UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): June 1, 2011
 
RED TRAIL ENERGY, LLC
(Exact name of registrant as specified in its charter)
 
North Dakota
000-52033
76-0742311
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
P.O. Box 11, 3682 Highway 8 South
Richardton, North Dakota 58652
(Address of principal executive offices)
 
(701) 974-3308
(Registrant's telephone number)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

 
 

Item 1.01. Entry into a Material Definitive Agreement
 
On June 1, 2011, Red Trail Energy, LLC (the “Company”) executed the Ninth Amendment to its Construction Loan Agreement (“Ninth Amendment”) with First National Bank of Omaha. The Ninth Amendment amends certain provisions of the Construction Loan Agreement, including: (i) an extension to the term of the Revolving Promissory Note from June 1, 2011 to April 16, 2012; (ii) an increase in the limit on capital expenditures for the 2011 fiscal year from $500,000 to $1,600,000; (iii) a reduction to the net worth covenant from $44,000,000 to $40,000,000; and (iv) a modification to the definition of the term "working capital" as used in the Construction Loan Agreement.
 
Also on June 1, 2011, the Company signed a First Amended and Restated Revolving Promissory Note to extend the term of its $7,000,000 revolving line of credit with First National Bank of Omaha (the “Line of Credit”) through April 16, 2012. The funds from the Line of Credit will be used for working capital at the Company’s ethanol plant. The Company made standard representations and warranties under the Line of Credit.
 
Item 9.01 Financial Statements and Exhibits.
 
(d)     Exhibits .
 
99.1    Ninth Amendment to Construction Loan Agreement dated June 1, 2011 by and between Red Trail Energy, LLC and First National Bank of Omaha
 
99.2    First Amended and Restated Revolving Promissory Note dated June 1, 2011 by and between Red Trail Energy, LLC and First National Bank of Omaha
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
RED TRAIL ENERGY, LLC
 
 
June 3, 2011
/s/ Kent Anderson
 
Kent Anderson, Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 

 
 

NINTH AMENDMENT OF
CONSTRUCTION LOAN AGREEMENT
THIS NINTH AMENDMENT OF CONSTRUCTION LOAN AGREEMENT ("Amendment") is made this 1 St day of June, 2011 by and between RED TRAIL ENERGY, LLC, a North Dakota limited liability company ("BORROWER") and FIRST NATIONAL BANK OF OMAHA ("BANK"), a national banking association headquartered in Omaha, Nebraska. This Amendment amends that certain Construction Loan Agreement dated December 16, 2005 Between BANK and BORROWER (as amended, the "AGREEMENT").
WHEREAS, pursuant to the AGREEMENT and the other LOAN DOCUMENTS, BANKS extended the loans and other financial accommodations and extensions of credit described in the AGREEMENT to BORROWER, all as more fully described in the AGREEMENT;
WHEREAS, the AGREEMENT has been amended pursuant to written amendments to the AGREEMENT between BORROWER and BANK;
WHEREAS, BORROWER has requested, and under the terms of this Amendment BANK has agreed, to extend the LOAN TERMINATION DATE of the REVOLVING LOAN from June 1, 2011 to April 16, 2012, to modify the capital expenditures, NET WORTH and WORKING CAPITAL covenants of the AGREEMENT and to otherwise amend the AGREEMENT as provided for in this Amendment; and
WHEREAS, the parties hereto agree to amend the AGREEMENT as provided for in this Amendment.
NOW, THEREFORE, in consideration of the amendments of the AGREEMENT set forth below, the mutual covenants herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree to amend the AGREEMENT as follows:
1.    Capitalized terms used herein shall have the meaning given to such terms in the AGREEMENT as amended in this Amendment, unless specifically defined herein.
 
2.    The definition of the term "LOAN TERMINATION DATE" in Section 1.24 of the AGREEMENT is hereby amended by deleting the reference to June 1, 2011 as the LOAN TERMINATION DATE applicable to the REVOLVING LOAN and inserting in lieu thereof April 16, 2012. Anywhere else in the AGREEMENT which refers to June 1, 2011 as the LOAN TERMINATION DATE of the REVOLVING LOAN is hereby amended consistent with the foregoing. To further evidence the extension of the LOAN TERMINATION DATE of the REVOLVING LOAN, BORROWER shall execute and deliver to BANK a FIRST AMENDED AND RESTATED REVOLVING PROMISSORY NOTE and all references to the REVOLVING NOTE in the AGREEMENT and the other LOAN DOCUMENTS are hereby amended to refer to such FIRST AMENDED AND RESTATED REVOLVING PROMISSORY NOTE.
 
3.    Effective for BORROWERS 2011 fiscal year only, Section 6.4.11 is hereby amended by deleting the reference to $500,000.00 as the maximum amount of BORROWER'S capital expenditures in BORROWER'S 2011 fiscal year and inserting in lieu thereof $1,600,000.00. Such increase will be used by BORROWER for the sole purposes contained in the CAP EX BUDGET approved by BANK

 
 

referenced below. Commencing with BORROWER'S 2012 fiscal year, and for each fiscal year thereafter, BORROWER'S capital expenditures in any such fiscal year may not exceed $500,000.00 without the prior written consent of BANK as provided for in Section 6.4.11. BANK approves BORROWER'S 2011 CAPEX BUDGET submitted pursuant to Section 6.1.12 of the AGREEMENT.
 
4.    Effective on the date of this Amendment, the second sentence of Section 6.2.2 of the AGREEMENT is hereby amended by deleting the reference to $44,000,000.00 as the minimum NET WORTH and inserting in lieu thereof $40,000,000.00.
 
5.    The definition of WORKING CAPITAL in Section 1.40 of the AGREEMENT is hereby deleted in its entirety and the following is inserted in lieu thereof:
1.40      "WORKING CAPITAL" means current assets determined in accordance with GAAP without duplication (less investments in or other amounts due from any member, employee or any person or entity related to or affiliated with BORROWER and less prepayments) plus the amount available for borrowing under the LONG TERM REVOLVING NOTE at the time of determination, less current liabilities. Current liabilities is calculated as, without duplication, current liabilities determined in accordance with GAAP less the outstanding balance of the TERM LOANS at the time of determination, less the interest rate value of SWAP CONTRACTS, less SUBORDINATED DEBT and any balloon payments due on the TERM LOANS through fiscal year ending 2012 plus the principal of INDEBTEDNESS due and payable in the then current fiscal year.
6.    For the reporting and measurement period ending April 30, 2011, BORROWER violated the minimum WORKING CAPITAL financial covenant contained in Section 6.2.4 of the AGREEMENT. BANK hereby waives BORROWER's violation of the foregoing financial covenant solely for the period ending April 30, 2011. The foregoing waiver is strictly limited to the events and time periods provided for in this Section 6. Such waiver does not obligate BANK to waive future compliance with respect to the same or different covenants, terms and conditions of the AGREEMENT and the other LOAN DOCUMENTS, unless specifically agreed to by BANK in writing.
7.      Except as modified and amended herein, all other terms, provisions, conditions and obligations imposed under the terms of the AGREEMENT and the other LOAN DOCUMENTS shall remain in full force and effect and are hereby ratified and affirmed by BORROWER. To the extent necessary, the other LOAN DOCUMENTS are hereby amended to be consistent with the terms of this Amendment.
 
8.      BORROWER certifies and reaffirms by its execution hereof that the representations and warranties set forth in the AGREEMENT and the other LOAN DOCUMENTS are true and complete as of this date, and that no EVENT OF DEFAULT under the AGREEMENT or any other LOAN DOCUMENT, and no event which, with the giving of notices or passage of time or both, would become such an EVENT OF DEFAULT, has occurred as of execution hereof. This Amendment may be executed simultaneously in several counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.
 
[SIGNATURE PAGES FOLLOW]
 
 
 
 

 
 

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on the date first written above.
 
 
RED TRAIL ENERGY, LLC
 
 
 
By: /s/ Gerald Bachmeier
 
Title: CEO
 
 
 
By: /s/ Kent Anderson
 
Title: CFO
 
 
 
By: /s/ Jody Hoff
 
Title: Secretary
 
 
 
FIRST NATIONAL BANK OF OMAHA
 
 
 
By: /s/ Fallon Savage
 
Title: Vice President
 

 
 

FIRST AMENDED AND RESTATED REVOLVING PROMISSORY NOTE
 
Omaha, Nebraska      $7,000,000.00
Note Date: June 1, 2011
Maturity Date: April 16, 2012
 
On or before April 16, 2012, RED TRAIL ENERGY, LLC ("BORROWER"), promises to pay to the order of FIRST NATIONAL BANK OF OMAHA ("BANK") at its headquarters in Omaha, Nebraska, the principal sum hereof, which shall be Seven Million and no/100 Dollars ($7,000,000.00) or so much thereof as may have been advanced by BANK and shown on the records of the BANK to be outstanding under this FIRST AMENDED AND RESTATED REVOLVING PROMISSORY NOTE ("REVOLVING NOTE"). Interest on the principal balance from time to time outstanding will be payable at the interest rates provided for in the AGREEMENT, including but not limited to the post-maturity or default rate provided for in the AGREEMENT. Interest will be calculated as provided for in the AGREEMENT. Interest on this REVOLVING NOTE shall be payable monthly, in arrears, as provided for in the AGREEMENT, and on the LOAN TERMINATION DATE applicable to this REVOLVING NOTE.
 
This REVOLVING NOTE is executed pursuant to that certain Construction Loan Agreement dated December 16, 2005 between BANK and BORROWER (the Construction Loan Agreement, together with all amendments, modifications and supplements thereto and all restatements and replacements thereof is called the "AGREEMENT"), as amended from time to time, including by that certain Ninth Amendment of Construction Loan Agreement of even date herewith between BANK and BORROWER. The AGREEMENT, and any amendments or substitutions thereof or thereto, contains additional terms and conditions, including minimum interest rate, default and acceleration provisions, which are incorporated into this REVOLVING NOTE by reference. All capitalized terms not otherwise defined herein shall have the same meanings as set forth in the AGREEMENT. This REVOLVING NOTE amends and restates that certain REVOLVING PROMISSORY NOTE dated November 15, 2010 executed and delivered by BORROWER in favor of BANK, but is not a novation thereof.
 
The aggregate unpaid principal amount hereof plus interest shall become immediately due and payable without demand or further action on the part of the BANK upon the occurrence of an EVENT OF DEFAULT as set forth under the AGREEMENT or any other LOAN DOCUMENT. If the maturity date of this REVOLVING NOTE is accelerated as a consequence of an EVENT OF DEFAULT, then the BANK shall have all the rights and remedies provided for in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity. The rights, powers, privileges, options and remedies of BANK provided in the AGREEMENT, the other LOAN DOCUMENTS or otherwise available at law or in equity shall be cumulative and concurrent, and may be pursued singly, successively or together at the sole discretion of BANK, and may be exercised as often as occasion therefor shall occur. No delay or discontinuance in the exercise of any right, power, privilege, option or remedy shall be deemed a waiver of such right, power, privilege, option or remedy, nor shall the exercise of any right, power, privilege, option or remedy be deemed an election of remedies or a waiver of any other right, power, privilege, option or remedy. Without limiting the generality of the foregoing, the BANK's waiver of an EVENT OF DEFAULT shall not constitute a waiver of acceleration in connection with any future EVENT OF DEFAULT. BANK may rescind any acceleration of this REVOLVING NOTE without in any way waiving or affecting any acceleration of this REVOLVING NOTE in the future as a consequence of an EVENT OF DEFAULT. BANK's acceptance of partial payment or partial performance shall not in any way affect or rescind any acceleration of this REVOLVING NOTE made by BANK.
 

 
 

 
Unless prohibited by law, BORROWER will pay on demand all reasonable costs of collection, reasonable legal expenses and reasonable attorneys' fees and costs incurred or paid by BANK in collecting and/or enforcing this REVOLVING NOTE. Furthermore, BANK reserves the right to offset without notice all funds held by BANK against debts owing to BANK by BORROWER as provided for in the AGREEMENT.
 
All makers and endorsers hereby waive presentment, demand, protest and notice of dishonor, consent to any number of extensions and renewals for any period without notice; and consent to any substitution, exchange or release of collateral, and to the addition or releases of any other party primarily or secondarily liable.
 
[SIGNATURE PAGE FOLLOWS]

 
 

Executed as of the Note Date set forth above.
 
 
RED TRAIL ENERGY, LLC, a North Dakota limited liability company
 
 
 
By: /s/ Gerald Bachmeier
 
Title: CEO
 
 
 
By: Kent Anderson
 
Title: CFO
 
 
 
By: /s/ Jody Hoff
 
Title: Secretary