Ward AG Products, Inc. - Page 4

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          B.   Petitioner                                                             
               Ward incorporated his business (petitioner) in 1986.  Ward             
          bought a building for petitioner around 1988 and remodeled it.              
               Petitioner sold seeds, herbicides, fertilizers, and                    
          pesticides to farmers in the Hastings, Florida, area.  Petitioner           
          also sold farm hardware, tools, and implements.  The vast                   
          majority of payments that petitioner received were from the                 
          retail sale of farming products to farmers.                                 
               Most of petitioner's customers grew potatoes.  Some grew               
          corn or cotton.  Petitioner's customers could not always pay                
          currently for their purchases from petitioner.  Customers paid              
          interest to petitioner on their unpaid accounts.  Petitioner                
          often required its customers to sign written contracts which gave           
          petitioner a lien against the farm or other assets.  Those                  
          contracts provided a security interest to petitioner in both the            
          current crop and crops to be grown in the future on specified               
          real property.  The contracts typically provided that the                   
          collateral was not subordinate to other loan agreements.                    
          Petitioner's customers sometimes provided land as collateral.               
               One of petitioner's suppliers from 1986 to 1993 was Lykes              
          Agri Sales.  It sold about $400,000 of merchandise on credit to             
          petitioner for each growing season (i.e., two or three times per            
          year).  Petitioner sold the merchandise to its customers.                   
          Petitioner gave Lykes Agri Sales a security interest in                     

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Last modified: May 25, 2011