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:





6.2.1The 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:





6.2.2The 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, 2010and




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:





6.3.16BORROWER 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, LLCBy:
              /s/
      Andrew Wong
              
              By:
              /s/
      Frank KirschenheiterAndrew
      Wong
              
              Name:
              Frank
      KirschenheiterCommercial
      Loan Officer
              
              Title:
              TreasurerAndBy:
              /s/
      Jody HoffName:
              Jody
      HoffTitle:
              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
      HoffNotary
      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
      HoffNotary
      Public
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