SEVENTH AMENDMENT TO CONSTRUCTION LOAN AGREEMENT

This Seventh Amendment to Construction Loan Agreement is dated as of the 1st day
of March, 2010, and is 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 established at Omaha, Nebraska.

WHEREAS, the BANK and BORROWER executed a written Construction Loan Agreement
dated as of December 16, 2005 (“AGREEMENT”).

Now, Therefore, in consideration of the AGREEMENT, and their mutual promises
made herein, BANK and BORROWER agree as follows:

1.           Terms which are typed herein as all capitalized words and are not
defined herein shall have same meanings as when described in the AGREEMENT.

2.           BORROWER acknowledges it failed to comply with certain covenants
contained in the AGREEMENT including, without limitation, Sections 6.2.1, and
6.2.4 as of September 30, 2009 and Section 6.2.2 as of December 31, 2009,.  BANK
waives BORROWER's compliance with Sections 6.2.1 and 6.2.4 of the AGREEMENT as
of September 30, 2009 and all prior periods and with Section 6.2.2 as of
December 31, 2009.  The parties agree that BANK has NOT waived BORROWER's
compliance with such covenants after such dates.

3.           Effective immediately, Section 1.11  of the AGREEMENT is amended to
read as follows:

1.11           "EBITDA" means Earnings Before Interest, Taxes, Depreciation and
Amortization, all experienced during the applicable reporting period, but to
exclude extraordinary items, such as changes in market value of SWAP CONTRACTS
from the calculation.

4.           Effective immediately, Section 1.14 of the AGREEMENT is amended to
read as follows:

1.14  "FIXED CHARGE COVERAGE RATIO" means the ratio derived when comparing (i)
EBITDA plus any capital amount raised through BORROWER's Corn Procurement
Program or outside equity raise, less capital expenditures, distributions, and
taxes, to (ii) BORROWER's scheduled payments on the principal and interest of
all OBLIGATIONS and SUBORDINATED DEBT made during the applicable reporting
period.

 
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5.           Effective immediately,  Section 1.29 of the AGREEMENT is amended to
read as follows:

1.29           "NET WORTH" means total assets less total liabilities (but
BORROWER's interest rate value of SWAP CONTRACTS need not be deducted) and less
the following types of assets: (1) leasehold improvements; (2) receivables
(other than those created by sale of goods) to a member and other investments in
or amounts due from any member, employee or other person or entity related to or
affiliated with the BORROWER); (3) goodwill, patents, copyrights, mailing lists,
trade names, trademarks, servicing rights, organizational and franchise costs,
bond underwriting costs and other like assets properly classified as intangible,
and (4) treasury stock. NET WORTH shall not include any debt due to BORROWER not
acceptable to BANK in the exercise of its reasonable discretion, but
SUBORDINATED DEBT and liabilities relating to SUBORDINATED DEBT need not be
deducted.

6.           Effective immediately, Section 1.40 of the AGREEMENT is amended to
read as follows:

1.40           "WORKING CAPITAL" means current assets (less investments in or
other amounts due from any member, employee or any person or entity related to
or affiliated with the BORROWER and prepayments), plus the amount available to
BORROWER for drawing under LONG TERM REVOLVING NOTE, less current
liabilities.  Such term shall NOT include any amounts resulting from interest
rate value of SWAP CONTRACTS, nor SUBORDINATED DEBT, nor EXCESS CASH FLOW
amounts.

7.           Effective immediately, Section 2.5 of the AGREEMENT is amended to
read as follows:

2.5           TERM LOAN.  The existing balance on the CONSTRUCTION LOAN,
including any advance made to increase WORKING CAPITAL, as of COMPLETION DATE
will be restated and said balance will be paid by four promissory notes,
hereafter called "FIXED RATE NOTE", "2007 FIXED RATE NOTE", "VARIABLE RATE
NOTE", and "LONG TERM REVOLVING NOTE".  These TERM NOTES evidence "TERM
LOANS".  Payments on such TERM NOTES shall be as follows:

On the sixteenth day of every third month, commencing three months after
COMPLETION DATE, BORROWER shall pay to BANK the scheduled principal payment
shown in Schedule I, attached hereto and by this reference made a part hereof,
plus accrued interest on FIXED RATE NOTE, together with the scheduled principal
payment shown in Schedule II, attached hereto and to the 2007 FIXED RATE NOTE,
by this reference made a part hereof, plus accrued interest on the 2007 FIXED
RATE NOTE.

In addition, on the sixteenth day of every third month, commencing three months
after COMPLETION DATE, BORROWER shall pay $634,729.57 to BANK, which shall be
allocated as follows:
a.   first to accrued interest on LONG TERM REVOLVING NOTE;
b.   next to accrued interest on VARIABLE RATE NOTE;
c.   next to principal on VARIABLE RATE NOTE;

 
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After VARIABLE RATE NOTE has been fully paid, such quarterly payments shall be
allocated first to accrued interest on LONG TERM REVOLVING NOTE, and thence to
principal, reducing available revolving loan capacity up to an amount of
$4,116,339.68, and thence to principal on the 2007 FIXED RATE NOTE.  All unpaid
principal and accrued interest under the TERM LOANS shall be due and payable on
LOAN TERMINATION DATE, if not sooner paid.

8.           Section 2.15 of the AGREEMENT is hereby deleted in its entirety.

9.           Effective immediately, Section 6.2.1 of the AGREEMENT is amended to
read as follows:

6.2.1   The BORROWER shall maintain a FIXED CHARGE COVERAGE RATIO, measured on a
rolling four quarters trailing basis at the end of each full fiscal quarter, of
no less than 1.25:1.0.  The FIXED CHARGE COVERAGE RATIO shall be tested by the
BANK quarterly on a fiscal quarter basis and shall be measured as follows for
the first three calendar quarters after June 30, 2009:
 
first calendar quarter:  on a rolling one quarter basis at the end of the
calendarquarter;
 
second calendar quarter:  on a rolling two quarter basis at the end of each
calendarquarter;

third calendar quarter; on a rolling three quarter basis at the end of each
calendarquarter.

10.           Effective immediately, Section 6.2.2 of the AGREEMENT is amended
to read as follows:

6.2.2   The BORROWER shall maintain NET WORTH of not less than $38,000,000.00 at
all times, commencing as of December 31, 2009.  The required minimum NET WORTH
of BORROWER, which is to be measured continuously, shall be required in the
following amounts during the stated periods:
 
Minimum NET WORTH:
 
Between:
$40,000,000.00
 
January 31, 2010 and March 30, 2010
$41,000,000.00
 
March 31, 2010 and June 29, 2010
$42,000,000.00
 
June 30, 2010 and September 29, 2010
$43,000,000.00
 
September 30, 2010 and December 30, 2010
      and    

 
as of December 31, 2010, BORROWER shall maintain NET WORTH of no less than
$44,000,000.00.  Subsequent to December 31, 2010, the required minimum NET WORTH
shall increase each fiscal year by an amount equal to the greater of (a)
$250,000, or (b) the amount of undistributed earnings accumulated during the
fiscal year just ended, but not including allowable distributions attributable
to the just ended fiscal year's earnings.

 
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11.           Effective immediately, Section 6.2.3 of the AGREEMENT is amended
to read as follows:

6.2.3 The BORROWER shall determine, at each fiscal year end following COMPLETION
DATE, the amount of its EXCESS CASH FLOW for said fiscal year, and at the time
of delivery of the audited financial statements required by 6.1.1 of this
AGREEMENT, pay to BANK fifty percent (50%) of such sum, to be applied to the
outstanding principal amount of VARIABLE RATE NOTE, and after VARIABLE RATE NOTE
is repaid, to LONG TERM REVOLVING NOTE to reduce the principal balance,
correspondingly reducing available revolving loan capacity up to an amount of
$4,116,339.68, thence to principal of the 2007 FIXED RATE NOTE.   Such annual
payment shall not release BORROWER from making any payment of principal or
interest otherwise required by this AGREEMENT. No payment of EXCESS CASH FLOW
shall be the cause of a payment to BANK for interest rate breakage fees or
otherwise result in any prepayment fee.

12.           Effective immediately, Section 6.2.4 of the AGREEMENT is amended
to read as follows:

6.2.4    BORROWER shall maintain a minimum WORKING CAPITAL of $5,000,000.00,
measured monthly.  For the purpose of this covenant, the amount of any available
borrowing under LONG TERM REVOLVING NOTE shall constitute an addition to WORKING
CAPITAL.

13.           BORROWER received $4,116,339.68 of advances under the CONSTRUCTION
NOTE, which sum has been held by BANK until BORROWER reached a settlement with
its GENERAL CONTRACTOR on certain disputes between them.  BORROWER hereby
requests BANK to apply such $4,116,339.68 to the principal balance outstanding
on the LONG TERM REVOLVING NOTE.  BORROWER will continue its negotiations with
its GENERAL CONTRACTOR but agrees not to enter into any binding settlement
agreement with such GENERAL CONTRACTOR without giving BANK the opportunity to
review the terms thereof nor without BANK's express approval of the provisions
of any such settlement agreement, which approval will not be unreasonably
withheld.  Following such approval by BANK, such proceeds applied to the LONG
TERM REVOLVING NOTE will not be available for use by the BORROWER for any
purpose other than settlement obligations with its GENERAL CONTRACTOR unless
written consent is provided by BANK and conditions of Section 4.3 of this
AGREEMENT have been met in their entirety.

 
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14.  Effective immediately, Section 6.3.16 of the AGREEMENT is amended to read
as follows:

6.3.16   BORROWER shall use its commercially reasonable efforts to develop and
implement no later than December 31, 2010, BORROWER's Corn Procurement Program
or alternative Capital Raise under terms and structure acceptable to BANK.

15.           For any INTEREST PERIOD during which the Three Month LIBOR INDEX
RATE is above one (1%) percent per annum, BORROWER agrees to pay the BANK an
amount determined by the difference between the LIBOR INDEX RATE for the
INTEREST PERIOD and one (1%) percent per annum multiplied by the average
outstanding balance for each of the TERM NOTES divided by the amount of the days
for the applicable INTEREST PERIOD, not to exceed one (1%) percent.  BORROWER
agrees to pay such amount to the BANK, to be applied to reduce principal balance
of the TERM NOTES, beginning April 16, 2010 for the subsequent INTEREST PERIOD
and quarterly thereafter.  The BORROWER's obligation to make such payments as
are described in this paragraph are hereinafter called "1% FEES".

16.           BORROWER acknowledges and agrees that BANK, in its sole
discretion, may modify the interest rate terms for the LONG TERM REVOLVING NOTE,
VARIABLE RATE NOTE, SWAP NOTE, and 2007 SWAP NOTE to Three Month LIBOR RATE plus
500 basis points with a six (6%) percent per annum interest rate floor.  Upon
execution of such modification by BANK, BORROWER's obligation to pay 1% FEES is
extinguished.

17.           BORROWER certifies by its execution hereof that the
representations and warranties set forth in Section 5 of the AGREEMENT are true
as of this date, and that no EVENT OF DEFAULT under the AGREEMENT, and no event
which, with the giving of notice or passage of time or both, would become such
an EVENT OF DEFAULT, has occurred as of execution hereof, except as set forth in
paragraph 2, above.

18.           Except as amended hereby the parties ratify and confirm as binding
upon them all of the terms of the AGREEMENT.

19.           This AGREEMENT may be executed in any number of counterparts, and
by either party on separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and same instrument.

 
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IN WITNESS whereof the parties set their hands as of the date first written
above.
 
First National Bank of Omaha
 
Red Trail Energy, LLC
                          By:
/s/ Andrew Wong
  By:
/s/ Frank Kirschenheiter
   
Andrew Wong
  Name:
Frank Kirschenheiter
   
Commercial Loan Officer 
  Title:
Treasurer
                    And                       By: /s/ Jody Hoff         Name:
Jody Hoff         Title: Vice Chairman  

 

STATE OF NORTH DAKOTA )     ) ss. COUNTY OF STARK )  

 
On this _30__ day of _March___________, 2010, before me, the undersigned Notary
Public, personally appeared _Frank Kirschenheiter____________, the
Treasurer_____ of Red Trail Energy, LLC, on behalf of said entity, and each
acknowledged that he executed the foregoing Amendment to Loan Agreement as his
voluntary act and deed and that of Red Trail Energy, LLC.
 

       
 
 
/s/ DeEll Hoff       Notary Public  

 

STATE OF NORTH DAKOTA )     ) ss. COUNTY OF STARK )  

 
On this _30_ day of _March_____________, 2010, before me, the undersigned Notary
Public, personally appeared _Jody Hoff________________________, the Vice
Chairman_____ of Red Trail Energy, LLC, on behalf of said entity, and each
acknowledged that he executed the foregoing Amendment to Loan Agreement as his
voluntary act and deed and that of Red Trail Energy, LLC.
 

       
 
 
/s/ DeEll Hoff       Notary Public  

 
 
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