MONITORED REVOLVING CREDIT SUPPLEMENT
EXHIBIT
10.2
THIS SUPPLEMENT to the Master
Loan Agreement dated May 3. 2010 (the “MLA”), is entered into as of October 14,
2010 between CoBANK, ACB
(“CoBank”) and SOUTH DAKOTA
SOYBEAN PROCESSORS, LLC, Volga, South Dakota (the “Company”), and amends
and restates the Supplement dated August 12, 2010 and numbered
RIB051S01L.
SECTION 1. The Revolving Credit
Facility. On the terms and conditions set forth in the MLA and this
Supplement. CoBank agrees to make loans to the Company during the period set
forth below in an aggregate principal amount not to exceed, at any one time
outstanding, $40,000,000.00 (the Commitment”); provided, however that the amount
available under the Commitment shall not exceed the “Borrowing Base” (as
calculated pursuant to the Borrowing Base Report attached hereto as Exhibit A)
on the date for which Borrowing Base Reports are required pursuant to Section 6
below. Within the limits of the Commitment, the Company may borrow, repay, and
reborrow.
SECTION
2. Purpose. The purpose of the
Commitment is to finance the inventory and receivables referred to in the
Borrowing Base Report.
SECTION
3. Term. The term of the
Commitment shall be from the date hereof, up to and including July 1. 2011, or
such later date as Col3ank may, in its sole discretion, authorize in
writing.
SECTION
4. Interest. The Company agrees
to pay interest on the unpaid balance of the loan(s) in accordance with one or
more of the following interest rate options, as selected by the
Company:
(A) One-Month LIBOR Index Rate. At
a rate (rounded upward to the nearest 1/100th and adjusted for reserves required
on “Eurocurrency Liabilities” [as hereinafter defined] for banks subject to “FRB
Regulation D” [as hereinafter defined] or required by any other federal law or
regulation) per annum equal at all times to 3.85% above the rate quoted by the
British Bankers Association (the “BBA”) at 11:00 a.m. London time for the
offering of one (1)-month U.S. dollars deposits. as published by Bloomberg or
another major information vendor listed on BBA’s official website on the first
“U.S. Banking Day” (as hereinafter defined) in each week, with such rate to
change weekly on such day. The rate shall be reset automatically, without the
necessity of notice being provided to the Company or any other party, on the
first “U.S. Banking Day” of each succeeding week, and each change in the rate
shall be applicable to all balances subject to this option. Information about
the then-current rate shall be made available upon telephonic request. For
purposes hereof: (1) “U.S. Banking Day” shall mean a day on which CoBank is open
for business and banks are open for business in New York, New York; (2)
“Euroeurrency Liabilities” shall have the meaning as set forth in “FRU
Regulation D”; and (3) “FRB Regulation D” shall mean Regulation D as promulgated
by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as
amended.
(B) Quoted
Rate. At a fixed rate per annum to be quoted by CoBank in its sole discretion in
each instance. Under this option, rates may be fixed on such balances and for
such periods, as may be agreeable to CoBank in its sole discretion in each
instance, provided that: (1) the minimum fixed period shall be 30 days; (2)
amounts may be fixed in increments of $500,000.00 or multiples thereof: and (3)
the maximum number of fixes in place at any one time shall be
ten.
The
Company shall select the applicable rate option at the time it requests a loan
hereunder and may, subject to the limitations set forth above, elect to convert
balances bearing interest at the variable rate option to one of the fixed rate
options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is
repaid or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, rates may not be fixed for periods expiring after
the maturity date of the loans. All elections provided for herein shall be made
telephonically or in writing and
must be received by 12:00 Noon Company’s local time. Interest shall be
calculated on the actual
number of days each loan is outstanding on the basis of a year consisting
of 360 days and shall be payable monthly in arrears by the 20th day of the
following month or on such other day in such month as CoBank shall require in a
written notice to the Company.
SECTION
5. Promissory Note. The Company
promises to repay the unpaid principal balance of the loans on the last day of
the term of the Commitment. In addition to the above, the Company promises
to pay interest on the unpaid principal balance of the loans at the times and in
accordance with the provisions set forth in Section 4 hereof. This note replaces
and supersedes, but does not constitute payment of the indebtedness evidenced
by, the promissory note set forth in the Supplement being amended and restated
hereby.
SECTION
6. Borrowing Base Reports, Etc.
The Company agrees to furnish a Borrowing Base Report to CoBank at such times or
intervals as CoBank may from time to time request. Until receipt of such a
request, the Company agrees to furnish a Borrowing Base Report to CoBank within
30 days after each month end calculating the Borrowing Base as of the last day
of the month. for which the report is being furnished. However, if no balance is
outstanding hereunder on the last day of such month, then no Report need be
furnished, If on the date for which a Borrowing Base Report is required the
amount outstanding under the Commitment exceeds the Borrowing Base, the Company
shall immediately notify CoBank and repay so much of the loans
as is necessary to reduce the amount outstanding under the Commitment to the
limits of the Borrowing Base.
SECTION
7. Letters of Credit. If
agreeable to CoBank in its sole discretion in each instance, in addition to
loans, the Company may utilize the Commitment to open irrevocable letters of
credit for its account. Each letter of credit will he issued within a reasonable
period of time after Cobank’s receipt of a duly completed and executed copy of
CoBank’s then current form of Application and Reimbursement Agreement or, if
applicable, in accordance with the terms of any CoTrade Agreement between the
parties, and shall reduce the amount available under the Commitment by the
maximum amount capable of being drawn thereunder. Any draw under any letter of
credit issued hereunder shall be deemed a loan under the Commitment and shall be
repaid in accordance with this Supplement. Each letter of credit must be in form
and content acceptable to CoBank and must expire no later than the maturity date
of the Commitment. Notwithstanding the forgoing or any other provision hereof,
the maximum amount capable of being drawn under each letter of credit must be
statused against the Borrowing Base in the same manner as if it were a loan, and
in the event that (after repaying all loans) the maximum amount capable of being
drawn under the letters of credit exceeds the Borrowing Base, then the Company
shall immediately notify CoBank and pay to CoBank (to be held as cash
collateral) an amount equal to such excess.
SECTION
8. Security. The Company’s
obligations hereunder and, to the extent related hereto, the MLA. shall be
secured as provided in the Security Section of the MLA, including without
limitation as a future advance under any existing mortgage or deed of
trust.
SECTION
9. Collateral Inspections. In
consideration of the loans made hereunder, the Company will permit CoBank or its representatives, agents or
independent contractors, during normal business hours or at such other times as
CoBank and the Company may agree to: (A) inspect or examine the Company’s
properties. books and records; (B) make copies of the Company’s books and records; and (C) discuss the
Company’s affairs, finances and accounts with its officers, employees and independent certified public
accountants. Without limiting the foregoing, the Company will permit CoBank,
through an employee of CoBank or through an independent third party contracted
by CoBank, to conduct on an annual basis a review of the collateral covered by
the Security Agreement. The Company further agrees to pay to CoBank a collateral
inspection fee designated by CoBank and reimburse CoBank all reasonable costs and expenses incurred by CoBank
in connection with such collateral inspection reviews performed by CoBank
employees or its agents.
SECTION 10. Amendment Fee. In
consideration of the amendment, the Company agrees to pay to CoBank on the
execution hereof a fee in the amount of $14.00th00.
SECTION 11. Commitment Fee. In
consideration of the Commitment, the Company agrees to pay to CoBank a
commitment fee on the average daily unused portion of the Commitment at the rate
of 0.25% per annum
(calculated on a 360-day basis), payable monthly in arrears by the 20th day
following each month. Such fee shall be payable for each month (or portion
thereof) occurring during the original or any extended term of the Commitment.
For purposes of calculating the commitment fee only, the “Commitment” shall mean
the dollar amount specified in Section 1 hereof, irrespective of the Borrowing
Base.
IN
WITNESS WHEREOF, the parties have caused this Supplement to be executed by their
duly authorized officers as of the date shown above.
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CoBANK,
ACB
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SOUTH
DAKOTA SOYBEAN PROCESSORS, LLC
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By:
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/s/ Xxxxx Xxxxxx
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By:
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/s/ Xxxxxx Xxxxxxxxxxxx
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Title:
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Assistant Corporate
Secretary
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Title:
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CEO
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SEASONAL
BORROWING BASE REPORT
CoBank,
ACB
EXHIBIT
A
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Name
of Borrower
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City,
State:
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Date
of Period
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South
Dakota Soybean
Processors,
LLC (18462590)
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Volga,
South Dakota
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PART
A—ELIGIBLE RECEIVABLES
For
purposes hereof, ELIGIBLE RECEIVABLES shall mean rights to payment for goods
sold and delivered or for services rendered which: (a) are not subject to any
dispute, set-off, or counterclaim; (b) are not owing by an account debtor that
is subject to a bankruptcy, reorganization, receivership or like proceeding; (c)
are not subject to a lien in favor of any third party other than liens
authorized by CoBank in writing which are subordinate to CoBank’s lien; (d) are
not owing by an account debtor that is owned or controlled by the borrower; (e)
are not accounts due more than 30 days from invoice date; (f) are not accounts
with balances past due more than 30 days; (g) are not deemed ineligible by
CoBank. For purposes thereof, CONTRACT RECEIVABLES shall mean all
Accrued Gains & Losses on Open Purchase and Sale Contracts for grain which
(a) are not in dispute, (b) are legally enforceable, and (c) are not subject to
a lien except in favor of CoBank.
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ADVANCE
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ALLOWABLE
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||||||||||||||||||
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ELIGIBLE RECEIVABLES
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AMOUNT
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RATE
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ADVANCE
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||||||||||||||||
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Trade
Receivables 0-30 Days
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$ | - |
x
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85 | % |
=
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$ | - | |||||||||||
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Trade
Receivables 31-60 Days
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$ | - |
x
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50 | % |
=
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$ | - | |||||||||||
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Trade
Receivables 61 Days and Over
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$ | - |
x
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0 | % |
=
|
$ | - | |||||||||||
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Other
Receivables
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$ | - |
x
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0 | % |
=
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$ | - | |||||||||||
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Net
Liquidated Value of Brokerage Accounts
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$ | - |
x
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90 | % |
=
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$ | - | |||||||||||
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Net
Contract Receivables for Old Crop Beans*
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$ | - |
x
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80 | % |
=
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$ | - | |||||||||||
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Net
Contract Receivables for New Crop Beans*
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$ | - |
x
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70 | % |
=
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$ | - | |||||||||||
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Subtotal-Net
Contract Receivables for Beans
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$ | - | $ | - | |||||||||||||||
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*Old
Crop ends September 30. Net Contract
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|||||||||||||||||||
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Receivables
are Accrued Gains & Loss on
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|||||||||||||||||||
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Open
Purchase & Sale Contracts
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|||||||||||||||||||
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TOTAL
PART A
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$ | - | $ | - | |||||||||||||||
PART
B-ELIGIBLE INVENTORY
For
purposes hereof, ELIGIBLE INVENTROY shall mean inventory which (a) is of a type
shown below; (b) is owned by the borrower and not held by the borrower on
consignment or similar basis; (c) is not subject to a lien except in favor of
CoBank
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ADVANCE
|
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ALLOWABLE
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||||||||||||||||||
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Types
of Eligible Inventory
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AMOUNT
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Deduction
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RATE
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ADVANCE
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|||||||||||||||
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Soybeans*
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$ | - | x | 85 | % |
=
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$ | - | ||||||||||||
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Less:
Grain Payables
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$ | - | x | 85 | % |
=
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$ | - | ||||||||||||
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Soybean
Meal**
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$ | - | x | 85 | % |
=
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$ | - | ||||||||||||
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Soybean
Oil**
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$ | - | x | 85 | % |
=
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$ | - | ||||||||||||
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Soybean
Hulls**
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$ | - | x | 75 | % |
=
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$ | - | ||||||||||||
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Other
Inventory
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$ | - | x | 0 | % |
=
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$ | - | ||||||||||||
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TOTAL
PART B
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$ | - | $ | - | ||||||||||||||||
*Valued
at Bid Price FOB Volga, SD
**Valued
at market FOB Volga, SD
PART C –
OBLIGATIONS
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Less:
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OBLIGATIONS
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|||
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Book
Overdraft (Bank overdraft net of cash available.)
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$ | - | ||
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Demand
Patron Notes/Deposits
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$ | - | ||
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Accts
Payable Owed to Suppliers with PMSI Filings
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$ | - | ||
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Outstanding
Balance of CoBank Loan(s), (as of date of this report):
(#RIB051S01)
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$ | - | ||
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CoBank
Letters of Credit issued (excluding North Western Services Corporation
Letter of Credit)
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$ | - | ||
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TOTAL
PART C (NET OBLIGATIONS SUMMARY)
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$ | - | ||
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*EXCESS/OVERADVANCE (AS
OF END OF PERIOD): Total A + B -
C
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