Document:

10.3 Second Amendment of First Amended and Restated Mortgage

SECOND AMENDMENT OF FIRST AMENDED AND RESTATED MORTGAGE, 
SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE 
FINANCING STATEMENT
Prepared by and after recording return to:
James M. Pfeffer
The Business Law Offices of
James M. Pfeffer, LLC 16363 Sahler St.
Omaha, Nebraska 68116
This SECOND AMENDMENT OF FIRST AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, ASSI GNMENT OF LEASES AND RENTS AND FIXTURE FINANCING STATEMENT (this "Amendment") is dated as of March 20, 2015, is by and between RED TRAIL ENERGY, LLC ("Mortgagor"), a North Dakota limited liability company whose address is 3682 Highway 8 South, P.O. Box 11, Richardton, North Dakota 58652-0011 and FIRST NATIONAL BANK OF OMAHA, a national banking association ("Mortgagee"), whose address is 1620 Dodge St., Stop 1029, Omaha, Nebraska 68197, Attention: Brad Brummund and amends that certain First Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated April 16, 2012 (as amended, the "Mortgage") to and for the benefit of Mortgagee, encumbering certain property in Stark County, North Dakota legally described on Exhibit A attached hereto and made a part hereof, which Mortgage was recorded with the Stark County Recorder on April 17, 2012 as Document #3096417, as such Mortgage was amended by that certain First Amendment of First Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated October 31, 2012 between Mortgagor and Mortgagee recorded with the Stark County Recorder on November 8, 2012 as Document #3102988.
WITNESSETH:
WHEREAS, Mortgagor and Mortgagee, as a Lender, Administrative Agent and Collateral Agent (as defined in the Loan Agreement referenced below), have entered into a Fifth Amendment of First Amended and Restated Construction Loan Agreement dated of even date herewith (the "Amendment") which amends that certain First Amended and Restated Construction Loan Agreement dated April 16, 2012 (as amended, the "Loan Agreement") and extends the Maturity Date;
WHEREAS, Mortgagor executed the Mortgage to secure the Obligations (as defined in the Mortgage), which included, without limitation, the repayment of Loans under the Loan Agreement; and
WHEREAS, Mortgagor and Mortgagee desire to extend the Maturity Date from April 16, 2017 to March 20, 2020 reflect the extension of such Maturity Date provided for in the Amendment.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Each of the recitals set forth above are incorporated herein as if set forth verbatim.

2.The term "Mortgage", as defined in the Mortgage, shall be deemed to mean the Mortgage as amended by this Amendment, as the same may be hereafter further amended, supplemented, restated or modified from time to time. Capitalized terms not otherwise defined herein shall have the meaning given to such terms in the Loan Agreement.

3.Recital B of the Mortgage is hereby amended to delete the reference to April 16, 2017 as the Maturity Date and inserting in lieu thereof March 20, 2020. All other references in the Mortgage or other Loan Documents which refer to the Maturity Date provided for in the Mortgage are hereby amended consistent with the foregoing.

4.The Mortgage, as amended by this Amendment, shall remain in full force and effect as originally executed and delivered by Mortgagor, except as expressly modified and amended herein. Mortgagor hereby confirms and reaffirms all of its obligations under the Mortgage, as modified and amended by this Amendment.

5.In the event any provision of this Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

6.This Amendment may be executed in any number of counterparts with the same effect as if all of the parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one instrument.

IN WITNESS WHEREOF, Mortgagor has executed and delivered this Amendment as of the date first written above.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
MORTGAGOR:
RED TRAIL ENERGY, LLC, a North Dakota limited liability company
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Amendment as of the date first written above.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

	
		
	 
	RED TRAIL ENERGY, LLC

	 
	 

	 
	By: /s/ Jodi Johnson

	 
	Title: CFO

	 
	 

	 
	By: /s/ Gerald Bachmeier

	 
	Title: CEO

	 
	 

	 
	By: /s/  Ambrose Hoff

	 
	Title: Secretary

	 
	 

	 
	FIRST NATIONAL BANK OF OMAHA

	 
	 

	 
	By: /s/ Brad Brummund

	 
	Title: Vice President10.4 Third Amended and Restated Revolving Credit Note

THIRD AMENDED AND RESTATED REVOLVING CREDIT NOTE
$10,000,000.00                                               March 20, 2015
For value received, the undersigned, RED TRAIL ENERGY, LLC, a North Dakota limited liability company ("Borrower"), promises to pay to the order of First National Bank of Omaha, a national banking association (the "Lender", which term shall include any subsequent holder hereof), in lawful money of the United States of America, at such address as is required by the Agent, the principal sum of Ten Million and No/100 Dollars ($10,000,000.00) or, if different, the principal amount outstanding under Section 2.01(a)(i) of the Credit Agreement referred to below.
This Third Amended and Restated Revolving Credit Note (the "Note") is issued pursuant to, and is subject to the terms and conditions of, the First Amended and Restated Construction Loan Agreement, dated April 16, 2012 among the Borrower, the Agent, the Lender and the other Lenders party thereto (as the same may be amended, renewed, restated, replaced, consolidated or otherwise modified from time to time (the "Credit Agreement"), as amended, including by that certain Fifth Amendment of First Amended and Restated Construction Loan Agreement of even date with this Note. To the extent of any conflict between the terms and conditions of this Note and the terms and conditions of the Credit Agreement, the terms and conditions of the Credit Agreement shall prevail and govern. Capitalized terms used but not defined in this Note have the meanings given to them in the Credit Agreement. This Note amends and restates that certain Second Amended and Restated Revolving Credit Note dated May 15, 2013 executed by Borrower in favor of Lender, but is not a novation thereof.
Interest shall accrue on the outstanding principal balance of this Note as provided in the Credit Agreement. Principal, interest and all other amounts, if any, payable in respect of this Note shall be payable as provided in the Credit Agreement.
The termination of the Credit Agreement or the occurrence of an Event of Default shall entitle the Agent to declare the then outstanding principal balance hereof, all accrued interest thereon, and all other amounts, if any, payable in respect of this Note to be, and the same shall thereupon become, immediately due and payable without notice to or demand on the Borrower, all of which the Borrower waives.
Time is of the essence with respect to this Note. To the fullest extent permitted by applicable law, Borrower, for itself and its successors and assigns, waives presentment, demand, protest, notice of dishonor, and any and all other notices, demands and consents in connection with the delivery, acceptance, performance, default or enforcement of this Note, and consents to any extensions of time, renewals, releases of any parties to or guarantors of this Note, waivers and any other modifications that may be granted or consented to by the Agent from time to time in respect of the time of payment or any other provision of this Note.
This Note shall be governed by the laws of the State of Nebraska, without regard to any choice of law rule thereof giving effect to the laws of any other jurisdiction.

IN WITNESS WHEREOF, the Borrower has executed and delivered this Note as of the date first above written,
RED TRAIL ENERGY, LLC

	
		
	 
	RED TRAIL ENERGY, LLC

	 
	 

	 
	By: /s/ Jodi Johnson

	 
	Title: CFO

	 
	 

	 
	By: /s/ Gerald Bachmeier

	 
	Title: CEO

	 
	 

	 
	By: /s/  Ambrose Hoff

	 
	Title: Secretary10.5 Fifth Amendment of First Amended and Restated Construction Loan Agreement

FIFTH AMENDMENT OF FIRST AMENDED AND RESTATED 
CONSTRUCTION LOAN AGREEMENT
THIS FIFTH AMENDMENT OF FIRST AMENDED AND RESTATED CONSTRUCTION LOAN AGREEMENT ("Amendment") is entered into and effective as of the 20th day of March, 2015 among RED TRAIL ENERGY, LLC, a North Dakota limited liability company ("Borrower"), FIRST NATIONAL BANK OF OMAHA in its capacities as a Agent and a Lender ("Agent"), and amends that certain First Amended and Restated Construction Loan Agreement dated April 16, 2012 among Borrower, the Agent and Lenders (as amended, the "Loan Agreement").
WHEREAS, pursuant to the Loan Agreement, Lenders, subject to the terms, limitations and conditions contained in the Loan Agreement, extended to Borrower the Loans, financial accommodations and credit defined therein;
WHEREAS, pursuant to that certain First Amendment of First Amended and Restated Construction Loan Agreement dated October 31, 2012, the maximum principal amount of the Revolving Credit Loan was increased to $12,000,000.00 during the Bulge Period defined therein, the Fixed Charge Coverage Ratio was modified and the Loan Agreement was otherwise amended as provided for therein;
WHEREAS, pursuant to that certain Second Amendment of First Amended and Restated Construction Loan Agreement dated April 15, 2013, the Termination Date of the Revolving Credit Loan was extended to May 15, 2013;
WHEREAS, pursuant to that certain Third Amendment of First Amended and Restated Construction Loan Agreement dated May 15, 2013, the Termination Date of the Revolving Credit Loan was extended to April 15, 2014, the maximum principal amount of the Revolving Credit Loan was modified to $10,000,000, the Bulge Period was eliminated and the Loan Agreement was otherwise amended as provided for therein;
WHEREAS, pursuant to that certain Fourth Amendment of First Amended and Restated Construction Loan Agreement dated March 7, 2014, the Termination Date of the Revolving Credit Loan was extended to February 28, 2015, the Agent and Lenders consented to the conversion of the Project from coal to natural gas and the Agent and Lenders consented to the Tax Distribution described therein;
WHEREAS, the parties desire to further extend the Termination Date of the Revolving Credit Loan to March 20, 2016, to extend the Maturity Date of the Term Loan and repayment provisions thereof, to modify the interest rate applicable to the Term Loan, to modify the capital expenditure covenant, to modify the distributions covenant, to delete the Fixed Charge Coverage Ratio and insert in lieu thereof a Debt Service Coverage Ratio, to reflect that the Declining Revolving Credit Loan has been fully repaid and to terminate Borrower's ability to obtain and Lenders' commitment to make further or additional Declining Revolving Credit Loans and to otherwise amend the Loan Agreement as provided for in this Amendment; and
WHEREAS, the parties desire to amend the Loan Agreement as set forth in this Amendment.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Agent, Lenders and Borrower hereby mutually agree to amend the Loan Agreement as follows:

1.Capitalized terms used in this Amendment which are defined in the Loan Agreement shall have the meanings given to them in the Loan Agreement, as such definitions may be amended and supplemented by this Amendment. The provisions of this Amendment shall become effective on the date of this Amendment.

2.The definition of the term "Teiiiiination Date" in Section 1.01 of the Loan Agreement is hereby amended by deleting the reference to February 28, 2015 as the Termination Date of the Revolving Credit Loans and inserting in lieu thereof March 20, 2016.

3.The definition of the term "Maturity Date" in Section 1.01 of the Loan Agreement is hereby amended by deleting the reference to April 16, 2017 as the Maturity Date of the Tenn Loan and inserting in lieu thereof March 20, 2020.

4.Section 2.04(c) of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

(c)    Tenn Loan. Principal and accrued and unpaid interest under the Term Loan will
be payable in equal quarterly installments of $345,242.91, commencing on June 1, 2015, and continuing on the first day of each calendar quarter thereafter until the Maturity Date when the outstanding principal balance, together with accrued and unpaid interest, will be due and payable in full.

5.Section 2.05(a) of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:
(a)    Interest shall accrue on the outstanding principal balance at the end of the day of
each Revolving Credit Loan at the Applicable Rate in effect for such Revolving Credit Loan on such day. Interest shall accrue on the outstanding principal balance of the Teim Loan at a fixed per annum rate equal to 4.96%.

6.The definition of the term "Applicable Margin" in Section 1.01 of the Loan Agreement is hereby amended to delete subsection (c) and re-name subsection (d) subsection (c).

7.The definition of the term "LIBOR Rate" in Section 1.01 of the Loan Agreement is hereby amended by deleting all references to the Term Loan, Declining Revolving Credit Loan and the Three Month LIBOR Rate.

8.Agent and Borrower acknowledge that the Declining Revolving Credit Loan has been fully repaid and that there are no Declining Revolving Credit Loans outstanding on the date of this Amendment. Borrower and Agent agree to terminate the Declining Revolving Credit Loan and each Declining Revolving Credit Loan Commitment, in each case effective as of the date of this Amendment. After the date of this Amendment, Borrower may not request, and Lenders will not be obligated to make, any additional Declining Revolving Credit Loans.

9.Section 4.08 of the Loan Agreement entitled Fixed Charge Coverage Ratio is hereby deleted in its entirety and the following is inserted in lieu thereof:
2
Section 4.08. Debt Service Coverage Ratio. The Borrower must maintain a Debt Service Coverage Ratio of not less than 1.15: 1.0, measured and tested by the Agent quarterly on a fiscal quarter basis.

10.Section 1.01 of the Loan Agreement is hereby amended by inserting the following new definition after the defined term "Debt":
"Debt Service Coverage Ratio" means, for any period, the ratio of (a) EBITDA for such period to (b) principal and interest due and scheduled to be paid on Debt for Borrowed Money, including but not limited to the Loans, during such period.

11.Section 4.09 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:
Section 4.09. Capital Expenditures. The Borrower shall not, make any expenditures for fixed or capital assets if, after giving effect thereto, the aggregate of all such expenditures by the Borrower exceeds $1,500,000 in any fiscal year of Borrower.

12.The Compliance Certificate attached as Exhibit D to the Loan Agreement is hereby deleted in its entirety and the Compliance Certificate attached to this Amendment is hereby inserted in lieu thereof and from and after the date of this Amendment, Borrower will submit such form of Compliance Certificate attached to this Amendment to Agent.

13.Section 4.13 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:
Section 4.13. Redemptions; Distributions. Borrower shall not redeem, purchase or acquire units or shares of its outstanding membership interests without the prior written consent of the Agent; provided, however, that so long as no Event of Default has occurred and is continuing or would occur after giving effect to the payment of the redemption or purchase, Borrower has delivered to the Agent Borrower's annual audited financial statements and compliance certificates as required in this Agreement and Borrower is in compliance with all of the financial and other covenants provided for in this Agreement and will remain so after giving effect to the payment of such redemption or purchase, Borrower may redeem or purchase outstanding membership interests, or units or shares thereof, in an aggregate amount not to exceed $100,000.00 in any fiscal year. Further, Borrower may not declare or pay any dividends or distributions; or make any 

distribution of assets to its members, whether in cash, assets or obligations of the Borrower; or allocate or otherwise set apart any funds or assets for the payment of any dividend or distribution without the prior written consent of the Agent except as provided for in this Section as follows (the "Permitted Distributions"):

		
	(a)
	Subject to the satisfaction of the requirements contained in subsection (b) below, in each fiscal year the Borrower may make cash distributions of Net Income for the immediately preceding fiscal year to its members in an amount not to exceed fifty percent (50%) of Net Income for the immediately preceding fiscal year; and

		
	(b)
	The foregoing Permitted Distributions may only be made if (i) no Event of Default has occurred and is continuing or would occur after giving effect to the payment of the applicable Permitted Distribution, (ii) Borrower has delivered to the Agent Borrower's annual audited fmancial statements and compliance certificates as required in this Agreement, and (iii) Borrower is in compliance with all of the fmancial and other covenants provided for in this Agreement and will remain so after giving effect to the payment of the applicable Permitted Distribution. The Borrower may pay such Permitted Distribution at any time during the applicable fiscal year of the Borrower and may pay such Permitted Distribution in installments during such fiscal year. Notwithstanding anything contained in this Agreement to the contrary, in no event shall any Permitted Distributions be made prior to Borrower's full payment and satisfaction of all of Borrower's Obligations which have accrued to the date of payment of such Permitted Distributions.

14.    Pursuant to Section 7.04 of the Loan Agreement, First National Bank of Omaha has
exercised its right to purchase the interest of each Lender (other than First National Bank of Omaha) in their respective Notes, Revolving Credit Commitments and Tenn Loan Commitments. Such other Lenders are no longer Lenders under the Loan Agreement, Notes and other Loan Documents. To further evidence such purchase, Exhibit A to the Loan Agreement is hereby deleted in its entirety and the Exhibit A attached to this Amendment is attached to the Loan Agreement in lieu thereof. In addition, Borrower will execute in favor of and deliver to First National Bank of Omaha amended Notes in the amount of First National Bank of Omaha's Revolving Credit Commitment and Teiiii Loan Commitment after giving effect to such purchase.
15.    This Amendment shall not be effective until Lender has received each of the following
(each in form and substance acceptable to Lender) or the following conditions have been satisfied:

		
	(a)
	This Amendment, duly executed by Borrower and First National Bank of Omaha, as Agent and a Lender;

		
	(b)
	The amended Notes required in this Amendment above executed and delivered by Borrower in favor of First National Bank of Omaha, as Agent and a Lender;

		
	(c)
	A Second Amendment of First Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement executed and delivered by Borrower in favor of First National Bank of Omaha, as Agent and a Lender; and

		
	(d)
	Such other documents and matters as are reasonably required by Agent.

16.    The Attention line in the Notice Address for First National Bank of Omaha in the Loan
Agreement and each other Loan Document with a notice address for First National Bank of Omaha is hereby amended by deleting Fallon Savage and inserting in lieu thereof Brad Brummund. In addition, the reference to Stop 1050 in such notice addresses is hereby deleted and Stop 1029 is inserted in lieu thereof.
17.    Except as modified herein, all other terms, provisions, conditions and obligations
imposed under the teinis of the Loan Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified, affirmed and certified by Borrower. Borrower hereby ratifies and affirms the accuracy and completeness of all representations and warranties contained in the Loan Documents. Borrower represents and warrants to the Agent and Lenders that the representations and warranties set forth in the Loan Agreement, and each of the other Loan Documents, are true and complete on the date hereof as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, such representation or warranty shall be true and correct as of such specific date), and as if each reference in "this Agreement" included references to this Amendment. Borrower represents, warrants and confirms to the Agent and Lenders that no Events of Default is now existing under the Loan Documents and that no event or condition exists which 

would constitute an Event of Default with the giving of notice and/or the passage of time. Nothing contained in this Amendment either before or after giving effect thereto, will cause or trigger an Event of Default under any Loan Document. To the extent necessary, the Loan Documents are hereby amended consistent with the amendments provided for in this Amendment. Borrower will pay on demand all costs and expenses incurred by Agent in connection with the preparation, execution, delivery, filing, and administration of this Amendment (including, without limitation, legal fees incurred in connection with the preparation of this Amendment and advising Agent as to its rights, and the cost of any credit verification reports or field examinations of Borrower's properties or books and records). Borrower's obligations to Agent under this Section shall survive the termination of this Amendment or the Loan Agreement and the repayment of Borrower's Obligations to Agent and Lenders under the Loan Agreement and other Loan Documents.
1 8 .    This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument.
19.    This Amendment will be governed by and construed in accordance with the laws of the
State of Nebraska, exclusive of its choice of laws rules.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written.

RED TRAIL ENERGY, LLC

	
		
	 
	RED TRAIL ENERGY, LLC

	 
	 

	 
	By: /s/ Gerald Bachmeier

	 
	Title: CEO

	 
	 

	 
	By: /s/ Jodi Johnson

	 
	Title: CFO

	 
	 

	 
	By: /s/  Ambrose Hoff

	 
	Title: Secretary

	 
	 

	 
	FIRST NATIONAL BANK OF OMAHA

	 
	 

	 
	By: /s/ Brad Brummund

	 
	Title: Vice President

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