Exhibit 10.1

MASTER LOAN AGREEMENT

 

THIS MASTER LOAN AGREEMENT is entered into as of March 14, 2012 between CoBANK,
ACB ("CoBank") and SOUTH DAKOTA SOYBEAN PROCESSORS, LLC, Volga, South Dakota
(the "Company").

BACKGROUND

 

CoBank and the Company are parties to a Master Loan Agreement dated May 3, 2010,
as amended (the "Existing Agreement"). Pursuant to the terms of the Existing
Agreement, the parties entered into one or more Supplements thereto. CoBank and
the Company now desire to amend and restate the Existing Agreement and to apply
such new agreement to the existing Supplements, as well as any new Supplements
that may be issued thereunder. For that reason and for valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), CoBank and the
Company hereby agree that the Existing Agreement shall be amended and restated
to read as follows:

 

SECTION 1. Supplements. In the event the Company desires to borrow from CoBank
and CoBank is willing to lend to the Company, or in the event CoBank and the
Company desire to consolidate any existing loans hereunder, the parties will
enter into a Supplement to this agreement (a "Supplement"). Each Supplement will
set forth the amount of the loan, the purpose of the loan, the interest rate or
rate options applicable to that loan, the repayment terms of the loan, and any
other terms and conditions applicable to that particular loan. Each loan will be
governed by the terms and conditions contained in this agreement and in the
Supplement relating to the loan. As of the date hereof, the following
Supplements are outstanding hereunder and shall be governed by the terms and
conditions hereof: (A) the Monitored Revolving Credit Supplement dated November
10, 2011 and numbered RIB051S01O; (B) the Revolving Term Loan Supplement dated
November 10, 2011 and numbered RIB051T05I; and (C) the Revolving Credit
Supplement (Letter of Credit) dated November 10, 2011 and numbered RIB051T06F.

 

SECTION 2. Availability. Loans will be made available on any day on which CoBank
and the Federal Reserve Banks are open for business upon the telephonic or
written request of the Company. Requests for loans must be received no later
than 12:00 Noon Company's local time on the date the loan is desired. Loans will
be made available by wire transfer of immediately available funds to such
account or accounts as may be authorized by the Company. The Company shall
furnish to CoBank a duly completed and executed copy of a CoBank Delegation and
Wire and Electronic Transfer Authorization Form, and CoBank shall be entitled to
rely on (and shall incur no liability to the Company in acting on) any request
or direction furnished in accordance with the terms thereof.

 

SECTION 3. Repayment. The Company's obligation to repay each loan shall be
evidenced by the promissory note set forth in the Supplement relating to that
loan or by such replacement note as CoBank shall require. CoBank shall maintain
a record of all loans, the interest accrued thereon, and all payments made with
respect thereto, and such record shall, absent proof of manifest error, be
conclusive evidence of the outstanding principal and interest on the loans. All
payments shall be made by wire transfer of immediately available funds, by
check, or by automated clearing house or other similar cash handling processes
as specified by separate agreement between the Company and CoBank. Wire
transfers shall be made to ABA No. 307088754 for advice to and credit of CoBank
(or to such other

account as CoBank may direct by notice). The Company shall give CoBank
telephonic notice no later than 12:00 Noon Company's local time of its intent to
pay by wire and funds received after 3:00 p.m. Company's local time shall be
credited on the next business day. Checks shall be mailed to CoBank, Department
167, Denver, Colorado 80291-0167 (or to such other place as CoBank may direct by
notice). Credit for payment by check will not be given until the later of: (A)
the day on which CoBank receives immediately available funds; or (B) the next
business day after receipt of the check.

 

 

 

 

 

SECTION 4. Capitalization. The Company agrees to acquire equity in CoBank in
such amounts and at such times as CoBank may from time to time require in
accordance with its Bylaws and Capital Plan (as each may be amended from time to
time), except that the maximum amount of equity that the Company may be required
to purchase in connection with a loan may not exceed the maximum amount
permitted by the Bylaws at the time the Supplement relating to such loan is
entered into or such loan is renewed or refinanced by CoBank. The rights and
obligations of the parties with respect to such equity and any patronage or
other distributions made by CoBank shall be governed by CoBank's Bylaws and
Capital Plan (as each may be amended from time to time).

 

SECTION 5. Security. The Company's obligations under this agreement, all
Supplements (whenever executed), and all instruments and documents contemplated
hereby or thereby, shall be secured by a statutory first lien on all equity
which the Company may now own or hereafter acquire in CoBank. In addition, the
Company's obligations under each Supplement (whenever executed) and this
agreement shall be secured by a first lien (subject only to exceptions approved
in writing by CoBank) pursuant to all security agreements, mortgages, and deeds
of trust executed by the Company in favor of CoBank, whether now existing or
hereafter entered into. As additional security for those obligations: (A) the
Company agrees to grant to CoBank, by means of such instruments and documents as
CoBank shall require a first priority lien on such of its other assets, whether
now existing or hereafter acquired, as CoBank may from time to time require; and
(B) the Company agrees to grant to CoBank, by means of such instruments and
documents as CoBank shall require, a first priority lien on all realty which the
Company may from time to time acquire after the date hereof.

 

SECTION 6. Conditions Precedent.

 

(A) Conditions to Initial Supplement. CoBank's obligation to extend credit under
the initial Supplement hereto is subject to the conditions precedent that CoBank
receive, in form and content satisfactory to CoBank, each of the following:

 

This Agreement, Etc. A duly executed copy of this agreement and all instruments
and documents contemplated hereby.

 

(B) Conditions to Each Supplement. CoBank's obligation to extend credit under
each Supplement, including the initial Supplement, is subject to the conditions
precedent that CoBank receive, in form and content satisfactory to CoBank, each
of the following:

 

(1) Supplement. A duly executed copy of the Supplement and all instruments and
documents contemplated thereby.

 

(2) Evidence of Authority. Such certified board resolutions, certificates of
incumbency, and other evidence that CoBank may require that the Supplement, all
instruments and documents executed in connection therewith, and, in the case of
initial Supplement hereto, this agreement and all instruments and documents
executed in connection herewith, have been duly authorized and executed.

 

(3) Fees and Other Charges. All fees and other charges provided for herein or in
the Supplement.

 

(4) Evidence of Perfection, Etc. Such evidence as CoBank may require that CoBank
has a duly perfected first priority lien on all security for the Company's
obligations, and that the Company is in compliance with Section 8(D) hereof.

 

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(C) Conditions to Each Loan. CoBank's obligation under each Supplement to make
any loan to the Company thereunder is subject to the condition that no "Event of
Default" (as defined in Section 11 hereof) or event which with the giving of
notice and/or the passage of time would become an Event of Default hereunder (a
"Potential Default"), shall have occurred and be continuing.

 

SECTION 7. Representations and Warranties.

 

(A) This Agreement. The Company represents and warrants to CoBank that as of the
date of this agreement:

 

(1)                   Compliance. The Company and, to the extent contemplated
hereunder, each "Subsidiary" (as defined below), is in compliance with all of
the terms of this agreement, and no Event of Default or Potential Default exists
hereunder.

 

(2)                   Subsidiaries. The Company has the following
"Subsidiary(ies)" (as defined below): Urethane Soy Systems Company. For purposes
hereof, a "Subsidiary" shall mean a corporation of which shares of stock having
ordinary voting power to elect a majority of the board of directors or other
managers of such corporation are owned, directly or indirectly, by the Company.

 

(B) Each Supplement. The execution by the Company of each Supplement hereto
shall
constitute a representation and warranty to CoBank that:

 

(1)                   Applications. Each representation and warranty and all
information set forth in any application or other documents submitted in
connection with, or to induce CoBank to enter into, such Supplement, is correct
in all material respects as of the date of the Supplement.

 

(2)                   Conflicting Agreements, Etc. This agreement, the
Supplements, and all security and other instruments and documents relating
hereto and thereto (collectively, at any time, the "Loan Documents"), do not
conflict with, or require the consent of any party to, any other agreement to
which the Company is a party or by which it or its property may be bound or
affected, and do not conflict with any provision of the Company's bylaws,
articles of incorporation, or other organizational documents.

 

(3)                   Compliance. The Company and, to the extent contemplated
hereunder, each Subsidiary, is in compliance with all of the terms of the Loan
Documents (including, without limitation, Section 8(A) of this agreement on
eligibility to borrow from CoBank).

 

(4)                   Binding Agreement. The Loan Documents create legal, valid,
and binding obligations of the Company which are enforceable in accordance with
their terms, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, or similar laws affecting creditors' rights generally.

 

SECTION 8. Affirmative Covenants. Unless otherwise agreed to in writing by
CoBank while this agreement is in effect, the Company agrees to and with respect
to Subsections 8(B) through 8(G) hereof, agrees to cause each Subsidiary to:

 

(A)                 Eligibility. Maintain its status as an entity eligible to
borrow from CoBank.

 

(B)                  Corporate Existence, Licenses, Etc. (1) Preserve and keep
in full force and effect its existence and good standing in the jurisdiction of
its incorporation or formation; (2) qualify and remain qualified to transact
business in all jurisdictions where such qualification is required; and (3)
obtain and maintain all licenses, certificates, permits, authorizations,
approvals, and the like which are material to the conduct of its business or
required by law, rule, regulation, ordinance, code, order, and the like
(collectively, "Laws").

 

 

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(C)                 Compliance with Laws. Comply in all material respects with
all applicable Laws, including, without limitation, all Laws relating to
environmental protection and any patron or member investment program that it may
have. In addition, the Company agrees to cause all persons occupying or present
on any of its properties, and to cause each Subsidiary to cause all persons
occupying or present on any of its properties, to comply in all material
respects with all environmental protection Laws.

 

(D)                 Insurance. Maintain insurance with insurance companies or
associations acceptable to CoBank in such amounts and covering such risks as are
usually carried by companies engaged in the same or similar business and
similarly situated, and make such increases in the type or amount of coverage as
CoBank may request. All such policies insuring any collateral for the Company's
obligations to CoBank shall have mortgagee or lender loss payable clauses or
endorsements in form and content acceptable to CoBank. At CoBank's request, all
policies (or such other proof of compliance with this Subsection as may be
satisfactory to CoBank) shall be delivered to CoBank.

 

(E) Property Maintenance. Maintain all of its property that is necessary to or
useful in the proper conduct of its business in good working condition, ordinary
wear and tear excepted.

 

(F) Books and Records. Keep adequate records and books of account in which
complete entries will be made in accordance with generally accepted accounting
principles ("GAAP") consistently applied.

 

(G) Inspection. Permit CoBank or its agents, upon reasonable notice and during
normal business hours or at such other times as the parties may agree, to
examine its properties, books, and records, and to discuss its affairs,
finances, and accounts, with its respective officers, directors, employees, and
independent certified public accountants.

 

(H) Reports and Notices. Furnish to CoBank:

 

(1) Annual Financial Statements. As soon as available, but in no event more
than90 days after the end of each fiscal year of the Company occurring during
the term hereof, annual consolidated and consolidating financial statements of
the Company and its consolidated Subsidiaries, if any, prepared in accordance
with GAAP consistently applied. Such financial statements shall: (a) be audited
by independent certified public accountants selected by the Company and
acceptable to CoBank; be accompanied by a report of such accountants containing
an opinion thereon acceptable to CoBank; be prepared in reasonable detail and in
comparative form; and (d) include a balance sheet, a statement of income, a
statement of retained earnings, a statement of cash flows, and all notes and
schedules relating thereto.

 

(2)                   Interim Financial Statements. As soon as available, but in
no event more than 30 days after the end of each month, a consolidated balance
sheet of the Company and its consolidated Subsidiaries, if any, as of the end of
such month, a consolidated statement of income for the Company and its
consolidated Subsidiaries, if any, for such period and for the period year to
date, and such other interim statements as CoBank may specifically request, all
prepared in reasonable detail and in comparative form in accordance with GAAP
consistently applied and, if required by written notice from CoBank, certified
by an authorized officer or employee of the Company acceptable to CoBank.

 

 

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(3)                   Notice of Default. Promptly after becoming aware thereof,
notice of the occurrence of an Event of Default or a Potential Default.

 

(4)                   Notice of Non-Environmental Litigation. Promptly after the
commencement thereof, notice of the commencement of all actions, suits, or
proceedings before any court, arbitrator, or governmental department,
commission, board, bureau, agency, or instrumentality affecting the Company or
any Subsidiary which, if determined adversely to the Company or any such
Subsidiary, could have a material adverse effect on the financial condition,
properties, profits, or operations of the Company or any such Subsidiary.

 

(5)                   Notice of Environmental Litigation, Etc. Promptly after
receipt thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or any other communication alleging a condition that may require
the Company or any Subsidiary to undertake or to contribute to a cleanup or
other response under environmental Laws, or which seek penalties, damages,
injunctive relief, or criminal sanctions related to alleged violations of such
Laws, or which claim personal injury or property damage to any person as a
result of environmental factors or conditions.

 

(6)                   Bylaws and Articles. Promptly after any change in the
Company's bylaws or articles of incorporation, or membership and marketing
agreement (or like documents), copies of all such changes, certified by the
Company's Secretary.

 

(7)                   Compliance Certificates. Together with each set of
financial statements furnished to CoBank pursuant to Subsection (H)(2) hereof
for a period corresponding to a period for which one or more of the financial
covenants set forth in Section 10 hereof are required to be tested, a
certificate of an officer or employee of the Company acceptable to CoBank
setting forth calculations showing compliance with each of the financial
covenants that require compliance at the end of the period for which the
statements are being furnished.

 

(8)                   Other Information. Such other information regarding the
condition or operations, financial or otherwise, of the Company or any
Subsidiary as CoBank may from time to time reasonably request, including but not
limited to copies of all pleadings, notices, and communications referred to in
Subsections 8(H)(4) and (5) above.

 

SECTION 9. Negative Covenants. Unless otherwise agreed to in writing by CoBank,
while this agreement is in effect the Company will not:

 

(A)                 Borrowings. Create, incur, assume, or allow to exist,
directly or indirectly, any indebtedness or liability for borrowed money
(including trade or bankers' acceptances), letters of credit, or the deferred
purchase price of property or services (including capitalized leases), except
for: (1) debt to CoBank; (2) accounts payable to trade creditors incurred in the
ordinary course of business; (3) current operating liabilities (other than for
borrowed money) incurred in the ordinary course of business; (4) indebtedness of
the Company under its member or patron investment program, provided, however,
that such indebtedness is expressly stated to be subordinate in right of payment
to all obligations of the Company to CoBank; and (5) debt of the Company to
miscellaneous creditors in an amount not to exceed $300,000.00.

 

(B)                  Liens. Create, incur, assume, or allow to exist any
mortgage, deed of trust, pledge, lien (including the lien of an attachment,
judgment, or execution), security interest, or other encumbrance of any kind
upon any of its property, real or personal (collectively, "Liens"). The forgoing
restrictions shall not apply to: (1) Liens in favor of CoBank; (2) Liens for
taxes, assessments, or governmental charges that are not past due; (3) Liens and
deposits under workers' compensation, unemployment insurance, and social
security Laws; (4) Liens and deposits to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), and like
obligations arising in the ordinary course of business as conducted on the date
hereof; (5) Liens imposed by Law in favor of mechanics, materialmen,
warehousemen, and like persons that secure obligations that are not past due;
(6) easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment of the property or assets encumbered thereby in the normal course
of its business or materially impair the value of the property subject thereto;
and (7) Liens in favor of miscellaneous creditors to secure indebtedness
permitted hereunder.

 

 

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(C)                 Mergers, Acquisitions, Etc. Merge or consolidate with any
other entity or acquire all or a material part of the assets of any person or
entity, or form or create any new Subsidiary or affiliate, or commence
operations under any other name, organization, or entity, including any joint
venture.

 

 

(D) Transfer of Assets. Sell, transfer, lease, or otherwise dispose of any of
its assets, except in the ordinary course of business.

 

(E) Loans and Investments. Make any loan or advance to any person or entity, or
purchase any capital stock, obligations or other securities of, make any capital
contribution to, or otherwise invest in any person or entity, or form or create
any partnerships or joint ventures except: (1) trade credit extended in the
ordinary course of business; and (2) loans or advances by the Company to
Urethane Soy Systems in an aggregate principal amount not to exceed
$8,500,000.00 at any one time outstanding.

 

(F) Contingent Liabilities. Assume, guarantee, become liable as a surety,
endorse, contingently agree to purchase, or otherwise be or become liable,
directly or indirectly (including, but not limited to, by means of a maintenance
agreement, an asset or stock purchase agreement, or any other agreement designed
to ensure any creditor against loss), for or on account of the obligation of any
person or entity, except by the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of the
Company's business.

 

(G) Change in Business. Engage in any business activities or operations
substantially different from or unrelated to the Company's present business
activities or operations.

 

(H) Dividends, Etc. Declare or pay any dividends, or make any distribution of
assets to the stockholders, or purchase, redeem, retire or otherwise acquire for
value any of its capital stock, or allocate or otherwise set apart any sum for
any of the foregoing, except that in any fiscal year of the Company, the Company
may pay dividends in an amount up to 35% of its consolidated net income for the
prior fiscal year, provided that no Event of Default or Potential Default shall
have occurred and be continuing or would result therefrom.

 

(I) Leases. Create, incur, assume, or permit to exist any obligation as lessee
under operating leases which should be capitalized in accordance with GAAP for
the rental or hire of any real or personal property, except: (1) leases of
soybean oil storage tank space with aggregate annual payments not to exceed
$400,000.00; (2) leases of up to 437 tanker and/or hopper railroad cars under
terms and conditions acceptable to CoBank; (3) Leases of other railroad cars,
excluding those allowed in (2) above, with original maturities of less than
sixty (60) months at the Company's discretion; and (4) other leases, excluding
those allowed above, which do not in the aggregate require the Company to make
scheduled payments to the lessors in any fiscal year of the company during the
term hereof in excess of $800,000.00.

 

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SECTION 10. Financial Covenants. Unless otherwise agreed to in writing, while
this agreement is in effect:

 

(A) Working Capital. The Company and its consolidated Subsidiaries will have an
excess of consolidated current assets over consolidated current liabilities
(both as determined in accordance with GAAP consistently applied) of not less
than: (1) $8,000,000.00 at the end of each fiscal year of the Company; and (2)
$5,500,000.00 at the end of each other period for which financial statements are
required to be furnished pursuant to Section 8(H) hereof, except that in
determining consolidated current assets, any amount available under the
Revolving Term Loan Supplement (less the amount that would be considered a
current liability under GAAP if fully advanced) hereto may be included.

 

(B) Debt Service Coverage Ratio. The Company and its consolidated Subsidiaries
will have at the end of each fiscal year of the Company a "Debt Service Coverage
Ratio" (as defined below) for such year of not less than 1.2 to 1.0. For
purposes hereof, the term "Debt Service Coverage Ratio" shall mean the following
(all as calculated on a consolidated basis for the most current year end in
accordance with GAAP consistently applied): (1) net income (after taxes), plus
depreciation and amortization, minus non-cash patronage income, minus
extraordinary gains (+ losses), minus gain (+ loss) on asset sale; divided by
(2) all current portion of long term debt for the prior period (previous
year-end).

 

SECTION 11. Events of Default. Each of the following shall constitute an "Event
of Default" under this agreement:

 

(A)                 Payment Default. The Company should fail to make any payment
to, or to purchase any equity in, CoBank when due.

 

(B)                  Representations and Warranties. Any representation or
warranty made or deemed made by the Company herein or in any Supplement,
application, agreement, certificate, or other document related to or furnished
in connection with this agreement or any Supplement, shall prove to have been
false or misleading in any material respect on or as of the date made or deemed
made.

 

(C)                 Certain Affirmative Covenants. The Company or, to the extent
required hereunder, any Subsidiary should fail to perform or comply with
Sections 8(A) through 8(H)(2), 8(H)(6), 8(H)(7) or any reporting covenant set
forth in any Supplement hereto, and such failure continues for 15 days after
written notice thereof shall have been delivered by CoBank to the Company.

 

(D)                 Other Covenants and Agreements. The Company or, to the
extent required hereunder, any Subsidiary should fail to perform or comply with
any other covenant or agreement contained herein or in any other Loan Document
or shall use the proceeds of any loan for an unauthorized purpose.

 

(E) Cross-Default. The Company should, after any applicable grace period, breach
or be in default under the terms of any other agreement between the Company and
CoBank, or between the Company and any affiliate of CoBank, including without
limitation Farm Credit Leasing Services Corporation.

 

(F) Other Indebtedness. The Company or any Subsidiary should fail to pay when
due any indebtedness to any other person or entity for borrowed money or any
long-term obligation for the deferred purchase price of property (including any
capitalized lease), or any other event occurs which, under any agreement or
instrument relating to such indebtedness or obligation, has the effect of
accelerating or permitting the acceleration of such indebtedness or obligation,
whether or not such indebtedness or obligation is actually accelerated or the
right to accelerate is conditioned on the giving of notice, the passage of time,
or otherwise.

 

 

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(G) Judgments. A judgment, decree, or order for the payment of money shall be
rendered against the Company or any Subsidiary and either: (1) enforcement
proceedings shall have been commenced; (2) a Lien prohibited under Section 9(B)
hereof shall have been obtained; or (3) such judgment, decree, or order shall
continue unsatisfied and in effect for a period of 20 consecutive days without
being vacated, discharged, satisfied, or stayed pending appeal.

 

(H) Insolvency, Etc. The Company or any Subsidiary shall: (1) become insolvent
or shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they come due; or (2) suspend its business
operations or a material part thereof or make an assignment for the benefit of
creditors; or (3) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, or other custodian for it or any of its property or, in the
absence of such application, consent, or acquiescence, a trustee, receiver, or
other custodian is so appointed; or (4) commence or have commenced against it
any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution, or liquidation Law of any jurisdiction.

 

(I) Material Adverse Change. Any material adverse change occurs, as reasonably
determined by CoBank, in the Company's financial condition, results of
operation, or ability to perform its obligations hereunder or under any
instrument or document contemplated hereby.

 

(J) Revocation of Guaranty. Any guaranty, suretyship, subordination agreement,
maintenance agreement, or other agreement furnished in connection with the
Company's obligations hereunder and under any Supplement shall, at any time,
cease to be in full force and effect, or shall be revoked or declared null and
void, or the validity or enforceability thereof shall be contested by the
guarantor, surety or other maker thereof (the "Guarantor"), or the Guarantor
shall deny any further liability or obligation thereunder, or shall fail to
perform its obligations thereunder, or any representation or warranty set forth
therein shall be breached, or the Guarantor shall breach or be in default under
the terms of any other agreement with CoBank (including any loan agreement or
security agreement), or a default set forth in Subsections (F) through (H)
hereof shall occur with respect to the Guarantor.

 

SECTION 12. Remedies. Upon the occurrence and during the continuance of an Event
of Default or any Potential Default, CoBank shall have no obligation to continue
to extend credit to the Company and may discontinue doing so at any time without
prior notice. For all purposes hereof, the term "Potential Default" means the
occurrence of any event which, with the passage of time or the giving of notice
or both would become an Event of Default. In addition, upon the occurrence and
during the continuance of any Event of Default, CoBank may, upon notice to the
Company, terminate any commitment and declare the entire unpaid principal
balance of the loans, all accrued interest thereon, and all other amounts
payable under this agreement, all Supplements, and the other Loan Documents to
be immediately due and payable. Upon such a declaration, the unpaid principal
balance of the loans and all such other amounts shall become immediately due and
payable, without protest, presentment, demand, or further notice of any kind,
all of which are hereby expressly waived by the Company. In addition, upon such
an acceleration:

 

(A) Enforcement. CoBank may proceed to protect, exercise, and enforce such
rights and remedies as may be provided by this agreement, any other Loan
Document or under Law. Each and every one of such rights and remedies shall be
cumulative and may be exercised from time to time, and no failure on the part of
CoBank to exercise, and no delay in exercising, any right or remedy shall
operate as a waiver thereof, and no single or partial exercise of any right or
remedy shall preclude any other or future exercise thereof, or the exercise of
any other right. Without limiting the foregoing, CoBank may hold and/or set off
and apply against the Company's obligation to CoBank the proceeds of any equity
in CoBank, any cash collateral held by CoBank, or any balances held by CoBank
for the Company's account (whether or not such balances are then due).

 

 

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(B) Application of Funds. CoBank may apply all payments received by it to the
company's obligations to CoBank in such order and manner as CoBank may elect in
its sole discretion. In addition to the rights and remedies set forth above: (1)
upon the occurrence and during the continuance of an Event of Default, then at
CoBank's option in each instance, the entire indebtedness outstanding hereunder
and under all Supplements shall bear interest from the date of such Event of
Default until such Event of Default shall have been waived or cured in a manner
satisfactory to CoBank at 4.00% per annum in excess of the rate(s) of interest
that would otherwise be in effect on that loan; and (2) after the maturity of
any loan (whether as a result of acceleration or otherwise), the unpaid
principal balance of such loan (including without limitation, principal,
interest, fees and expenses) shall automatically bear interest at 4.00% per
annum in excess of the rate(s) of interest that would otherwise be in effect on
that loan. All interest provided for herein shall be payable on demand and shall
be calculated on the basis of a year consisting of 360 days.

 

SECTION 13. Broken Funding Surcharge. Notwithstanding any provision contained in
any Supplement giving the Company the right to repay any loan prior to the date
it would otherwise be due and payable, the Company agrees to provide three
Business Days' prior written notice for any prepayment of a fixed rate balance
and that in the event it repays any fixed rate balance prior to its scheduled
due date or prior to the last day of the fixed rate period applicable thereto
(whether such payment is made voluntarily, as a result of an acceleration, or
otherwise), the Company will pay to CoBank a surcharge in an amount equal to the
greater of: (A) an amount which would result in CoBank being made whole (on a
present value basis) for the actual or imputed funding losses incurred by CoBank
as a result thereof; or (B) $300.00. Notwithstanding the foregoing, in the event
any fixed rate balance is repaid as a result of the Company refinancing the loan
with another lender or by other means, then in lieu of the foregoing, the
Company shall pay to CoBank a surcharge in an amount sufficient (on a present
value basis) to enable CoBank to maintain the yield it would have earned during
the fixed rate period on the amount repaid. Such surcharges will be calculated
in accordance with methodology established by CoBank (a copy of which will be
made available to the Company upon request).

 

SECTION 14. Complete Agreement, Amendments. This agreement, all Supplements, and
all other instruments and documents contemplated hereby and thereby, are
intended by the parties to be a complete and final expression of their
agreement. No amendment, modification, or waiver of any provision hereof or
thereof, and no consent to any departure by the Company herefrom or therefrom,
shall be effective unless approved by CoBank and contained in a writing signed
by or on behalf of CoBank, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. In
the event this agreement is amended or restated, each such amendment or
restatement shall be applicable to all Supplements hereto.

 

SECTION 15. Other Types of Credit. From time to time, CoBank may issue letters
of credit or extend other types of credit to or for the account of the Company.
In the event the parties desire to do so under the terms of this agreement, such
extensions of credit may be set forth in any Supplement hereto and this
agreement shall be applicable thereto.

 

SECTION 16. Applicable Law. Without giving effect to the principles of conflict
of laws and except to the extent governed by federal law, the Laws of the State
of Colorado, without reference to choice of law doctrine, shall govern this
agreement, each Supplement and any other Loan Documents for which Colorado is
specified as the applicable law, and all disputes and matters between the
parties to this agreement, including all disputes and matters whatsoever arising
under, in connection with or incident to the lending and/or leasing or other
business relationship between the parties, and the rights and obligations of the
parties to this agreement or any other Loan Documents by and between the parties
for which Colorado is specified as the applicable law.

 

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SECTION 17. Notices. All notices hereunder shall be in writing and shall be
deemed to be duly given upon delivery if personally delivered or sent by
telegram or facsimile transmission, or three days after mailing if sent by
express, certified or registered mail, to the parties at the following addresses
(or such other address for a party as shall be specified by like notice):

 

If to CoBank, as follows If to the Company, as follows:

 

For general correspondence purposes: South Dakota Soybean Processors, LLC P.O.
Box 5110 Box 500 Denver, Colorado 80217-5110 Volga, South Dakota 57071     For
direct delivery purposes, when desired:   5500 South Quebec Street   Greenwood
Village, Colorado 80111-1914       Attention: Credit Information Services
Attention:  CEO Fax No.: (303)224-6101 Fax No.: (605) 6275869

  

SECTION 18. Taxes and Expenses. To the extent allowed by law, the Company agrees
to pay all reasonable out-of-pocket costs and expenses (including the fees and
expenses of counsel retained or employed by CoBank) incurred by CoBank and any
participants from CoBank in connection with the origination, administration,
collection, and enforcement of this agreement and the other Loan Documents,
including, without limitation, all costs and expenses incurred in perfecting,
maintaining, determining the priority of, and releasing any security for the
Company's obligations to CoBank, and any stamp, intangible, transfer, or like
tax payable in connection with this agreement or any other Loan Document.

 

SECTION 19. Effectiveness and Severability. This agreement shall continue in
effect until: (A) all indebtedness and obligations of the Company under this
agreement, all Supplements, and all other Loan Documents shall have been paid or
satisfied; (B) CoBank has no commitment to extend credit to or for the account
of the Company under any Supplement; and (C) either party sends written notice
to the other terminating this agreement. Any provision of this agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
thereof.

 

SECTION 20. Successors and Assigns. This agreement, each Supplement, and the
other Loan Documents shall be binding upon and inure to the benefit of the
Company and CoBank and their respective successors and assigns, except that the
Company may not assign or transfer its rights or obligations under this
agreement, any Supplement or any other Loan Document without the prior written
consent of CoBank.

 

SECTION 21. Participations, Etc. From time to time, CoBank may sell to one or
more banks, financial institutions, or other lenders a participation in one or
more of the loans or other extensions of credit made pursuant to this agreement.
However, no such participation shall relieve CoBank of any commitment made to
the Company hereunder. In connection with the foregoing, CoBank may disclose
information concerning the Company and its Subsidiaries, if any, to any
participant or prospective participant, provided that such participant or
prospective participant agrees to keep such information confidential. Patronage
distributions in the event of a sale of a participation interest shall be
governed by CoBank's Bylaws and Capital Plan (as each may be amended from time
to time). A sale of a participation interest may include certain voting rights
of the participants regarding the loans hereunder (including without limitation
the administration, servicing, and enforcement thereof). CoBank agrees to give
written notification to the Company of any sale of a participation interest.

  

SECTION 22. Amendment Fee. In consideration of the amendment, the Company agrees
to pay to CoBank on the execution hereof, a fee in the amount of $7,500.00.

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IN WITNESS WHEREOF, the parties have caused this agreement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB   SOUTH DAKOTA SOYBEAN PROCESSORS,  LLC                     By:    
By:   /s/ Thomas J. Kersting           Title:     Title:  Chief Executive
Officer

 

 

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