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Draft: 12/13/2007
<br />SECURITY AGREEMENT
<br />DATED DECEMBER 20, 2007
<br />ST. JOHN'S CHURCH OF LITTLE CANADA, MINNESOTA, a Minnesota religious
<br />corporation (a/k/a St. John the Evangelist Church) (hereinafter called the "Debtor ") and
<br />BANKCHEROKEE, a Minnesota banking corporation, whose address is 607 S. Smith Avenue,
<br />in the City of St. Paul, in the County of Ramsey, State of Minnesota (hereinafter called the
<br />"Secured Party "), agree as follows: The Debtor grants to the Secured Party a security interest in
<br />the property described below together with any additions and accessions thereto, replacements
<br />thereof, and all insurance, condemnation and other products or proceeds thereof, to secure
<br />prompt payment when due of the sum of [One Million Eight Hundred Thousand and no /100
<br />(51,800,000) Dollars] as evidenced by that certain [51,800,000[ City of Little Canada,
<br />Minnesota, Educational Facilities Revenue Note (St. John the Evangelist School Project) Series
<br />2007 of even date herewith from the City of Little Canada to the Secured Party (the "Note "):
<br />All fixtures, equipment, vehicles and personal property of every kind and nature
<br />whatsoever now owned or hereafter owned, including all extensions, additions,
<br />improvements, betterments, renewals and replacements of any of the foregoing
<br />but specifically excluding therefrom "sacred objects" which shall include, without
<br />limitation the following: the altar, altar stone, tabernacle, icons, statues,
<br />vestments, baptismal font, chalices, ciboria, containers of holy oil, containers of
<br />chrism, monstrances, relics and crosses which contain the corpus; (b) all
<br />Accounts, Chattel Paper, Commercial Tort or other claims, and General
<br />Intangibles; (c) all inventory now owned or hereafter owned
<br />The above - described property hereinafter referred to as the "Collateral ".
<br />DEBTOR HEREBY AGREES, WARRANTS AND COVENANTS THAT:
<br />1. The Collateral will be kept in the State of Minnesota. The Debtor will not remove the
<br />Collateral from the State of Minnesota without the prior written consent of the Secured
<br />Party. Upon reasonable notice to the Debtor, the Secured Party may examine and inspect
<br />the Collateral at any time, wherever located. The Secured Party will use all reasonable
<br />efforts to insure that any such examination or inspection will not disrupt or interfere with
<br />religious services or activities or school classes, operations or activities.
<br />2. The Collateral is for business use and is specifically to be used in operation of the
<br />Debtor's business.
<br />3. Except for the security interest granted hereby and other security interests granted to the
<br />Secured Party, the Debtor is the owner of the Collateral, free and clear of all liens,
<br />security interests or encumbrances except purchase money security interests and
<br />capitalized leases and other Permitted Liens (as hereinafter defined), and the Debtor will
<br />defend the Collateral against all claims and demands of all persons at any time claiming
<br />the same or any interest therein. "Permitted Liens" shall include (i) restrictions existing
<br />on, or imposed by the donor at the time of conveyance, any gift, contribution, grant or
<br />bequest; (ii) purchase money security interests or capitalized lease liabilities, (iii) the
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