exv10w34



 





Exhibit 10.34




SECURITY AGREEMENT

& DEPOSIT ACCOUNT CONTROL AGREEMENT




     THIS AGREEMENT, made effective this 16th day of August, 2006, by and among First
National Bank of Omaha (hereinafter called “SECURED PARTY”), Red Trail Energy, LLC, a North
Dakota limited liability company (hereinafter called “DEBTOR”), and Bremer Bank (“DEPOSITARY
BANK”), a bank organized under the laws of North Dakota, whose mailing address is PO Box 352,
Richardton, ND 58652.



WITNESSETH:




     1. DEBTOR warrants that DEBTOR’s only place of business is the address appearing following
DEBTOR’s signatures. DEBTOR will promptly notify SECURED PARTY, in writing, of any change in the
location of any place of business,; or the establishment of any new place of business.



     2. For valuable consideration, receipt of which is hereby acknowledged, DEBTOR hereby grants
to the SECURED PARTY a security interest in the following property (hereinafter called the
“COLLATERAL”).




     A. A certain deposit account numbered 8620810 in the name of DEBTOR, established at
DEPOSITARY BANK on behalf of DEBTOR. DEBTOR agrees to maintain a minimum amount in the
account but said account balance shall not exceed Five Hundred Thousand Dollars
($500,000.00) at any time. If said account balance exceeds Five Hundred Thousand Dollars
($500,000.00), DEBTOR shall transfer the excess funds to an account established at the
banking offices of SECURED PARTY.




     B.
Each and every deposit account now or hereinafter identified to or
becoming a part
of the account hereinabove set out, and all monies or funds now or hereinafter identified
to or becoming a part of said account above set out.



     3. The COLLATERAL secures several Promissory Notes dated December 16,2006, in the aggregate
amount of Fifty Eight Million Seven Hundred Eleven Thousand Seven Hundred Forty Dollars
($59,711,740.00), plus interest accruing thereon; and all prior, contemporaneous and future debts
owed to the SECURED PARTY by the DEBTOR, whether Originally owned of transferred to the SECURED
PARTY.



     4. DEBTOR does hereby grant to the SECURED PARTY such control of the above set out account
and money which is a “deposit account” within the meaning of the Nebraska Uniform Commercial Code
§9-l02(a)(29) and similar statutes which may govern any aspect
of this transaction.



 









 





     5. DEBTOR may acquire assets to be identified to or become a part of the above set out
account. None of the COLLATERAL may be pledged or otherwise hypothecated without the prior written
consent of SECURED PARTY.



     6. The DEBTOR warrants that there are no adverse claims to the COLLATERAL.



     7. Hereinafter, DEPOSITARY BANK shall hold the account and any monies on behalf of the SECURED
PARTY, and such retention of possession thereof by DEPOSITARY BANK shall constitute possession of
the account by the SECURED PARTY.



     8. It is agreed and understood that DEPOSITARY BANK does not represent that any valid
security interest exists in the account and the assets in the account and DEPOSITARY BANK shall
have no ongoing responsibility for ensuring that a valid security interest exists in favor of the
SECURED PARTY.



     9. DEPOSITARY BANK shall send to SECURED PARTY at the following address monthly statements of
the above account: First National Bank of Omaha, 1620 Dodge St. STOP 1050, Omaha, NE 68197-1050,
Attention: Christopher Reiner.



     10. REMEDIES. If total or partial default is made in the payment at maturity of any sum
(principal or interest), at any time secured hereby, or if default is made in the performance of
any obligation imposed upon the DEBTOR hereunder, or by any document, instrument or thing executed
by the DEBTOR in connection with any debt or obligation secured hereby, or hereafter secured
hereby; or if any of the representations or warranties of the DEBTOR made in connection with this
transaction shall prove raise; or if any proceeding is instituted by or against the DEBTOR under
provisions of the Bankruptcy Code, or any other insolvency law; or if the SECURED PARTY shall
reasonably at any time deem its rights hereunder insecure, then, in any of such events, the holder
Of this security interest may, at its option, declare the entire indebtedness secured hereby
(with all interest secured hereunder) to be immediately due and payable. In such event,
DEPOSITARY BANK, upon written notice from the SECURED PARTY of the default and of the
amount of debt in  default, shall immediately proceed to relinquish all monies in or identified to the account and pay the
amount of the debt to the SECURED PARTY. In such an event, the SECURED PARTY may also enforce all
remedies available to it afforded under the Uniform Commercial Code, or otherwise authorized by
law, or at equity, or given in this instrument, or any other document, instrument or thing
executed by the DEBTOR in connection with any debt or obligation secured, hereby or hereinafter
secured hereby. Such remedies may be pursued contemporaneously, or otherwise.



     11. All rights of the SECURED PARTY will inure to the benefit of its successors and
assigns.



     SIGNED IN TRIPLICATE and delivered on the date first above written, the DEBTOR hereby
acknowledging receipt of a copy of this Agreement.



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	SECURED PARTY: First National Bank of Omaha	 	 
	 
	 	 	 	 
	By: 

Its

	 	/s/ Chris Reiner
 

Commercial Loan Officer
	 	 
	 
	 	 	 	 
	DEBTOR: Red Trail Energy, LLC	 	 
	 
	 	 	 	 
	By: 

Its

	 	/s/ Mick J. Miller
 

CEO
	 	 
	 
	 	 	 	 
	And
	 	 	 	 
	 
	 	 	 	 
	By: 

Its

	 	/s/ Bonnie Eckelberg
 

CFO
	 	 
	 
	 	 	 	 





	 	 	 
	DEBTOR’s Address:

	 	Red Trail Energy, LLC
	 

	 	P.O. Box 11
	 

	 	Richardton, North Dakota 58652
	 

	 	Attention: Ambrose Hoff






	 	 	 	 	 
	DEPOSITARY BANK: Bremer Bank	 	 
	 
	 	 	 	 
	By:

	 	/s/ Brian Hagen
 

	 	 
	Its

	 	EVP
	 	 






 ACKNOWLEDGMENT AND AGREEMENT




     THE UNDERSIGNED, Bremer Bank, does hereby acknowledge receipt of an executed copy of the
above and foregoing Security Agreement, and does hereby agree to be bound by the agreement and
does adopt and publish to the SECURED PARTY the warranties provided therein.



     EXECUTED effective the 16th day of August, 2006.



	 	 	 	 	 	 	 
	 

	 	BREMER
	 	BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Its
	 	/s/ Brian Hagen
 

EVP
	 	 
	 
	 	 	 	 	 	 
	ATTEST:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By: /s/ Beth Odegaard
 

       Secretary

	 	 	 	 	 	 







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