**Exhibit 10.26**

 

**SECOND AMENDMENT TO LOAN AGREEMENT**

(NORTHERNLIGHTS ETHANOL, LLC)

 

U.S.BANK NATIONAL ASSOCIATION****(“Lender”), and NORTHERNLIGHTS ETHANOL, LLC,

a****SouthDakota limited liability company (“Borrower”), by this Second Amendment to LoanAgreement (this “Amendment”), hereby agree to amend the terms of “Schedule V”which is attached to and incorporated into the Loan Agreement between themdated the 11th day of July, 2001, as amended by a “Amendment to Loan Agreement”dated as of the 22nd day of June, 2004 (collectively referred to herein as the “LoanAgreement”) as follows:

 

**NOW****THEREFORE**, Schedule V of the Loan Agreement isamended as follows:

 

**Amendment Section 1**. That unnumbered paragraph entitled “WorkingCapital” is deleted in its entirety and replaced with the following:

 

‘WorkingCapital” The Borrower will not permit its Working Capital (the excess ofits current assets over its current liabilities) to be less than $4,000,000.00 as****of the effective date of this Amendment, andat any time thereafter. For purposes of this definition “current assets”includes that amount of principal which at the date Working Capital iscalculated is available for advance to Borrower under the $5,000,000.00Revolving Promissory Note amended March 30, 2005 (including any renewal orreplacement of such Note); provided that on such date Borrower would beentitled to have such additional amount advanced under the terms of such Note.

 

**Amendment Section 2**. That unnumbered paragraph entitled “FixedCharge Coverage Ratio” is deleted in its entirety and replaced with thefollowing:

 

“FixedCharge Coverage Ratio.” For any period of determination with respect to theBorrower, the ratio of

 

(a)EBITDA minus (i) any dividends or other distributions, and(ii) the greater of (A) expenditures for fixed and capital assets not financedor (B) $500,000,

 

to

 

(b) all required principal payments with respect to Total Liabilities(including but not limited to all payments with respect to capitalized leaseobligations of the Borrower), plus interest expenses in each case determined for said period inaccordance with GAAP.

 

**Amendment Section ****3**. Those unnumbered paragraphs entitled“Cash Flow Recapture” and “Excess CashFlow” are deleted in their entirety.

 

**Amendment Section ****4**. That unnumbered paragraph entitled “Dividends” is deleted in itsentirety and replaced with the following:

 

----

 

“Dividends.”The Borrower may periodically make distributions to its Members as the Borrowermay determine are appropriate where: (i) Borrower firstprovides Lender a full and accurately completed and signed ComplianceCertificate establishing that after the payment of the proposed distributions,Borrower will remain in compliance with the requirements of this LoanAgreement, including Schedule V hereto and the other Loan Documents; and(ii) such distribution would not be in violation of SDCL 47-34A-406, or anyother applicable law. The Compliance Certificate shall be in the form Lendermay from time-to-time otherwise specify.

 

**Amendment Section 5.**This Amendment iseffective March 30, 2005.****ThisAmendment****shall be interpretedconsistently with the terms of the Loan Agreement; however to the extent****there is a conflict in the provisions ofthe Loan Agreement and this Amendment, the****termsof this Amendment shall control.****Anycapitalized terms not defined herein shall have the definition given such termin the Loan Agreement.

 

**IN WITNESS**WHEREOF, the parties have entered into thisAmendment effective as of the 30th day of March, 2005.

 
| ** ** | **NORTHERN LIGHTS ETHANOL,****LLC**   |
|------------|---------------------------------------|
| ** ** | ** **                            | ** ** |
| ** ** | ** **                            | ** ** |
|       | By:                                   | /s/ | Delton Strasser |   |
| ** ** | ** **                            |   | Delton** **Strasser |   |
| ** ** | ** **                            | Its: President | ** ** |
| ** ** | ** **                            | ** ** |
| ** ** | **U.S. BANK NATIONAL****ASSOCIATION** |
| ** ** | ** **                            | ** ** |
| ** ** | ** **                            | ** ** |
|       | By:                                   | /s/ | Carl Johnson |   |
|       |                                  |   | Carl Johnson |   |
|       |                                  | Its: Assistant Vice  President |   |

 

2

----