Security Agreement

Security Agreement with Farm Products as Collateral

Security Agreement made on the day of , 20 , between (Debtor) of (street address, city, county, state, zip code), referred to herein as Debtor, and (Secured Party), a corporation organized and existing under the laws of the state of , with its principal office located at (street address, city, county, state, zip code), referred to herein as Secured Party.

Now, therefore, for and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

I. Creation of Security Interest and Obligations Secured

Debtor grants to Secured Party a security interest in the collateral described below and each separate kind and item of the collateral, to secure payment of the following obligations:

A. The Promissory Note (Note) of even date with this Agreement, executed by Debtor to Secured Party, or order, together with interest as provided in such Note.

B. All rentals now or later due from Debtor to Secured Party for the real property referred to below or any other real property.

C. All other liabilities of Debtor to Secured Party, direct or indirect, absolute or contingent, whether now existing or later created or arising, and whether oral or in writing.

D. All costs and expenses incurred by Secured Party, including reasonable attorney's fees, in the enforcement of this Agreement or any provision of it or in the collection of any obligation secured by this Agreement.

II. Collateral

The collateral (hereafter called Collateral) in which a security interest is given by Debtor to Secured Party is the following personal property:

A. All crops of every kind previously planted and now growing, or planted in the future, on the lands commonly known and referred to as (name of farm), consisting of acres, more or less, located at (address of farm).

B. All farm implements and equipment of Debtor including, but not limited to, tractors, cultivators, discs, planters, harvesters, combines, pickers and other machines employed in the farming of the real property mentioned above, together with all attachments and replacements of the same, including the equity of Debtor in any such item that is subject to a purchase money or other prior security interest.

C. Feed, seed, fertilizer and other supplies now or later owned by Debtor and used or intended for use in the farming of the real property mentioned above.

E. Livestock described and inventoried on Schedule A attached to this Agreement, and the increase of such livestock.

F. All products and proceeds of any of the foregoing, including cash and accounts receivable.

III. Ownership and Preservation of Collateral

A. Debtor warrants that he is the owner of all Collateral mentioned above and currently in his possession or control, free from any adverse lien, security interest or encumbrance, except for the security interest now granted, and purchase-money and other security interests of other creditors listed in Schedule B, attached to this Agreement. Debtor shall defend Collateral against all claims and demands of all persons at any time claiming the Collateral or any interest in the same.

B. Debtor shall not remove any of the Collateral from the real property mentioned above without the prior written consent of Secured Party, except for the disposition of Collateral provided for below.

C. Debtor shall keep Collateral and the proceeds of the same free from adverse liens, in good condition and in an unmanufactured state. Debtor shall not waste or destroy Collateral or any part of the same, and shall plant, cultivate and harvest the crops mentioned above, in a good and farmer-like manner in accordance with accepted methods of farming in the county in which the farm is situated.

IV. Financing Statements

Debtor represents that no financing statement pertaining to any portion of the Collateral is on file in any public office. Debtor will join with Secured Party, at the request of Secured Party, in executing one or more financing statements pursuant to (citation state’s code sections dealing with Article 9 of the Uniform Commercial Code) in form satisfactory to Secured Party, and will pay the cost of filing such statements in all public offices where filing is deemed by Secured Party to be necessary; provided, that Debtor shall pay the costs of filing at the appropriate public offices. If and to the extent that continuation statements are necessary or advisable in the judgment of Secured Party, such statements shall be prepared and filed with the full cooperation of Debtor, at such public offices as Secured Party may deem advisable, and Debtor shall pay the filing costs for such continuation statements to the same extent as in the case of financing statements.

V. Insurance and Taxes

A. Debtor shall maintain insurance at all times on all tangible Collateral against risks of fire and risks included within extended-coverage provisions of standard policies, theft and such other risks as Secured Party may require, written by such company or companies as may be satisfactory to Secured Party, and payable in the event of loss to Secured Party and Debtor as their interests may appear. Such insurance shall be written for the full insurable values of the tangible collateral covered by the insurance. All policies of insurance shall provide for days' written minimum cancellation notice to Secured Party. All policies of insurance may, at the option of Secured Party, be held by Secured Party. Secured Party shall have the right to act as attorney for Debtor in connection with all claims of loss, and the negotiation and settlement of all such claims. Secured Party may receive, endorse and deposit any insurance drafts for losses in the name of Debtor and as Debtor's attorney-in-fact.

B. Debtor shall pay promptly when due all taxes and assessments levied against Collateral or the proceeds of the same, or against this Agreement or any note secured by this Agreement.

VI. Payment of Expenses by Secured Party and Right to Reimbursement

If any tax, insurance premium, lien or other expense or obligation relating to the Collateral is not paid by Debtor promptly when due, Secured Party at Secured Party’s option may pay any such indebtedness. Debtor shall promptly reimburse Secured Party on demand for any such indebtedness paid by Secured Party. Such right and option of Secured Party is cumulative, and in addition to any other right or remedy of Secured Party under this Agreement.

VII. Control, Use and Sale of Collateral by Debtor

So long as Debtor shall not be in default under this Agreement, Debtor may harvest, process, store and use the Collateral for all appropriate purposes not inconsistent with this Agreement, or with the terms or conditions of any policy of insurance covering the Collateral. Debtor may also sell the Collateral at seasonable times in the ordinary course of business of farming the real property referred to mentioned above. A sale in the ordinary course of business does not include a transfer in partial or total satisfaction of a debt owing by Debtor to a third person. The rights of Debtor under this section shall include the right to use and consume appropriate kinds and portions of the Collateral in preserving and preparing for market any livestock or poultry covered by this Agreement, and in planting, cultivating or harvesting crops referred to in this Agreement. If Debtor shall fail so to use and employ the Collateral and dispose of the Collateral by sale, Secured Party at Secured Party’s option may assume the management, use and control of the Collateral and the conducting of farming operations on the real property described above in order to protect the Collateral and preserve the rights of Secured Party in the Collateral, and in the proceeds of the same.

VIII. Proceeds of Collateral

A. On request of Secured Party, Debtor shall promptly deliver to Secured Party after the accounts are created lists of all accounts that constitute proceeds of the Collateral. Debtor shall deliver to Secured Party promptly on receipt, and to the extent necessary to discharge all obligations secured by this Agreement as they arise, all cash proceeds of the Collateral.

B. Secured Party shall have full right and power to collect, compromise, endorse, sell, or otherwise deal with proceeds of the Collateral in Secured Party’s own name or the name of Debtor, and, in the discretion of Secured Party, to apply cash proceeds to any obligation secured by this Agreement or release such proceeds, or portions of the same, to Debtor for use in the farming operations of Debtor.

C. Debtor agrees that there shall be no offsets or credits charged against any proceeds adverse to the interest of Secured Party.

IX. Default

Debtor shall be in default under this Agreement on the happening of any one of the following events or conditions, or any combination of the same:

A. Failure to make any payment or perform any obligation or covenant provided for or required by any promissory note secured by this Agreement, or otherwise set forth in this Agreement.

B. The falsity in any material respect of any warranty, representation or statement made or furnished to Secured Party by Debtor, expressed in this Agreement or necessarily implied by the provisions of this Agreement.

C. The occurrence of any event that causes the acceleration of the maturity of the indebtedness of Debtor to others under any agreement which affects or may affect the position or performance of Debtor under this Agreement.

D. The loss, theft, damage, destruction, sale or encumbrance of any of the Collateral, or the making of any levy on, or seizure or attachment of, the Collateral.

E. Commencement of any voluntary or involuntary proceeding under the bankruptcy or any state insolvency laws against Debtor, the death, insolvency or business failure of Debtor, or the appointment of a receiver for any part of the property of Debtor.

F. The failure of Debtor to plant, cultivate and harvest crops referred to in this Agreement, in due season and in a good and farmer-like manner, or to properly care for or protect any of the Collateral.

G. The failure to deliver to Secured Party the proceeds of any Collateral sold pursuant to Section VIII.

X. Remedies of Secured Party

A. All obligations secured by this Agreement shall be immediately due and payable, and the remedies of a secured party under (citation state’s code sections dealing with Article 9 of the Uniform Commercial Code) and any other remedies expressed or provided for in this Agreement, shall accrue to and may be exercised by Secured Party on the default of Debtor. Secured Party may require Debtor to assemble the Collateral and make it available at a place to be designated by Secured Party that is reasonably convenient to Debtor.

B. Unless the Collateral is perishable, or threatens to decline speedily in value, or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time and place of any public sale of the Collateral, or of the time after which any private sale or any other intended disposition of the Collateral is to be made by Secured Party. The requirements of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of Debtor shown in this Agreement, or such subsequent address as may be designated by Debtor in writing, at least days before the time of the intended sale or other disposition.

C. Expenses of retaking, holding, preparing for sale, selling and other expenses reasonably incurred in enforcing any remedy available to Secured Party, including reasonable attorney's fees and other legal expenses of Secured Party, shall be added to the obligation of Debtor and be paid by Debtor to Secured Party.

D. No waiver by Secured Party, whether express or implied, of any default shall operate as a waiver of any other default or of the same default on a future occasion.

XI. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

XII. Mandatory Arbitration

Notwithstanding the foregoing, and anything herein to the contrary, any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

XIII. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

XIV. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

WITNESS our signatures as of the day and date first above stated.

Acknowledgment (may vary by state)

STATE OF

COUNTY OF

Personally appeared before me, the undersigned authority in and for the said County and State, on this day of , 20, within my jurisdiction, the within-named (Debtor) who acknowledged that he executed the above and foregoing instrument.