FSA-2028 Security Agreement - OL lien on property financed

This form is available electronically.

FSA-2028
(09-03-10)

Form Approved - OMB No. 0560-0238
(See Page 7 for Privacy Act and Public Burden Statements).
U.S. DEPARTMENT OF AGRICULTURE
Position 1
Far m Ser vic e Agenc y

SECURITY AGREEMENT
1. THIS SECURITY AGREEMENT, dated (a)

, is made between the United States

of America, acting through the U.S. Department of Agriculture, Farm Service Agency (Secured Party) and (b) ____________________

(Debtor), whose mailing address is (c)

2. BECAUSE Debtor is justly indebted to Secured Party as evidenced by one or more certain promissory notes or other instruments,
and in the future may incur additional indebtedness to Secured Party which will also be evidenced by one or more promissory notes or
other instruments, all of which are called "Note," which has been executed by Debtor, is payable to the order of Secured Party, and
authorizes acceleration of the entire indebtedness at the option of Secured Party upon any default by Debtor; and
The Note evidences a loan to Debtor, and Secured Party at any time may assign the Note to any extent authorized by the Consolidated
Farm and Rural Development Act or any other Act administered by Secured Party; and
It is the purpose and intent of this Security Agreement to secure prompt payment of the Note and the timely performance of all
obligations and covenants contained in this Security Agreement; and
NOW THEREFORE, in consideration of said loans and (1) to secure the prompt payment of all existing and future indebtedness and
liabilities of Debtor to Secured Party and of all renewals and extensions of such indebtedness and any additional loans or future
advances to Debtor before or after made by Secured Party under the then existing provisions of the Consolidated Farm and Rural
Development Act or any other Act administered by Secured Party all with interest; (2) in any event and at all times to secure the
prompt payment of all advances and expenditures made by Secured Party, with interest, as described in this Security Agreement; and
(3) the timely performance of every covenant and agreement of Debtor contained in this Security Agreement or in any supplementary
agreement.
DEBTOR GRANTS to Secured Party a security interest in Debtor's interest in the following described collateral, including the
proceeds and products thereof, accessions thereto, future advances and security acquired hereinafter (collateral); provided however the
following description of specific items of collateral shall not in any way limit the collateral covered by this Security Agreement and
the Secured Party's interest therein (a):

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(b) All crops, annual and perennial, and other plant or farm products now planted, growing or grown, or harvested or which are
planted after this Security Agreement is signed or otherwise become growing or harvested crops or other plant products (1) within
the one-year period or any longer period of years permissible under State law, or (2) at any time after this Security Agreement is
signed if no fixed maximum period is prescribed by State law, including crops and plant products now planted, to be planted,
growing or grown or harvested on the following described real estate:
(1)
Farm or Other Real Estate Owner

(2)
Approximate
Number of Acres

(3)
County and State

(4)
Approximate Distance and
Direction from Named Town or
Other Description

Including all entitlements, benefits, and payments from all State and Federal farm programs; all crop indemnity payments; all payment
intangibles arising from said crops and all general intangibles arising from said crops; and all allotments and quotas existing on or
leased and transferred or to be leased and transferred to the above described farms as well as any proceeds derived from the
conveyance or lease and transfer by the Debtor to any subsequent party.
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(c) All farm and other equipment (except small tools and small equipment such as hand tools, power lawn mowers and other items of
like type unless described below), and inventory, now owned or hereafter acquired by Debtor, together with all replacements,
substitutions, additions, and accessions thereto, including but not limited to the following which are located in the State(s)
of (1)
:
(2)
Line No.

(3)
Quantity

(4)
Kind

(5)
Manufacturer

(6)
Size and Type

(7)
Condition

(8)
Year

(9)
Serial or Model No.

(10) Including the following described fixtures which are affixed, or are to be affixed to real estate, as extracted collateral; or timber
to be cut, all of which, together with the associated real estate, are more particularly described as follows:

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(d) All livestock (except livestock and poultry kept primarily for subsistence purposes), fish, bees, birds, furbearing animals, other
animals produced or used for commercial purposes, other farm products, and supplies, now owned or hereafter acquired by
Debtor, together with all increases, replacements, substitutions, and additions thereto, including but not limited to the following
located in the State(s) of (1)
:
(2)
Line No.

Initial

(3)
Quantity

Date

(4)
Kind or Sex

(5)
Breed

(6)
Color

(7)
Weight

(8)
Age

(9)
Brand or Other Identification

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(e) All accounts, deposit accounts, goods, supplies, inventory, supporting obligations, investment property, certificates of title,
payment intangibles, and general intangibles, including but not limited to the following:

3. DEBTOR WARRANTS, COVENANTS, AND AGREES THAT:
(a) Debtor is the absolute and exclusive owner of the above-described collateral, and any marks or brands used to describe
livestock are the holding brands and carry the title, although the livestock may have other marks or brands, and such collateral
is free from all liens, encumbrances, security and other interests except (1) any existing liens, encumbrances, security or other
interests in favor of Secured Party which shall remain in full force and effect; (2) any applicable landlord's statutory liens; and
(3) other liens, encumbrances, security or other interests previously disclosed to Secured Party in the loan application, farm
operating plan or other loan documents. Debtor will defend the collateral against the claims and demands of all other persons.
(b) Statements contained in Debtor's loan application and related loan documents are true and correct and that Debtor's name, as
stated in the loan application and in this Security Agreement, is Debtor's complete legal name; and Debtor will (1) use the
loan funds for the purposes for which they were or are advanced; (2) comply with such farm operating plans as may be agreed
upon from time to time by Debtor and Secured Party; (3) care for and maintain collateral in a good and husbandlike manner;
(4) insure the collateral in such amounts and manner as may be required by Secured Party, and if Debtor fails to do so,
Secured Party, at its option, may procure such insurance; (5) permit Secured Party to inspect the collateral at any reasonable
time; (6) not abandon the collateral or encumber, conceal, remove, sell or otherwise dispose of it or of any interest in the
collateral, or permit others to do so, without the prior written consent of Secured Party; (7) not permit the collateral to be
levied upon, injured or destroyed, or its value to be impaired, except by using harvested crops in amounts necessary to care for
livestock covered by this Security Agreement; and (8) maintain accurate records of the collateral, furnish Secured Party any
requested information related to the collateral and allow Secured Party to inspect and copy all records relating to the collateral.
(c) Debtor will pay promptly when due all (1) indebtedness evidenced by the Note and any indebtedness to Secured Party secured
by this Security Agreement; (2) rents, taxes, insurance premiums, levies, assessments, liens, and other encumbrances, and costs
of lien searches and maintenance and other charges now or later attaching to, levied on, or otherwise pertaining to the collateral
or this security interest; (3) filing or recording fees for instruments necessary to perfect, continue, service, or terminate this
security interest; and (4) fees and other charges now or later required by regulations of the Secured Party.
(d) Secured Party is authorized to file financing statements describing the collateral, to file amendments to the financing
statements and to file continuation statements.
(e) Debtor will immediately notify Secured Party of any material change in the collateral or in the collateral's location; change in
Debtor's name, address, or location; change in any warranty or representation in this Security Agreement; change that may
affect this security interest or its perfection; and any event of default.
(f) Secured Party may at any time pay any other amounts required in this instrument to be paid by Debtor and not paid when due,
including any costs and expenses for the preservation or protection of the collateral or this security interest, as advances for the
account of Debtor. All such advances shall bear interest at the rate borne by the Note which has the highest interest rate.
(g) All advances by Secured Party as described in this Security Agreement, with interest, shall be immediately due and payable by
Debtor to Secured Party without demand and shall be secured by this Security Agreement. No such advance by Secured Party
shall relieve Debtor from breach of the covenant to pay. Any payment made by Debtor may be applied on the Note or any
indebtedness to Secured Party secured hereby, in any order Secured Party determines.
(h) In order to secure or better secure the above-mentioned obligations or indebtedness, Debtor agrees to execute any further
documents, including additional security instruments on such real and personal property as Secured Party may require and to
take any further actions reasonably requested by Secured Party to evidence or perfect the security interest granted herein or to
effectuate the rights granted to Secured Party herein.
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4. IT IS FURTHER AGREED THAT:
(a) Until default, Debtor may retain possession of the collateral.
(b) Default shall exist under this Security Agreement if Debtor fails to perform or discharge any obligation or to pay promptly any
indebtedness secured by this Security Agreement or to observe or perform any covenants or agreements in this Security
Agreement or in any supplementary agreement contained, or if any of Debtor's representations or warranties herein prove false
or misleading, or upon the death or incompetency of the parties named as Debtor, or upon the bankruptcy or insolvency of any
one of the parties named as Debtor. Default shall also exist if any loan proceeds are used for a purpose that will contribute to
excessive erosion of highly erodible land or to the conversion of wetlands, as described in 7 CFR Part 1940, Subpart G,
Exhibit M or any successor regulation. Upon any default:
(1) Secured Party, at its option, with or without notice as permitted by law may (a) declare the unpaid balance on the Note and
any indebtedness secured by this Security Agreement immediately due and payable; (b) enter upon the premises and
cultivate and harvest crops, take possession of, repair, improve, use, and operate the collateral or make equipment usable,
for the purpose of protecting or preserving the collateral or this lien, or preparing or processing the collateral for sale, and
(c) exercise any sale or other rights accorded by law. Secured Party may disclaim all warranties relating to title,
possession, quiet enjoyment, merchantability, fitness or the like in any disposition of the collateral;
(2) Debtor (a) agrees to assemble the collateral and make it available to Secured Party at such times and places as designated
by Secured Party; and (b) waives all notices, exemptions, compulsory disposition and redemption rights;
(3) A default shall exist under any other security instrument held by Secured Party and executed or assumed by Debtor on
real or personal property. Likewise, default under such other security instrument shall constitute default under this
Security Agreement.
(c) Proceeds from disposition of collateral shall be applied first on expenses of retaking, holding, preparing for sale, processing,
selling and the like and for payment of reasonable attorneys' fees and legal expenses incurred by Secured Party, second to the
satisfaction of prior security interests or liens to the extent required by law and in accordance with current regulations of the
Secured Party, third to the satisfaction of indebtedness secured by this Security Agreement, fourth to the satisfaction of
subordinate security interests to the extent required by law, fifth to any obligations of Debtor owing to Secured Party and
sixth to Debtor. Any proceeds collected under insurance policies shall be applied first on advances and expenditures made by
Secured Party, with interest, as provided above, second on the debt evidenced by the Note, unless Secured Party consents in
writing to their use by Debtor under Secured Party's direction for repair or replacement of the collateral, third on any other
obligation of Debtor owing to Secured Party, and any balance shall be paid to Debtor unless otherwise provided in the
insurance policies. Debtor will be liable for any deficiency owed to Secured Party after such disposition of proceeds of the
collateral and insurance.
(d) It is the intent of Debtor and Secured Party that to the extent permitted by law and for the purpose of this Security Agreement,
no collateral covered by this Security Agreement is or shall become realty or accessioned to other goods.
(e) Debtor agrees that the Secured Party will not be bound by any present or future State exemption laws. Debtor expressly
WAIVES the benefit of any such State laws.
(f) Secured Party may comply with any applicable State or Federal law requirements in connection with the disposition of the
collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the collateral.
(g) This Security Agreement is subject to the present regulations of the Secured Party and to its future regulations not inconsistent
with the express provisions of this Security Agreement.
(h) If any provision of this Security Agreement is held invalid or unenforceable, it shall not affect any other provisions, but this
Security Agreement shall be construed as if it had never contained such invalid or unenforceable provision.

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(i) The rights and privileges of Secured Party under this Security Agreement shall accrue to the benefit of its successors and
assigns. All covenants, warranties, representations, and agreements of Debtor contained in this Security Agreement are joint
and several and shall bind personal representatives, heirs, successors, and assigns.
(j) If at any time it shall appear to Secured Party that Debtor may be able to obtain a loan from other credit sources, at
reasonable rates and terms for loans for similar purposes and periods of time, Debtor will, upon Secured Party's request,
apply for and accept such loan in sufficient amount to pay the Note and any indebtedness secured by this Security
Agreement. Debtor will be responsible for any application fees or purchase of stock in connection with such loan. The
provisions of this paragraph do not apply if the Note secured by this Security Agreement is for a Conservation Loan.
(k) Failure of the Secured Party to exercise any right, whether once or often, shall not be construed as a waiver of any covenant or
condition or of the breach of such covenant or condition. Such failure shall also not affect the exercise of such right without
notice upon any subsequent breach of the same or any other covenant or condition.
(l) SECURED PARTY HAS INFORMED DEBTOR THAT DISPOSAL OF PROPERTY COVERED BY THIS
SECURITY AGREEMENT WITHOUT THE CONSENT OF SECURED PARTY, OR MAKING ANY FALSE
STATEMENT IN THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT, MAY CONSTITUTE A
VIOLATION OF FEDERAL CRIMINAL LAW.
5. CERTIFICATION
I certify that the information provided is true, complete and correct to the best of my knowledge and is provided in good faith.
(Warning: Section 1001 of Title 18, United States Code, provides for criminal penalties to those who provide false statements. If
any information is found to be false or incomplete, such finding may be grounds for denial of the requested action.)
6A. Signature of Individual Applicant or Authorized Entity Representatives

NOTE:

6B. Date

The following statement is made in accordance with the Privacy Act of 1974 (5 U.S.C. 552a - as amended). The authority for requesting the
information identified on this form is the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 1921 et. seq.). The
information will be used to determine eligibility and feasibility for loans and loan guarantees, and servicing of loans and loan guarantees.
The information collected on this form may be disclosed to other Federal, State, and local government agencies, Tribal agencies, and
nongovernmental entities that have been authorized access to the information by statute or regulation and/or as described in the applicable
Routine Uses identified in the System of Records Notice for USDA/FSA-14, Applicant/Borrower. Providing the requested information is
voluntary. However, failure to furnish the requested information may result in a denial for loans and loan guarantees, and servicing of loans
and loan guarantees. The provisions of criminal and civil fraud, privacy, and other statutes may be applicable to the information provided.
According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is
0560-0238. The time required to complete this information collection is estimated to average 20 minutes per response, including the time for
reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the
collection of information. RETURN THIS COMPLETED FORM TO YOUR COUNTY FSA OFFICE.

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applicable, sex, marital status, familial status, parental status, religion, sexual orientation, political beliefs, genetic information, reprisal, or because all or part of an individual’
s
income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for
communication of program information (Braille, large print, audiotape, etc.) should contact USDA’
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To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue,
S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 8456136 (Spanish Federal-relay). USDA is an equal opportunity provider and employer.