**Exhibit 10.21**

 

**MASTER LOAN AGREEMENT**

 

THIS MASTER LOAN AGREEMENT is entered into as of October 6, 2005,between CoBANK, ACB (“CoBank”) and SOUTH DAKOTA SOYBEAN PROCESSORS, LLC, Volga,South Dakota (the “Company”).

 

**BACKGROUND**

 

CoBankand the Company are parties to a Master Loan Agreement dated June 14, 2004,(the “Existing Agreement”). Pursuant to the terms of the Existing Agreement,the parties entered into one or more Supplements thereto. CoBank and theCompany now desire to amend and restate the Existing Agreement and to applysuch new agreement to the existing Supplements, as well as any new Supplementsthat may be issued thereunder. For that reason and for valuable consideration(the receipt and sufficiency of which are hereby acknowledged), CoBank and theCompany hereby agree that the Existing Agreement shall be amended and restatedto read as follows:

 

**SECTION 1. Supplements**. In the event the Company desires to borrowfrom CoBank, and CoBank is willing to lend to the Company, or in the eventCoBank and the Company desire to consolidate any existing loans hereunder, theparties will enter into a Supplement to this agreement (a “Supplement”). EachSupplement will set forth the amount of the loan, the purpose of the loan, theinterest rate or rate options applicable to that loan, the repayment terms ofthe loan, and any other terms and conditions applicable to that particular loan.Each loan will be governed by the terms and conditions contained in thisagreement and in the Supplement relating to the loan. As of the date hereof,the following the following Supplements are outstanding and shall be governedby the terms and condition& hereof: (a) the Statused Revolving CreditSupplement dated as of October 6, 2005, and numbered RIBO51S01 and (b) the RevolvingTerm Loan Supplement dated as of October 6,2005, and numbered R1B051T05.

 

**SECTION 2. Availability**. Loans will be made available on any day onwhich CoBank and the Federal Reserve Banks are open for business upon thetelephonic or written request of the Company. Requests for loans must bereceived no later than 12:00 Noon Company’s local time on the date the loan isdesired. Loans will be made available by wire transfer of immediately availablefunds to such account or accounts as maybe authorized by the Company. TheCompany shall furnish to CoBank a duly completed and executed copy of a CoBankDelegation and Wire and Electronic Transfer Authorization Form, and CoBankshall be entitled to rely on (and shall incur no liability to the Company inacting on) any request or direction furnished in accordance with the termsthereof.

 

**SECTION 3. Repayment**. The Company’s obligation to repay each loanshall be evidenced by the promissory note set forth in the. Supplement relatingto that loan or by such replacement note as CoBank shall require. CoBank shallmaintain a record of all loans, the interest accrued thereon, and all paymentsmade with respect thereto; and such record shall, absent proof of manifesterror, be conclusive evidence of the outstanding principal and interest on theloans. All payments shall be made by wire transfer of immediately availablefunds, by check, or by automated clearing house-or other similar cash handlingprocesses as specified by separate agreement between the Company and CoBank.Wire transfers shall be made to ABA No. 307088754 for advice to and credit ofCoBank (or to such other account as CoBank may direct by notice)1 The Companyshall give CoBank telephonic notice no- later than 12:00 Noon Company’s localtime of its intent to pay by wire and funds received after 3:00 p.m.Company’slocal time shall be credited on the next business day. Checks shall be wailedto CoBank,

 

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Master Loan Agreement REBO5 1

South Dakota Soybean Processors, LLC

Volga,South Dakota

 

Department167, Denver, Colorado 80291-0167 (or to such other place as CoBank may directby 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) thenext business day after receipt of the check

 

SECTION4. **Capitalization.** The Companyagrees to purchase such equity in CoBank as CoBank may from time to time require in accordance with its Bylaws.However, the maximum amount of equity. which the Company shall be obligated topurchase in connection with any loan may not exceed the maximum amountpermitted by the Bylaws at the time the Supplement relating to that loan isentered into or such loan is renewed or refinanced by CoBank.

 

SECTION5. **Security.** The Company’sobligations under this agreement, all Supplements (whenever executed), and allinstruments and documents contemplated hereby or thereby, shall be secured by astatutory first lien on all equity which the Company may now own or hereafteracquire 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 allsecurity agreements, mortgages, and deeds of trust executed by the Company in favorof CoBank, whether now existing or hereafter entered into. As additionalsecurity for those obligations:

(i)the Company agrees to grant to CoBank, by means of such instruments anddocuments as CoBank shall require a first priority lien on such of its otherassets, whether now existing or hereafter acquired, as CoBank may from timeto time require; and (ii) the Company agrees to grant to CoBank, by means ofsuch instruments and documents as CoBank shall require, a first priority lienon all realty which the Company may from time to time acquire after the datehereof.

 

SECTION6. **Conditions Precedent.**

 

(A)       **Conditions to InitialSupplement**. CoBank’sobligation to extend credit under the initial Supplementhereto is subject to the conditions precedent that CoBank receive, in form andcontent satisfactory to CoBank, a duly executed copy of this agreement and allinstruments and documents contemplated hereby.

 

(B)       **Conditions to EachSupplement**. CoBank’sobligation to extend credit under each Supplement, including the initialSupplement, is subject to the conditions precedent that CoBank receive, in fontand content satisfactory to CoBank, each of the following:

 

(i)       **Supplement.** A duly executed copy of the Supplement andall instruments and documents contemplated thereby.

 

(ii)      **Evidence of Authority.** Such certified board resolutions,certificates of incumbency, and other evidence that CoBank may require that theSupplement, all instruments and document executed in connection therewith,arid, in the case of initial Supplement hereto, this agreement and allinstruments and documents executed in connection herewith, have been dulyauthorized and executed.

 

(iii)     **Fees and Other Charges.** All fees arid other charges providedfor herein or in the Supplement.

 

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

 

(C)       **Conditions to Each****Loan.**CoBank’sobligation under each Supplement to make any loan to the Company thereunder issubject to the condition that no “Event of Default’ (as defined in Section 11hereof) or event which with the giving of notice and/or the passage of timewould become an Event of Default hereunder (a ‘Potential Default”), shall haveoccurred and be continuing.

 

SECTION 7. **Representationsand Warranties.**

 

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

 

(i)       **Compliance.** The Company and, to the extent contemplatedhereunder, each “Subsidiary” (asdefined below); is in compliance withall of the terms of this agreement,and no Event of Default or Potential Default existshereunder.

 

(ii)      **Subsidiaries.** TheCompany has the following “Subsidiary(ies)” (as defined below): Urethane SoySystems Company. For purposes hereof a “Subsidiary” shall mean a corporation ofwhich shares of stock having ordinary voting power to elect a majority of theboard of directors or other managers of such corporation are owned, directly orindirectly, by the Company.

 

(B)       **Each Supplement.** The execution by the Company pf eachSupplement hereto shall

 

constitutea representation and warranty to CoBank that:

 

(i)       **Applications.** Each representation and warranty and allinformation set forth in any application or other documents submitted inconnection with, or to induce CoBank to enter into, such Supplement, is correctin all material respects as of the dateof the Supplement.

 

(ii)      **Conflicting Agreements, Etc.**This agreement, theSupplements, and all security and other instruments and documents relatinghereto and thereto (collectively, at any time, the “Loan Documents”), do notconflict with, or require the consent of any party to, any other agreement towhich the Company is a party or by which it or its property may be bound oraffected, and do not conflict with any provision of the Company’s bylaws,articles of incorporation, or other organizational documents.

 

(iii)**    ****Compliance.**TheCompany and, to the extent contemplated hereunder, each Subsidiary, isin compliance with all of the terms ofthe Loan Documents (including, without limitation, Section 8(A) of this agreement on eligibility to borrow from CoBank).

 

(iv)    **Binding Agreement**. The Loan Documents create legal, valid, andbinding obligations of theCompany which are enforceable in accordance with their terms, except to theextent that enforcement may be limited by applicable bankruptcy, insolvency, orsimilar laws affecting creditors’ rights generally.

 

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**SECTION 8. Affirmative Covenants;** Unlessotherwise agreed to in writing by****CoBankwhile this agreement is in effect, the Company agrees to and with respect toSubsections 8(B) through 8(G) hereof, agrees to cause each Subsidiary to:

 

(A)       **Eligibility**. Maintain its status as an entity eligibleto borrow from CoBank.

 

(B)        **Corporate Existence,Licenses, Etc**. (i) Preserveand keep in fill force and effect its existence and good standing in thejurisdiction of****its incorporationor formation; (ii) qualify and remain qualified to transact business in alljurisdictions where such qualification is required; and (iii) obtain andmaintain all licenses, certificates, permits, authorizations, approvals, andthe like which are material to the conduct of its business or required by law,rule, regulation, ordinance, code, order, and the like (collectively, “Laws”).

 

(C)        **Compliance with Laws.** Comply in all material respects with allapplicable Laws, including, without limitation, all Laws relating toenvironmental protection and any patron or member investment program that itmay have. In addition, the Company agrees to cause all persons occupying orpresent on any of its properties, and to cause each Subsidiary to cause allpersons occupying or present on any of its properties, to comply in allmaterial respects with allenvironmental protection Laws.

 

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

 

**(E)****       ****Property Maintenance**. Maintain all of its property that isnecessary to or useful in the proper conduct of its business in good workingcondition, ordinary wear and tear excepted.

 

**(F)****        Booksand Records.**Keep adequate records and books of account in which complete entries will be made in accordancewith generally accepted accounting principles (“GAAS”) consistently applied.

 

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

 

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**(H)****      ****Reports**and **Notices.**Furnish to CoBank**:**

 

(i)      AnnualFinancial Statements. As soon as available, but in no event more than 90 daysafter the end of each fiscal year of the Company occurring during the termhereof, annual consolidated and consolidating financial statements of theCompany and its consolidated Subsidiaries, if any, prepared in accordance with GAAP consistently applied. Suchfinancial statements shall: (a) be audited by independent certified publicaccountants selected by the Company and acceptable to CoBank; (b) beaccompanied by a report of such accountants containing an opinion thereonacceptable to CoBank; (c) be prepared in reasonable detail and incomparative form; and (d) include a balance sheet, a statement of income, astatement of retained earnings, a statement of cash flows, and all notes andschedules relating thereto.

 

(ii)      **Interim FinancialStatements.** As soon asavailable, but in no event more than -30 days after the end ofeach month (other than the last month in each fiscal year of the Company), aconsolidated balance sheet of the Company and its consolidated Subsidiaries, ifany, as of the end of such month, a consolidated statement of income for theCompany 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, allprepared in reasonable detail and in comparative form in accordance with GAASconsistently applied and, if required by written notice from CoBank, certifiedby an authorized officer or employee of the Company acceptable to CoBank.

 

(iii)     **Notice of Default.** Promptly after becoming aware thereof,notice - of the occurrence of an Event of Default or aPotential Default.

 

(iv)    **Notice of Non-EnvironmentalLitigation.** Promptly afterthe commencement -thereof, notice of the commencement of allactions, suits, or proceedings before any court, arbitrator, or governmentaldepartment, commission, board, bureau, agency, or instrumentality affecting theCompany or any Subsidiary which, if determined adversely to the Company or anysuch Subsidiary, could have~ a material adverse effect on the financialcondition, properties, profits, or operations of the Company or any suchSubsidiary.

 

(v)     **Notice of EnvironmentalLitigation, Etc**. Promptlyafter receipt thereof, notice of the receipt of all pleadings, orders,complaints, indictments, or any other communication alleging a condition thatmay require the Company or any Subsidiary to undertake or to contribute to acleanup or other response under environmental Laws, or which seek penalties,damages, injunctive relief, or criminal sanctions related to alleged violationsof such Laws, or which claim personal injury or property damage to any personas a result of environmental factors or conditions.

 

(vi)    **Bylaws and Articles.** Promptly after any change in the Company’sbylaws or articles of incorporation (or like documents), copies of all such changes,certified by the Company’s

 

Secretary.

 

(vii)   **Other Information.** Such other information regarding thecondition or operations, financial or otherwise, of the Company or anySubsidiary as CoBank may from time to time reasonably request, including butnot limited to copies of all pleadings, notices, and communications referred toin Subsections 8(H)(iv) and (v) above.

 

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**SECTION 9. Negative Covenants.** Unless otherwise agreed to in writing byCoBank, while this agreement is in effect the Company will not and will notpermit its Subsidiaries to:

 

(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, -orthe deferred purchase price of property or services, except fort (i) debt toCoBank; (ii) accounts payable to trade creditors incurred in the ordinarycourse of business; (iii) current operating liabilities (other than forborrowed -money) incurred in the ordinary course of business; (iv) indebtednessof the

 

Company under its member or patron investmentprogram, provided, however, that such indebtedness is expressly stated to besubordinate in right of payment to all obligations of the Company to CoBank;(v) debt of the Company to Urethane Soy Systems Company’s shareholders in anamount not to exceed $l,782,000.00, but no extensions, renewals andrefinancings thereof; and (vi) debt of the Company to miscellaneous creditors in an aggregateamount not to exceed $1,000,000.00.

 

(B)     **Liens.** Create, incur, assume, or allow to exist anymortgage, deed of trust, pledge, lien (including the lien of an attachment,judgment, or execution), security interest, or - other encumbrance ofany kind upon any of its property, real or peráonal (collectively, “Liens”).The foregoing restrictions shall not apply to: (i) Liens in favor of CoBank;(ii) Liens for taxes, assessments, or governmental charges that are not pastdue; (iii) Liens and deposits under workers’ compensation, unemploymentinsurance, and social security Laws; (iv) Liens and deposits to secure theperformance of bids, tenders, contracts (other than contracts for the paymentof money), and like obligations arising in the ordinary course of business asconducted on the date hereof; (v) Liens imposed by Law in favor of mechanics,materialmen, warehousemen, and like persons that secure obligations that arenot past due; (vi) easements, rights-of-way, restrictions, and other similar encumbranceswhich, in the aggregate, do not materially interfere with the occupation, use;and enjoyment of the property or assets encumbered thereby in the normal courseof its business or materially impair the value of the property subject thereto;(vii) Liens existing on the date hereof in favor of Urethane Soy SystemsCompany shareholders to secure indebtedness permitted hereunder; and (viii)Liens to miscellaneous creditors to secure indebtedness permitted hereunder.

 

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

 

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

 

(E)     **Loans and Investments.** Make any loan or advance to any person orentity, or purchase any capital stock; obligations or other securities of, makeany capital contribution to, or otherwise invest in any person or entity, orform or create any partnerships or joint ventures except trade credit extendedin the ordinary course of business.

 

(F)     **Contingent Liabilities.** Assume, guarantee, become liable as asurety, endorse, contingently agree to purchase, or otherwise be or becomeliable, directly or indirectly (including, but not -limited to, by means of amaintenance agreement, an asset or stock purchase agreement, or any otheragreement designed to ensure any creditor against loss), for or on account ofthe obligation of any person or entity, except by the endorsement of negotiableinstruments for deposit or collection or similar

 

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transactionsin the ordinary course of the Company’s business

 

(G)     **Change in Business**. Engage in any business activities oroperations substantially different from or unrelated to the Company’s presentbusiness activities or operations.

 

(H)     **Dividends, Etc.** Declare or pay any dividends, or make anydistribution of assets to the stockholders, or purchase, redeem, retire orotherwise acquire for value any of its capital stock, or allocate or otherwiseset apart any sum for any of the foregoing except that in any fiscal year,provided the Company is operating on a profitable basis and there is no Eventof Default under the terms hereunder, the Company may distribute earnings inthe form of cash.

 

(E)     **Leases**. Create, incur, assume, or permit to exist any obligation as lessee under operating leasesor leases which should be capitalized in accordance with GAAP for the rental orhire of any real or personalproperty, except: (i) leases of soybean oil storage tank space with aggregateannual payments not to exceed$400,000.00; (ii) leases of up to 400 tanker and/or hopper railroad cars underterms and conditions acceptable to CoBank; (iii) leases of other railroad cars,excluding those allowed in (ii) above, with original maturities of less thansixty (60) months at the Company’s discretion; and (iv) other leases,excluding those allowed above, which do not in the aggregate require the Company to make scheduled payments to thelessors in any fiscal year of the Company during the term hereof in excess of $550,000.00.

 

**SECTION 10. FinancialCovenants.** Unlessotherwise agreed to in writing, while this agreement is in effect:

 

**(A)****     WorkingCapital**. The Company and its consolidated Subsidiaries will have at the endof each period for which financial statements are required to be furnishedpursuant to Section 8(11) hereof an excess of consolidated current assets overconsolidated current liabilities (both as determined in accordance with GAAPconsistently appl4ed) of not less than $6,000,000.00, except that in determiningconsolidated current assets any amount available under the Revolving Term LoanSupplement hereto (less  the amount thatwould be considered a current liability under GAAP if fully advanced) shall beincluded, and except that in determining consolidated current liabilities, anyoutstanding principal balance under the Revolving Credit Supplement heretoshall be included.

 

**(B)****     DebtService Coverage Ratio.** The Company and its consolidated Subsidiaries willhave at the end of each fiscal year of the Company a. debt Service CoverageRatio” (as defined below) for such fiscal year of not less than 1.2 to 1.0. Forpurposes hereof, the term “Debt Service Coverage Ratio” shall mean thefollowing (all as calculated on a consolidated basis for the most current yearend in accordance with GAAP consistently applied, except as indicated): (i) netincome (after taxes), plus depreciation and amortization, minus non-cashpatronage income, minus gain (+ loss) on the minority interest of Subsidiary;divided by (ii) 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 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.

 

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

 

(C)     **Certain AffirmativeCovenants.** The Company or,to the extent required-hereunder, any Subsidiary should fail to perform orcomply with Sections 8(A) through 8(H)(ii), 8(l1)(vi) or any reporting covenantset forth in any Supplement hereto, and such failure continues for 15 daysafter written notice thereof shall have been delivered by CoBank to theCompany.

 

(D)     **Other Covenants andAgreements**. The Company or,to the extent required hereunder, any Subsidiary should fail to perform orcomply with any other covenant or agreement contained herein or in any otherLoan Document or shall use the proceeds of any loan for an unauthorizedpurpose.

 

(E)     **Cross-Default.** The Company should, after any applicablegrace period, breach or be in default under the terms of any other agreementbetween the Company and CoBank.

 

(F)     **Other Indebtedness.** The Company or any Subsidiary should fail topay when due any indebtedness to any other person or entity for borrowed moneyor any long-tent obligation for the deferred purchase price of property(including any capitalized lease), or any other event occurs which, under anyagreement or instrument relating to such indebtedness or obligation, has theeffect of accelerating or permitting the -acceleration of such indebtedness orobligation, whether or not such indebtedness or obligation is actuallyaccelerated or the right to accelerate is conditioned on the giving of notice,the passage of time, or otherwise,

 

(G)     **Judgments.** A judgment, decree, or order for the payment ofmoney shall be rendered against the Company or any Subsidiary and either: (i)enforcement proceedings shall have been commenced, (ii) a Lien prohibited underSection 9(B) hereof shall have been obtained; or (iii) such judgment, decree,or order shall continue unsatisfied and in effect for a period of 20 consecutivedays without being vacated, discharged, satisfied, or stayed pending appeal.

 

(H)     **Insolvency, Etc.** The Company or any Subsidiary shall: (i)become insolvent or shall generally not, or shall be unable to, or shall admitin writing its inability to, pay its debts as they come -due; or (ii) suspendits business operations or a material part thereof or make an assignment forthe benefit of creditors; or (iii) apply for, consent to, or acquiesce in theappointment of a trustee, receiver, or other custodian for it or any of itsproperty or, in the absence of such application, consent, or acquiescence, atrustee, receiver, or other custodian is so appointed, or (iv) commence or havecommenced against it any -proceeding under any bankruptcy, reorganization,arrangement, readjustment of debt, dissolution, or liquidation Law of anyjurisdiction.

 

(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 underany instrument or document contemplated hereby.

 

(J)      **Revocation of Guaranty**. Any guaranty, suretyship, subordinationagreement, maintenance agreement, or other agreement furnished in connectionwith the Company’s obligations hereunder and under any Supplement shall, at anytime, cease to be in full force and effect, or shall be revoked or declarednull and void, or the validity or enforceability thereof shall be contested bythe

 

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guarantor, surety or other maker thereof (the“Guarantor”), or the Guarantor shall deny any further liability orobligation thereunder, or shall fail to perform its obligations thereunder, orany representation or warranty set forth therein shall be breached, or theGuarantor 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 inSubsections (F) through (B) hereof shall occur with respect to the Guarantor.

 

**SECTION 12.****Remedies.**Upon the occurrence and****during the continuance of an Event ofDefault or any Potential Default, CoBank shall have no obligation to continueto extend credit to the Company and may discontinue doing so at any timewithout prior notice. For all purposes hereof, the term “Potential Default”means the occurrence of any event which, with the passage of time or the givingof notice or both would become an Event of Default. In addition, upon theoccurrence and during the continuance of any Event of Default, CoBank may, uponnotice to the Company, terminate any commitment and declare the entire unpaidprincipal balance of the loans, all accrued interest thereon, and all otheramounts payable under this agreement, all Supplements, and the other LoanDocuments to be immediately due and payable. Upon such a declaration, theunpaid principal balance of the loans and all such other amounts shall becomeimmediately due and payable, without protest, presentment, demand, or furthernotice of any kind, all of which are hereby expressly waived by the Company. Inaddition, upon such an acceleration:

 

**(A)****    ****Enforcement.** CoBank may proceed to protect, exercise, andenforce such rights and remedies as may be provided by this agreement, anyother Loan Document or under Law. Each and every one of such rights andremedies shall be cumulative and may be exercised from time to time, and nofailure on the part of CoBank to exercise, and no delay in exercising, anyright or remedy shall operate as a waiver thereof, and no single or partialexercise of any right or remedy shall preclude any other or future exercisethereof, or the exercise of any other right. Without limiting the foregoing,CoBank may hold and/or set off and apply against the Company’s obligations toCoBank the proceeds of any equity in CoBank, any cash collateral held byCoBank, or any balances held by CoBank for the Company’s account (whether ornot such balances are then due).

 

**(B)****    ****Application of Funds.** CoBank may apply all payments received by itto the Company’s obligations to CoBank in such order and manner as CoBank mayelect in its sole discretion.

 

Inaddition to the rights and remedies set forth above: (i) if the Company failsto purchase any equity in CoBank when required or fails to make any payment toCoBank when due, then at CoBank’s option in each instance, such payment shallbear interest from the date due to the date paid at 4% per annum in excess ofthe rate(s) of interest that would otherwise be in effect on that loan; and(ii) after the maturity of any loan (whether as a result of acceleration or.otherwise), the unpaid principal balance of such loan (including withoutlimitation, principal, interest, fees and expenses) shall automatically bearinterest at 4% per annum in excess of the rate(s) .of interest that wouldotherwise be in effect on that loan. All interest provided for herein shall bepayable on demand and shall be calculated on the basis of a year consisting of360 days.

 

**SECTION 13. Broken Funding Surcharge.**Notwithstanding any provision contained inany Supplement giving the Company the right to repay any loan prior to the-date it would otherwise be  dueand payable, the Company agrees to-provide three Business Days’ prior writtennotice for any prepayment of a fixed rate balance and that in the event itrepays any fixed rate balance prior to its scheduled due date or prior to thelast day of the fixed rate period applicable thereto (whether such Master 

 

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paymentis made voluntarily, as a result of an acceleration, or otherwise), the Companywill pay to CoBank a surcharge in an amount equal to the greater of: (i) anamount which would result in CoBank being made whole**(**on a present value basis) for the actual or imputed fundinglosses incurred by CoBank as a result thereof or (ii) $300.00. Notwithstandingthe foregoing, in the event any fixed rate balance is repaid as a result of theCompany refinancing the loan with another lender or -by other means, then inlieu of the foregoing, the Company shall pay to CoBank a surcharge in an amountsufficient (on a present value basis) to enable CoBank to maintain the yield itwould have earned during the fixed rate period on the amount repaid. Suchsurcharges will be calculated in accordance with methodology established byCoBank (a copy of which will be made available to the Company upon request).

 

**SECTION 14. Complete Agreement, Amendments.**Thisagreement, all Supplements, and all other instruments and documentscontemplated hereby and thereby, are intended by the parties to be a completeand final expression of their agreement. No amendment, - modification, or waiver of any provision hereof or thereof, andno consent to any departure by the Company herefrom or therefrom, shall beeffective unless approved by CoBank and contained in a writing signed by or onbehalf of CoBank, and then such waiver or consent shall be effective only inthe specific instance and for the specific -purpose for which given. In the event this agreement is amendedor restated, each such amendment or restatement shall be applicable to allSupplements hereto.

 

**SECTION 15. Other Types of Credit.**From time to time, CoBank may issue lettersof 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 thisagreement shall be applicable thereto.

 

**SECTION 16. Applicable Law.** Except to the extent governed by applicablefederal law, this agreement and each Supplement shall be governed by andconstrued in accordance with the laws of the State of Colorado, withoutreference to choice of law doctrine.

 

**SECTION 17. Notices**. All notices hereunder shall be in writing and shall be deemed to beduly given upon delivery if personally delivered or sent by telegram orfacsimile transmission, or three days after mailing if sent by express,certified or registered mail, to the parties at the following addresses (orsuch 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                                |   | Box500                               |
| Denver, Colorado 80217-5110 -               |   | Volga, South Dakota 57071            |
| For direct delivery purposes, when desired: |   | Attention: CEO                       |
| 5500 South Quebec Street                    |   | Fax No.: *(605)** ***627-5869   |
| Greenwood Village, Colorado 80111-1914      |   |                                 |
|                                        |   |                                 |
| Attention: Credit  Information Services     |   |                                 |
| Fax No: (303)224-6101                       |   |                                 |

 

**SECTION18.****Taxes and Expenses.** To the extent allowed by law, the Company agrees to pay all reasonableout-of-pocket costs and expenses (including the fees and expenses of counselretained or employed by CoBank) incurred by CoBank and any participants fromCoBank in connection with the

 

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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 priority of; and releasing any security for theCompany’s obligations to CoBank, and any stamp, intangible, transfer, or liketax payable in connection with this agreement or any other Loan Document.

 

**SECTION 19. Effectiveness and Severability.**This agreement shall continue in effect until: (i) all indebtedness andobligations of the Company under this agreement, all Supplements, and all otherLoan Documents shall have been paid or satisfied; (ii) CoBank has no commitmentto extend credit to or for the account of the Company under any Supplement; and(iii) either party sends written notice to the other terminating thisagreement. Any provision of this agreement or any other Loan Document which isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions hereof or thereof.

 

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

 

**SECTION 21. Participations, Etc**.From time to time, CoBank may sell to one or more banks, financial institutionsor other lenders a participation in one or more of the loans or otherextensions of -credit made pursuant to this agreement. However, no suchparticipation shall relieve CoBank of any commitment made to the Company underany Supplement hereto. In connection with the foregoing, CoBank may discloseinformation concerning the Company and its Subsidiaries to any participant orprospective participant, provided that such participant or prospectiveparticipant agrees to keep such information confidential. A sale ofparticipation interest may include certain voting rights of the participantsregarding the loans hereunder (including without limitation the administration,servicing and enforcement thereon. CoBank agrees to give written notificationto the Company of any sale of participation interests.

 

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

 
| **CoBANK, ACB** | **SOUTH DAKOTA**              |
|-----------------|-------------------------------|
|            |                          | **SOY BEAN PROCESSORS, LLC** |
|            |                          |   |   |   |   |
| By:             | /s/ Pat Schultz               |   | By: | /s/ Rodney Christianson |   |
|            |                          |   |   |   |   |
| Title:          | Assistant Corporate Secretary |   | Title: | CEO |   |

 

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