statements of
Borrower's account, which statements shall be considered to be correct
and conclusively binding on Borrower unless Borrower notifies Lender to
the contrary within thirty (30) days after Borrower's receipt of any such
statement which Borrower deems to be incorrect.
COLLATERAL. To secure payment of the Primary Credit Facility and performance of
all other Loan, obligations and duties owed by Borrower to Lender, Borrower (and
others, if required) shall grant to Lender Security Interests in such property
and assets as Lender may require. Lender's Security Interests in the Collateral
shall be continuing liens and shall include the proceeds and products of the
Collateral, including without limitation the proceeds of any insurance. With
respect to the Collateral, Borrower agrees and represents and warrants to
Lender:
PERFECTION OF SECURITY INTERESTS. Borrower agrees to execute financing
statements and all documents perfecting Lender's Security Interest and to
take whatever other actions are requested by Lender to perfect and
continue Lender's Security Interests in the Collateral. Upon request of
Lender, Borrower will deliver to Lender any and all of the documents
evidencing or constituting the Collateral, and Borrower will note
Lender's interest upon any and all chattel paper and instruments if not
delivered to Lender for possession by Lender. Contemporaneous with the
execution of this Agreement, Borrower will execute one or more UCC
financing statements and any similar statements as may be required by
applicable law, and Lender will file such financing statements and all
such similar statements in the appropriate location or locations.
Borrower hereby appoints Lender as its irrevocable attorney-in-fact for
the purpose of executing any documents necessary to perfect or to
continue any Security Interest.
Lender may at any time, and without further authorization from Borrower,
file a carbon, photograph, facsimile, or other reproduction of any
financing statement for use as a financing statement. Borrower will
reimburse Lender for all expenses for the perfection, termination, and
the continuation of the perfection of Lenders security interest in the
Collateral. Borrower promptly will notify Lender before any change in
Borrower's name including any change to the assumed business names of
Borrower. Borrower also promptly will notify Lender before any change in
Borrower's Social Security Number or Employer Identification Number.
Borrower further agrees to notify Lender in writing prior to any change
in address or location of Borrower's principal governance office or
should Borrower merge or consolidate with any other entity.
COLLATERAL RECORDS. Borrower does now, and at all times hereafter shall,
keep correct and accurate records of the Collateral, all of which records
shall be available to Lender or Lender's representative upon demand for
inspection and copying at any reasonable time. With respect to the
Accounts, Borrower agrees to keep and maintain such records as Lender may
require, including without limitation information concerning Eligible
Accounts and Account balances and agings. Records related to Accounts
(Receivables) are or will be located at BORROWER'S OFFICE. With respect
to the inventory, Borrower agrees to keep and maintain such records as
Lender may require, including without limitation information concerning
Eligible Inventory and records itemizing and describing the kind, type,
quality, and quantity of Inventory, Borrower's Inventory costs and
selling prices, and the daily withdrawals and additions to Inventory.
Records related to inventory are or will be located at BORROWER'S OFFICE.
The above is an accurate and complete list of all locations at which
Borrower keeps or maintains business records concerning Borrower's
collateral.
COLLATERAL SCHEDULES. Concurrently with the execution and delivery or
this Agreement. Borrower shall execute and deliver to Lender schedules of
Accounts and Inventory and schedules of Eligible Accounts and Eligible
Inventory in form and substance satisfactory to the Lender. Thereafter
supplemental schedules shall be delivered according to the following
schedule: With respect to Eligible Accounts, schedules shall be delivered
MONTHLY -- AND WITH EACH ADVANCE REQUEST AS REQUIRED BY LENDER. With
respect to Eligible Inventory, schedules shall be delivered MONTHLY --
AND WITH EACH ADVANCE REQUEST AS REQUIRED BY LENDER.
REPRESENTATIONS AND WARRANTIES CONCERNING ACCOUNTS. With respect to the
Accounts, Borrower represents and warrants to Lender: (1) Each Account
represented by Borrower to be an Eligible Account for purposes of this
Agreement conforms to the requirements of the definition of an Eligible
Account; (2) All Account information listed on schedules delivered to
Lender will be true and correct, subject to immaterial variance; and (3).
Lender, its assigns, or agents shall have the right at any time and at
Borrower's expense to inspect, examine, and audit Borrower's records and
to confirm with Account Debtors the accuracy of such Accounts.
REPRESENTATIONS AND WARRANTIES CONCERNING INVENTORY. With respect to the
Inventory, Borrower represents and warrants to Lender: (1) All Inventory
represented by Borrower to be Eligible Inventory for purposes of this
Agreement conforms to the requirements of the definition of Eligible
Inventory; (2) All Inventory values listed on schedules delivered to
Lender will be true and correct, subject to immaterial variance; (3) The
value of the Inventory will be determined on a consistent accounting
basis; (4) except as agreed to the contrary by Lender in writing, all
Eligible Inventory is now and at all times hereafter will be in
Borrower's physical possession and shall not be held by others on
consignment., sale on approval, or sale or return; (5) Except as
reflected in the Inventory schedules delivered to Lender, all Eligible
Inventory is now and at all times hereafter will be of good and
merchantable quality free from defects; (6) Eligible inventory is not now
and will not at any time hereafter be stored with a bailee, warehouseman,
or similar party without Lender's prior written consent, and, in such
event, Borrower will concurrently at the time of bailment cause any such
bailee, warehouseman, or similar party to issue and deliver to Lender, in
form acceptable to Lender, warehouse receipts in Lender name evidencing
the storage of Inventory; and (7) Lender,. its assigns, or agents shall
have the right at any time and at Borrower's expense to inspect and
examine the inventory and to check and test the same as to quality,
quantity, value, and condition.
NOTIFICATION BASIS. Borrower agrees and understands that this Loan shall
be on a notification basis pursuant to which Lender shall directly
collect and receive all proceeds and payments from the Accounts in which
Lender has a security interest. In order to facilitate the foregoing,
Borrower agrees to deliver to Lender, upon demand, any and all of
Borrower's records, ledger sheets, payment cards, and other
documentation, in the form requested by Lender, with regard to the
Accounts. Borrower further agrees that Lender shall have the right to
notify each Account Debtor, pay such proceeds and payments directly to
Lender, and to do any and all other things as Lender may deem to be
necessary and appropriate, within its sole discretion, to carry out the
terms and intent of this Agreement. Lender shall have the further right,
where appropriate and within Lender's sole discretion, to file suit,
either in its own name or in the name of Borrower, to collect any and all
such Accounts. Borrower further agrees that Lender may take such other
actions, either in Borrower's name or Lender's name, as Lender may deem
appropriate within its sole judgment, with regard to collection and
payment of the Accounts without affecting the liability of Borrower under
this Agreement or on the indebtedness.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.
LOAN DOCUMENTS. Borrower shall provide to Lender the following documents
for the Loan: (1) the Note; (2) Security Agreements granting to Lender
security interests in the Collateral; (3) financing statements and all
other documents perfecting Lender's Security Interests; (4) evidence of
insurance as required below; (5) together with all such Related Documents
as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender's counsel.
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 3
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BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and
the Related Documents. in addition Borrower shall have provided such
other resolutions, authorizations, documents and instruments as Lender or
its counsel, may require.
FEES AND EXPENSES UNDER THIS AGREEMENT. Borrower shall have paid to
Lender all fees, costs, and expenses specified in this Agreement and the
Related Documents as are then due and payable.
REPRESENTATIONS AND WARRANTIES. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and
correct.
NO EVENT OF DEFAULT. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this Agreement
or under any Related Document.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists:
ORGANIZATION. Borrower is a limited liability company which is, and at
all times shall be, duly organized, validly existing, and in good
standing under and by virtue of the laws of the State of Nebraska.
Borrower is duly authorized to transact business in all other states in
which Borrower is doing business, having obtained all necessary filings,
governmental licenses and approvals for each state in which Borrower is
doing business. specifically. Borrower is, and at all times shall be,
duly qualified as a foreign limited liability company in all states in
which the failure to so qualify would have a material adverse effect on
its business or financial condition. Borrower has the full power and
authority to own its properties and transact the business in which it is
presently engaged or presently proposes to engage. Borrower maintains an
office at 54048 HIGHWAY 20, PLAINVIEW, NE 68769. Unless Borrower has
designated otherwise in writing. the principal office is the office at
which Borrower keeps its books and records including its records
concerning the Collateral. Borrower will notify Lender prior to any
change in the location of Borrower's state of organization or any change
in Borrower's name. Borrower shall do all things necessary to preserve
and to keep in full force and effect its existence, rights and
privileges, and shall comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental or quasi-governmental
authority or court applicable to Borrower and Borrower's business
activities.
ASSUMED BUSINESS NAMES. Borrower has filed or recorded all documents or
filings required by law relating to all assumed business names used by
Borrower. Excluding the name of Borrower, the following is a complete
list of all assumed business names under which Borrower does business:
None.
AUTHORIZATION. Borrower's execution, delivery. and performance of this
Agreement and all the Related Documents have been duly authorized by all
necessary action by Borrower and do not conflict with, result in a
violation of, or constitute a default under (1) any provision of
Borrower's articles of organization or membership agreements, or any
agreement or other instrument binding upon Borrower or (2) any law,
governmental regulation, court decree, or order applicable to Borrower or
to Borrower's properties.
FINANCIAL INFORMATION. Each of Borrower's financial statements supplied
to Lender truly and completely disclosed Borrower's financial condition
as of the date of the statement, and there has been no material adverse
change in Borrower's financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such financial
statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender and
as accepted by Lender, and except for property tax liens for taxes not
presently due and payable, Borrower owns and has good title to all of
Borrower's properties free and clear of all Security interests, and has
not executed any security documents or financing statements relating to
such properties. All of Borrower's properties are titled in Borrower's
legal name, and Borrower has not used or filed a financing statement
under any other name for at least the last five (5) years.
HAZARDOUS SUBSTANCES. Except as disclosed to and acknowledged by Lender
in writing, Borrower represents and warrants that: (1) During the period
of Borrower's ownership of Borrower's Collateral, there has been no use,
generation, manufacture, storage, treatment, disposal, release or
threatened release of any Hazardous Substance by any person on, under,
about or from any of the Collateral. (2) Borrower has no knowledge of, or
reason to believe that there has been (a) any breach or violation of any
Environmental Laws; (b) any use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any Hazardous
Substance on, under, about or from the Collateral by any prior owners or
occupants of any of the Collateral; or (c) any actual or threatened
litigation or claims of any kind by any person relating to such matters.
(3) Neither Borrower nor any tenant, contractor, agent or other
authorized user of any of the Collateral shall use, generate,
manufacture, store, treat, dispose of or release any Hazardous Substance
on, under, about or from any of the Collateral; and any such activity
shall be conducted in compliance with all applicable federal, state, and
local laws, regulations, and ordinances, including without limitation all
Environmental Laws. Borrower authorizes Lender and its agents to enter
upon the Collateral to make such inspections and tests as Lender may deem
appropriate to determine compliance of the Collateral with this section
of the Agreement. Any inspections or tests made by Lender shall be at
Borrower's expense and for Lender's purposes only and shall not be
construed to create any responsibility or liability on the part of Lender
to Borrower or to any other person. The representations and warranties
contained herein are based on Borrower's due diligence in investigating
the Collateral for hazardous waste and Hazardous Substances. Borrower
hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for
cleanup or other costs under any such laws, and (2) agrees to indemnify
and hold harmless Lender against any and all claims, losses, liabilities,
damages, penalties, and expenses, including attorneys fees, consultants'
fees, and costs which Lender may directly or indirectly sustain or suffer
resulting from a breach of this section of the Agreement or as a
consequence of any use, generation, manufacture, storage, disposal,
release or threatened release of a hazardous waste or substance on the
Collateral. The provisions of this section of the Agreement, including
the obligation to indemnity, shall survive the payment of the
indebtedness and the termination, expiration or satisfaction of this
Agreement and shall not be affected by Lender's acquisition of any
interest in any of the Collateral, whether by foreclosure or otherwise.
LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event has
occurred which may materially adversely affect Borrower's financial
condition or properties, other than litigation, claims, or other events,
if any, that have been disclosed to and acknowledged by Lender in
writing.
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 4
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TAXES. To the best of Borrower's knowledge, all of Borrower's tax returns
and reports that are or were required to be filed, have been filed, and
all taxes, assessments and other governmental charges have been paid in
full, except those presently being or to be contested by Borrower in good
faith in the ordinary course of business and for which adequate reserves
have been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
interests on or affecting any of the Collateral directly or indirectly
securing repayment of Borrower's Loan and Note, that would be prior or
that may in any way be superior to Lender's Security interests and rights
in and to such Collateral.
BINDING EFFECT. This Agreement, the Note, all Security Agreements (if
any), and all Related Documents are binding upon the signers thereof as
well as upon their successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:
NOTICES OF CLAIMS AND LITIGATION. Promptly inform Lender in writing of
(1) all material adverse changes in Borrower's financial condition, and
(2) all existing and all threatened litigation, claims, investigations,
administrative proceedings or similar actions affecting Borrower or any
Guarantor which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records in accordance with
GAAP, applied on a consistent basis, and permit Lender to examine and
audit Borrower's books and records at all reasonable times.
FINANCIAL STATEMENTS. Furnish Lender with the following:
ANNUAL STATEMENTS. As soon as available, but in no event later than
one-hundred-twenty (120) days after the end of each fiscal year,
Borrower's balance sheet and income statement for the year ended,
audited by a certified public accountant satisfactory to Lender.
INTERIM STATEMENTS. AS SOON AS AVAILABLE, BUT IN NO EVENT LATER
THAN THIRTY (30) DAYS AFTER THE END OF EACH MONTH, BORROWER'S
BALANCE SHEET AND PROFIT AND LOSS STATEMENT FOR THE PERIOD ENDED,
PREPARED BY BORROWER IN FORM SATISFACTORY TO LENDER.
TAX RETURNS. As soon as available after the applicable filing date
for the tax reporting period ended, Federal and other governmental
tax returns, prepared by a tax professional satisfactory to Lender.
ADDITIONAL REQUIREMENTS. SEMI-ANNUAL ACCOUNT RECEIVABLE/PAYABLE
LISTING; ANNUAL EQUIPMENT LIST AND BUDGET PROJECTIONS.
All financial reports required to be provided under this Agreement shall
be prepared in accordance with GAAP, applied on a consistent basis, and
certified by Borrower to be true and correct.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, as Lender may request from time to time.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to
Borrower's properties and operations, in form, amounts, coverages and
with insurance companies acceptable to Lender. Borrower, upon request of
Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without
at least thirty (30) days prior written notice to Lender.. Each insurance
policy also shall include an endorsement providing that coverage in favor
of Lender will not be impaired in any way by any act, omission or default
of Borrower or any other person. In connection with all policies covering
assets in which Lender holds or is offered a security interest for the
Loans, Borrower will provide Lender with such lender's loss payable or
other endorsements as Lender may require.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
each existing insurance policy showing such information as Lender may
reasonably request, including without limitation the following: (1) the
name or the insurer; (2) the risks insured; (3) the amount of the policy;
(4) the properties insured; (5) the then current property values on the
basis of which insurance has been obtained, and the manner of determining
those values; and (6) the expiration date of the policy. In addition,
upon request of Lender (however not more often than annually), Borrower
will have an independent appraiser satisfactory to Lender determine, as
applicable, the actual cash value or replacement cost of any Collateral.
The cost of such appraisal shall be paid by Borrower.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary
by Lender in writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every kind
and nature, imposed upon Borrower or its properties, income, or profits,
prior to the date on which penalties would attach, and at lawful claims
that, if unpaid, might become a lien or charge upon any of Borrower's
properties, income, or profits.
PERFORMANCE. Perform and comply, in a timely manner, with all terms,
conditions, and provisions set forth in this Agreement, in the Related
Documents, and in all other instruments and agreements between Borrower
and Lender. Borrower shall notify Lender immediately in writing of any
default in connection with any agreement.
OPERATIONS. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender of
any change in executive and management personnel; conduct its business
affairs in a reasonable and prudent manner.
ENVIRONMENTAL STUDIES. Promptly conduct and complete, at Borrower's
expense, all such investigations, studies, samplings and testings as may
be requested by Lender or any governmental authority relative to any
substance, or any waste or by-product of any substance defined as toxic
or a hazardous substance under applicable federal, state, or local law
rule, regulation, order or directive, at or affecting any property or any
facility owned, leased or used by Borrower.
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 5
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COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Comply with all laws,
ordinances, and regulations, now or hereafter in effect, of all
governmental authorities applicable to the conduct of Borrower's
properties, businesses and operations, and to the use or occupancy of the
Collateral, including without limitation, the Americans With Disabilities
Act. Borrower may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Borrower has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Collateral are not jeopardized. Lender may require
Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.
INSPECTION. Permit employees or agents of Lender at any reasonable time
to inspect any and all Collateral for the Loan or Loans and Borrower's
other properties and to examine or audit Borrower's books, accounts, and
records and to make copies and memoranda of Borrower's books, accounts,
and records. If Borrower now or at any time hereafter maintains any
records (including without limitation computer generated records and
computer software programs for the generation of such records) in the
possession of a third party, Borrower, upon request of Lender, shall
notify such party to permit Lender free access to such records at all
reasonable times and to provide Lender with copies of any records it may
request, all at Borrower's expenSE.
COMPLIANCE CERTIFICATES. Unless waived in writing by Lender, provide
Lender at least annually, with a certificate executed by Borrower's chief
financial officer, or other officer or person acceptable to Lender,
certifying that the representations and warranties set forth in this
Agreement are true and correct as of the date of the certificate and
further certifying that, as of the date of the certificate, no Event of
Default exists under this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with any and all Environmental Laws; not cause or permit to
exist, as a result of an intentional or unintentional action or omission
on Borrower's part or on the part of any third party, on property owned
and/or occupied by Borrower, any environmental activity where damage may
result to the environment, unless such environmental activity is pursuant
to and in compliance with the conditions of a permit issued by the
appropriate federal, state or local governmental authorities; shall
furnish to Lender promptly and in any event within thirty (30) days after
receipt thereof a copy of any notice, summons, lien, citation, directive,
letter or other communication from any governmental agency or
instrumentality concerning any intentional or unintentional action or
omission on Borrower's part in connection with any environmental activity
whether or not there is damage to the environment and/or other natural
resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes mortgages, deeds of trust, security agreements,
assignments, financing statements, instruments, documents and other
agreements as Lender or its attorneys may reasonably request to evidence
and secure the Loans and to perfect all Security interests.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Borrower falls to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Borrower's failure to discharge or pay when due any amounts
Borrower is required to discharge or pay under this Agreement or any Related
Documents, Lender on Borrower's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on any Collateral and paying all
costs for insuring, maintaining and preserving any Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Borrower. All such expenses will become a
part of the indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
INDEBTEDNESS AND LIENS. (1) except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume indebtedness for borrowed money,
including capital leases, (2) sell, transfer, mortgage, assign, pledge,
lease, grant a security interest in, or encumber any of Borrower's assets
(except as allowed as Permitted Liens), or (3) sell with recourse any of
Borrower's accounts, except to Lender.
CONTINUITY OF OPERATIONS. (1) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (2) cease operations, liquidate, merge,. transfer, acquire or
consolidate with any other entity, change its name, dissolve or transfer
or sell Collateral out of the ordinary course of business, or (B) make
any distribution with respect to any capital account, whether by
reduction of capital or otherwise.
LOANS, ACQUISITION, AND GUARANTIES. (1) Loan, invest in or advance money
or assets, (2) purchase, create or acquire any interest in any other
enterprise or entity, or (3) incur any obligation as surety or guarantor
other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(A) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes
incompetent or becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse
change In Borrower's financial condition, in the financial condition of any
Guarantor, or in the value of any Collateral securing any Loan; or (D) any
Guarantor seeks, claims or otherwise attempts to limit modify or revoke such
Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in
good faith deems itself insecure, even though no Event of Default shall have
occurred.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or same other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.
DEFAULT. Each of the following shall constitute an Event of Default under this
Agreement:
PAYMENT DEFAULT. Borrower falls to make any payment when due under the
Loan..
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 6
================================================================================
OTHER DEFAULTS. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement or in
any of the Related Documents or to comply with or to perform any term,.
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Borrower or any Grantor defaults under
any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or
person that may materially affect any of Borrower or any Grantor's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of the
Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower's behalf under this
Agreement or the Related Documents is false or misleading in any material
respect either now or at the time made or furnished or becomes false or
misleading at any time thereafter.
DEATH OR INSOLVENCY. The dissolution of Borrower (regardless of whether
election to continue is made), any member withdraws from Borrower, or any
ether termination of Borrower's existence as a going business or the
death of any member, the Insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the
benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or
lien) at any time and for any reason.
CREDITOR OR FORFEITURE PROCEEDING. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by any
governmental agency against any collateral securing the Loan. This
includes a garnishment or any of Borrowers accounts, Including deposit
accounts, with Lender. However, this event of Default shall not apply if
there is a good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor dies
or becomes Incompetent, or revokes or disputes the validity of, or
liability under, any Guaranty of the Indebtedness. in the event of a
death, Lender, at its option, may, but shall not be required to, permit
the guarantor's estate to assume unconditionally the obligations arising
under the guaranty in a manner satisfactory to Lender, and, in doing so,
cure any Event of Default.
ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
condition or Lender believes the prospect of payment or performance of
the Loan is impaired.
INSECURITY. Lender in good Faith believes itself insecure.
RIGHT TO CURE. If any default, other than a default on indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been
given notice of a similar default within the preceding twelve (12)
months, it may be cured (and no Event of Default will have occurred) if
Borrower or Grantor, as the case may be, after receiving written notice
from Lender demanding cure of such default: (1) cure the default within
fifteen (15) days; or (2) It the cure requires more than fifteen (15)
days, immediately initiate steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter continue
and complete all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
further Loan Advances or disbursements), and, at Lender's option, all
indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy. and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment to
this Agreement shall be effective unless given in writing and signed by
the party or parties sought to be charged or bound by the alteration or
amendment.
ATTORNEYS' FEES; EXPENSES. Borrower agrees to pay upon demand all of
Lender's costs and expenses, including Lender's reasonable attorneys'
fees and Lender's legal expenses, incurred in connection with the
enforcement of this Agreement. Lender may hire or pay someone else to
help enforce this Agreement, and Borrower shall pay the costs and
expenses of such enforcement. Costs and expenses include Lender's
reasonable attorneys' fees and legal expenses whether or not there is a
lawsuit, including reasonable attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Borrower also shall pay all court costs and such
additional fees as may be directed by the court.
CAPTION HEADINGS. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Agreement.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loan to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any
other mailer relating to the Loan. and Borrower hereby waives any rights
to privacy Borrower may have with respect to such matters. Borrower
additionally
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 7
================================================================================
waives any and all notices of sale of participation interests, as well as
all notices of any repurchase of such participation interests. Borrower
also agrees that the purchasers of any such participation interests will
be considered as the absolute owners of such interests in the Loan and
will have all the rights granted under the participation agreement or
agreements governing the sale of such participation interests.. Borrower
further waives all rights of offset or counterclaim that it may have
now or later against Lender or against any purchaser of such a
participation interest and unconditionally agrees that either Lender
or such purchaser may enforce Borrower's obligation under the Loan
irrespective of the failure or insolvency of any holder of any interest
in the Loan. Borrower further agrees that the purchaser of any such
participation interests may enforce its interests irrespective of any
personal claims or defenses that Borrower may have against Lender.
GOVERNING LAW. This Agreement will be governed by, construed and
enforced in accordance with federal law and the laws of the State of
Minnesota. This Agreement has been accepted by Lender in the state
of Minnesota.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights
under this Agreement unless such waiver is given 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
by Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this Agreement.
No prior waiver by Lender, nor any course of dealing between Lender and
Borrower, or between Lender and any Grantor, shall constitute a waiver of
any of Lender's rights or of any of Borrower's or any Grantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Agreement, the granting of such consent by Lender
in any instance shall riot constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent
may be granted or withheld in the sole discretion of Lender.
NOTICES. Any notice required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law),
when deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class,
certified or registered mail postage prepaid, directed to the addresses
shown near the beginning of this Agreement. Any party may change its
address for notices under this Agreement by giving formal written notice
to the other parties, specifying that the purpose of the notice is to
change the party's address. For notice purposes, Borrower agrees to keep
Lender informed at all times of Borrower's current address. Unless
otherwise provided or required by law, if there is more than one
Borrower, any notice given by Lender to any Borrower is deemed to be
notice given to all Borrowers.
SEVERABILITY. If a court or competent jurisdiction finds any provision of
this Agreement to be illegal, invalid or unenforceable as to any
circumstance, that finding shall not make the offending provision
illegal, invalid, or unenforceable as to any other circumstance. If
feasible, the offending provision shall be considered modified so that it
becomes legal, valid and enforceable. If the offending provision cannot
be so modified, it shall be considered deleted from this Agreement.
Unless otherwise required by law, the illegality, invalidity, or
unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this
Agreement.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
provisions of this Agreement makes it appropriate, including without
limitation any representation, warranty or covenant, the word "Borrower"
as used in this Agreement shall include all of Borrower's subsidiaries
and affiliates. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to make
any Loan or other financial accommodation to any of Borrower's
subsidiaries or affiliates.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind Borrower's successors and assigns and shall
inure to the benefit of Lender and its successors and assigns. Borrower
shall not, however, have the right to assign Borrower's rights under this
Agreement or any interest therein, without the prior written consent of
Lender,
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
agrees that in extending Loan Advances. Lender is relying on all
representations, warranties, and covenants made by Borrower in this
Agreement or in any certificate or other instrument delivered by Borrower
to Lender under this Agreement or the Related Documents. Borrower further
agrees that regardless of any investigation made by Lender, all such
representations, warranties and covenants will survive the extension of
Loan Advances and delivery to Lender of the Related Documents, shall be
continuing in nature, shall be deemed made and related by Borrower at the
time each Loan Advance is made, and shall remain in full force and effect
until such time as Borrower's indebtedness shall be paid in full or until
this Agreement shall be terminated in the manner provided above,
whichever is the last to occur.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVE JURY. All parties to this Agreement hereby waive the right to any
jury trial In any action, proceeding, or counterclaim brought by any
party against any other party.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. Accounting
words and terms not otherwise defined in this Agreement shall have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date of this Agreement!
ACCOUNT. The word "Account" means a trade account, account receivable,
other receivable, or other right to payment for goods sold or services
rendered owing to Borrower (or to a third party grantor acceptable to
Lender).
ACCOUNT DEBTOR.The words "Account Debtor" mean the person or entity
obligated upon an Account.
ADVANCE. The word "Advance" means a disbursement of Loan funds made, or
to be made, to Borrower or on Borrower's behalf under the terms and
conditions of this Agreement.
AGREEMENT. The word "Agreement" means this Business Loan Agreement (Asset
Based), as this Business Loan Agreement (Asset Based) may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Business Loan Agreement (Asset Based) from time to time.
BORROWER. The word "Borrower" means HUSKER AG, LLC, and all other
persons and entitles signing the Note in whatever capacity.
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 8
================================================================================
BORROWING BASE. The words "Borrowing Base" mean as determined by Lender
from time to time, the lesser of (1) $1,000,000.00, less any issued
Letters of Credit not cash secured or (2) the sum of (a) 50.00% of the
aggregate amount of Eligible Accounts, plus (b) 50.00% of the aggregate
amount of Eligible Inventory.
BUSINESS DAY. The words Business Day" mean a day on which commercial
banks are open in the State of Minnesota.
COLLATERAL. The word "Collateral" means all property and assets granted
as collateral security for a Loan, whether real or personal property,
whether granted directly or indirectly, whether granted now or in the
future, and whether granted in the form of a security interest, mortgage,
collateral mortgage, deed of trust, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel trust, factor's
lien, equipment trust, conditional sale, trust receipt, lien, charge,
lien or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever,
whether created by law, contract, or otherwise. The word Collateral also
includes without limitation all collateral described in the Collateral
section of this Agreement.
ELIGIBLE ACCOUNTS. The words "Eligible Accounts" mean at any time, all of
Borrower's Accounts which contain selling terms and conditions acceptable
to Lender. The net amount of any Eligible Account against which Borrower
may borrow shall exclude all returns, discounts, credits, and offsets of
any nature. Unless otherwise agreed to by Lender in writing, Eligible
Accounts do not include:
(1) Accounts with respect to which the Account Debtor is a member,
employee or agent of Borrower.
(2) Accounts with respect to which the Account Debtor is affiliated
with Borrower.
(2) Accounts with respect to which goods are placed on consignment,
guaranteed sale, or other terms by reason of which the payment by
the Account Debtor may be conditional.
(4) Accounts with respect to which Borrower is or may become liable
to the Account Debtor for goods sold or services rendered by the
Account Debtor to Borrower.
(5) Accounts which are subject to dispute, counterclaim., or
setoff.,
(6) Accounts with respect to which the goods have not been shipped
or delivered, or the services have not been rendered to the Account
Debtor.
(7) Accounts with respect to which Lender, in its sole discretion,
deems the creditworthiness or financial condition of the Account
Debtor to be unsatisfactory.
(8) Accounts of any Account Debtor who has filed or has had filed
against it a petition in bankruptcy or an application for relief
under any provision of any state or federal bankruptcy, insolvency,
or debtor-in-relief acts; or who has had appointed a trustee,
custodian, or receiver for the assets of such Account Debtor; or
who has made an assignment for the benefit of creditors or has
become insolvent or fails generally to pay its debts (including its
payrolls) as such debts become due.
(9) Accounts which have not been paid in full within 90 DAYS from
the invoice date.
ELIGIBLE INVENTORY. The words "Eligible Inventory" mean at any time,
all of Borrower's Inventory as defined below except:
(1) Inventory which is not owned by Borrower free and clear of all
security interests, liens, encumbrances, and claims of third
parties.
(2) Inventory which Lender, in its sole discretion, deems to be
obsolete, unsalable, damaged, defective, or unfit for further
processing.
(3) Work in progress.
ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and
all state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1990, as amended,
42 U.S.C. Section 9601, ET SEQ. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1966, Pub. L. No. 99-499 ("SARA"). the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
ET SEQ., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, ET SEQ., or other applicable state or federal laws,
rules, or regulations adopted pursuant thereto or common law,
and shall also include pollutants, contaminants, polychlorinated
biphenyls, asbestos, urea formaldehyde, petroleum and petroleum
products, and agricultural chemicals.
EVENT OF DEFAULT. The words "Event of Default" mean any of the events
of default set forth in this Agreement in the default section of this
Agreement.
EXPIRATION DATE. The words "Expiration Date" mean the date of
termination of Lender's commitment to lend under this Agreement.
GAAP. The word "GAAP" means generally accepted accounting principles.
GRANTOR. The word `Grantor' means each and all of the persona or
entities granting a Security interest in any Collateral for
the Loan, including without limitation all Borrowers granting such
a Security Interest.
GUARANTOR. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Loan.
GUARANTY. The word "Guaranty" means the guaranty from Guarantor
to Lender, including without limitation a guaranty of all
or part of the Note.
HAZARDOUS SUBSTANCES. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential
hazard to human health or the environment when improperly used,
treated, stored, disposed of, generated, manufactured, transported or
otherwise handled. The words "Hazardous Substances" are used in their
very
BUSINESS LOAN AGREEMENT (ASSET BASED)
Loan No. 54033 (Continued) Page 9
================================================================================
broadest sense and include without limitation any and all hazardous
or toxic substances, materials or waste as defined by or listed under
the Environmental Laws. The term "Hazardous Substances" also
includes, without limitation petroleum and petroleum by-products
or any fraction thereof and asbestos.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced
by the Note or Related Documents, including all principal and interest
together with all other indebtedness and costs and expenses for which
Borrower is responsible under this Agreement or under any of the
Related Documents.
INVENTORY. The word "Inventory" means all of Borrower's raw materials,
work in progress of every kind and description, and goods held for sale
or lease or furnished under contracts of service in which Borrower now
has or hereafter acquires any right, whether held by Borrower or
others, and all documents of title, warehouse receipts, bills of
lading, and all other documents of every type covering all or any part
of the foregoing Inventory includes inventory temporarily out of
Borrower's custody or possession and all returns on Accounts.
LENDER. The word "Lender" means STEARNS BANK NATIONAL ASSOCIATION, its
successors and assigns.
LOAN. The word "Loan" means any and all loans and financial
accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, Including without limitation those
loans and financial accommodations described herein or described on any
exhibit or schedule attached to this Agreement from time to time.
NOTE. The word "Note" means the Note excluded by HUSKER AG, LLC in the
principal amount of $1,000,000.00 dated March 11, 2003 together with
all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutior~5 for the note or credit agreement.
Permitted Liens. The words "Permitted Liens" mean (I) liens and
security interests securing indebtedness owed by Borrower to Lender,
(2) liens for taxes, assessments, or similar charges either not yet due
or being contested in good faith (3) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary
course of business and securing obligations which are not yet
delinquent; (4) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in the
ordinary course of business 10 secure Indebtedness outstanding on the
date of this Agreement or permitted to be Incurred under the paragraph
of this Agreement titled "indebtedness and Liens"; f5j liens and
security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender In writing; and (6) those liens
and security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of
6orrower's assets.
PRIMARY CREDIT FACILITY. The words "Primary Credit Facility" mean the
credit facility described in the Line of Credit section of this
Agreement..
RELATED DOCUMENTS. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Loan.
SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
SECURITY INTEREST. The words "Security Interest" mean, without
limitation, any and all types of collateral security, present and
future, whether in the form of a lien, charge, encumbrance, mortgage,
deed of trust, security deed, assignment, pledge, crop pledge, chattel
mortgage, collateral chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien or title
retention contract, lease or consignment intended as a security device,
or any other security or lien interest whatsoever, whether created by
law, contract, or otherwise.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINES5 LOAN
AGREEMENT (A5SET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN
AGREEMENT (ASSET BASED) IS DATED MARCH 11, 2003.
BORROWER:
BY:/S/ GARY KUESTER (SEAL) BY:/S/ JACK G. FRAHM (SEAL)
---------------------------- --------------------------
GARY KUESTER, CHAIRMAN OF JACK FRAHM, SECRETARY OF
HUSKER AG, LLC HUSKER AG, LLC
BY:/S/ FREDRICK KNEIVEL (SEAL) BY:/S/ O. KELLY HODSON (SEAL)
---------------------------- --------------------------
FRED KNIEVEL, O. KELLY HODSON,
TREASURER OF HUSKER AG, LLC CHAIRMAN OF HUSKER AG, LLC