Document:

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                                                                   Exhibit 10.16

                            REVOLVING PROMISSORY NOTE

Omaha, Nebraska                                                    $3,500,000.00
Note Date: December 16, 2005                    Maturity Date: December 15, 2006

     On or before December 15, 2006, RED TRAIL ENERGY, LLC ("BORROWER"),
promises to pay to the order of FIRST NATIONAL BANK OF OMAHA ("BANK") at any of
its offices in Omaha, Nebraska the principal sum hereof, which shall be Three
Million Five Hundred Thousand and no/100 ($3,500,000.00) Dollars or so much
thereof as may have been advanced by BANK and shown on the records of the BANK
to be outstanding, under this Note and the loan agreement executed by the BANK
and BORROWER dated as of December 16, 2005, as it may, from time to time, be
amended. Interest on the principal balance from time to time outstanding will be
payable at a rate equal to the LIBOR RATE plus three hundred forty (340) basis
points from time to time until maturity, and six hundred (600) basis points in
excess of said aggregate interest rate from time to time after maturity, whether
by acceleration or otherwise. Interest shall be calculated on the basis of a
360-day year, counting the actual number of days elapsed. Interest on the
REVOLVING LOAN shall be payable quarterly. Provided, however, the LOAN AGREEMENT
contains provisions for reduction of the interest rate under certain
circumstances.

     This note is executed pursuant to a Construction Loan Agreement dated as of
December 16, 2005, between BANK and BORROWER (the "LOAN AGREEMENT"). The LOAN
AGREEMENT contains additional terms of this Note, including, but not limited to
enumerated events of default, and the granting of liens to secure BORROWER's
performance. All capitalized terms not otherwise defined herein shall have the
same meanings as set forth in the LOAN AGREEMENT.

     As provided in the LOAN AGREEMENT, upon any such enumerated default, BANK
may accelerate the due date of this Note and declare all obligations set forth
herein immediately due and payable, and BANK shall also have such other remedies
as are described in the LOAN AGREEMENT and are provided by law. 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.

     Executed as of the Note Date set forth above.

                                        RED TRAIL ENERGY, LLC, a North Dakota
                                        limited liability company

                                        By: /s/ Ambrose R. Hoff
                                            ------------------------------------
                                        Name: Ambrose R. Hoff
                                        Title: President

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                                        And

                                        By: /s/ William N. DuToit
                                            ------------------------------------
                                        Name: William N. DuToit
                                        Title: Treasurer

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                                                                   Exhibit 10.17

                       PROMISSORY NOTE AND CONTINUING LETTER OF CREDIT AGREEMENT

(FIRST NATIONAL BANK LOGO)

TO: First National Bank
    International Trade Services
    1620 Dodge St
    Omaha, NE 68197-1111

In consideration of your issuance of letters of credit from time to time
substantially in accordance with our applications therefore, as the same may be
amended with our agreement or consent, we hereby agree that, except as you and
we shall otherwise specifically agree in writing in each instance, the Terms and
Conditions hereinafter set forth shall apply to each such application and to
each letter of credit issued by you pursuant to such application.

                              TERMS AND CONDITIONS

In these provisions:

1)   "Agreement" means this Promissory Note and Continuing Letter of Credit
     Agreement.

2)   The "Applicant" means each party executing this Agreement.

3)   "Application" means each Application for Letter of Credit by the Applicant
     as such application may be amended or modified from time to time with the
     written or oral agreement or consent of the Applicant.

4)   The "Bank" means The "First National Bank".

5)   "Financing Statement" means a Financing Statement or a Statement of Trust
     Receipt Financing in the form specified in applicable law.

6)   An "instrument" means any draft, receipt, acceptance or cable or written
     demand for payment.

7)   "Note" means the Business Promissory Note contained in Section 20 of the
     Agreement.

8)   "Property" means goods and merchandise and any and all documents relative
     thereto, securities, funds, choses in action, and any and all other forms
     of property, whether real, personal or mixed and any right or interest
     therein.

9)   "Security Agreement" means an agreement which creates or provides for a
     security interest, including, where applicable law provides therefore, a
     trust receipt as defined in and complying with such law.

10)  "Uniform Customs and Practice" means the Uniform Customs and Practice for
     Documentary Credits (1993 Revision), International Chamber of Commerce
     Publication No. 500 and any subsequent revision thereof approved by a
     Congress of the International Chamber of Commerce and adhered to by the
     Bank.

11)  "International Standby Practices - ISP 98' " means the International
     Standby Practices - ISP 98', International Chamber of Commerce Publication
     No.590 and any subsequent revisions thereof approved by a Congress of the
     International Chamber of Commerce and adhered to by the Bank.

In consideration of the issuance by the Bank, upon Application by the Applicant
from time to time, at the Bank's option, of one or more letters of credit (each
such letter of credit as from time to time amended or modified with the consent
of the Application being hereinafter referred to as the "Credit"), the Applicant
hereby agrees with the Bank as follows with respect to each Credit:

1)   The Applicant will reimburse the bank, at its principal office, in cash,
     the amount required to pay each instrument, such reimbursement to be made
     on demand in the case of each sight draft on receipt, with interest from
     the date of payment of the instrument to the date of reimbursement, and not
     later than one business day prior to maturity in the case of each
     acceptance payable at the principal office of the Bank, and in time to
     reach the place of payment in the course of ordinary mail not later than
     one business day prior to maturity in the case of each acceptance that is
     not payable at the principal office of the Bank. If the instrument is in
     foreign currency, such reimbursement shall be in the United States currency
     at the Bank's selling rate for cable transfers to the place of payment of
     the instrument current on the date of reimbursement or of the Bank's
     settlement of its obligation, as the Bank may require. If, for any cause,
     on the date of reimbursement or settlement, as the case may be, there is no
     rate of exchange generally current for Bank for effecting such cable
     transfers, the Applicant will reimburse the Bank or demand an amount in
     United States currency equivalent to the Bank's actual cost of settlement
     of its obligation however or whenever the Bank shall make such settlement,
     with interest from the date of settlement to the date of reimbursement. The
     Applicant will comply with all governmental exchange regulations now or
     hereafter applicable to the Credit or instruments or payments related
     thereto and will pay the Bank, on demand, in United States currency, such
     amount as the Bank may be required to expend on account of such regulations

2)   The Bank may accept or pay any draft presented to it, regardless of when
     drawn and whether or not negotiated, if such draft, the other required
     documents and any transmittal advice are dated on or before the expiration
     date of the Credit, and except in so far as instructions may be given by
     the Applicant in writing expressly to the contrary with regard to, and
     prior to, the Bank's issuance of the Credit: (a) although shipment(s) in
     excess of the quantity called for under the Credit are made, the bank may
     honor the relative instrument(s) in an amount or amounts not exceeding the
     amount of the Credit; and (b) the Bank may honor, as complying with the
     terms of the Credit and of the application therefore, any instruments or
     other documents otherwise in order signed or issued by an administrator,
     executor, trustee in bankruptcy, debtor in possession, assignee for the
     benefit of creditors, liquidator, receiver or other legal representative of
     the party authorized under the Credit to draw or issue such instruments or
     other documents.

3)   In the event of any change or modification, with the consent of the
     Applicant, relative to the Credit or any instruments or documents called
     for thereunder, including waiver of noncompliance of any such instruments
     or documents with the terms of the

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     Credit, these Terms and Provisions shall be binding upon the Applicant with
     regard to the Credit as so changed or modified, and to any action taken by
     the Bank or any of its correspondents relative thereto.

4)   The Uniform Customs and Practice shall be binding on the Applicant and the
     Bank except to the extent it is otherwise expressly agreed. It is, also,
     agreed that: (a) neither the Bank nor its correspondents shall be
     responsible for: the validity or sufficiency of any endorsements; delay in
     giving or failure to give notice of arrival or any other notice; or failure
     of any instrument to bear any reference or adequate reference to the Credit
     or of documents to accompany any instrument at negotiation, or failure of
     any person to note the amount of any instrument on the reverse of the
     Credit or to surrender or take up the Credit or to forward documents in the
     manner required by the Credit; (b) the occurrence of any one or more of the
     contingencies referred to in the Uniform Customs and Practice or in the
     preceding clauses of this paragraph shall not affect, impair, or prevent
     the vesting of any of the Bank's rights or powers hereunder or the
     Applicant's obligation to make reimbursement; (c) the Applicant will
     promptly examine (i) the copy of the Credit (and of any amendments thereof)
     sent to it by the Bank and (ii) all instruments and documents delivered to
     it from time to time, and, in the event of any claim of noncompliance with
     Applicant's instruments or other irregularity, will immediately notify the
     Bank thereof in writing, the Applicant being conclusively deemed to have
     waived any such claim against the Bank and its correspondents, unless such
     notice is given. Any action, inaction or omission on the part of the Bank
     or any of its correspondents, under or in connection with the Credit or the
     relative instruments, documents or property, if in good faith and in
     conformity with such foreign or domestic laws, regulations or customs as
     the Bank or any of its correspondents may deem to be applicable, shall be
     binding upon the Applicant and shall not place the Bank or any of its
     correspondents under any liability to the Applicant. The Applicant agrees
     to hold the Bank and its correspondents indemnified and harmless against
     any and all claims, loss, liability or damage, including reasonable counsel
     fees, arising from or in connection with the Credit, including any such
     claim, loss, liability or damage arising out of any (i) transfer, sale,
     delivery, surrender or endorsement of any bill of lading, warehouse receipt
     or other document at any time(s) held by the Bank, or held for its account
     by any of its correspondents, in connection with the Credit and (ii) any
     proceedings to enjoin payment under the Credit, whether instituted by
     Applicant or another party. The Applicant agrees that such reasonable
     counsel fees incurred by the bank shall include, without limitation,
     counsel fees incurred by the Bank in connection with (i) determining
     whether to honor any draft under the Credit, (ii) interpreting any
     provision hereof or of the Credit, (iii) any dispute by or among the
     Applicant, the beneficiary of the Credit or any other person with respect
     to this Agreement or the Credit and (iv) reviewing the form and content of
     Applications and proposed amendments to this Agreement and the Credit. The
     Bank, at its option, may file a Financing Statement, without the signature
     of the Applicant, with respect to documents, property and interests
     relative to the Credit or which may be held as security hereunder and the
     Applicant will reimburse the Bank for the filing or recording fees

5)   The Applicant will procure promptly any necessary import, export or other
     licenses for the import, export or shipping of the property shipped under
     or pursuant to or in connection with the Credit, and will comply with all
     foreign and domestic governmental regulations in regard to the shipment of
     such property or the financing thereof, and will furnish such certificates
     in that respect as the Bank may at any time(s) require, and will keep such
     property adequately covered by insurance in amounts, against risks and in
     companies satisfactory to the Bank, and will assign the policies or
     certificates of insurance to the Bank, or will make the loss or adjustment,
     if any, payable to the Bank, at its option, and will furnish the Bank, on
     its demand, with evidence of acceptance by the insurers of such assignment.
     Should the insurance upon such property for any reason be unsatisfactory to
     the Bank, the Bank may, at the Applicant's expense, obtain insurance
     satisfactory to the Bank.

6)   As security for the payment of performance of any and all of the
     Applicant's obligations and/or liabilities hereunder, absolute or
     contingent, and also for the payment or performance of any and all other
     obligations and/or liabilities, absolute or contingent, due or to become
     due, which are now, or may at any time(s) hereafter be owing by the
     Applicant to the Bank, or which are now or hereafter existing, the
     Applicant hereby: (a) recognizes and admits the Bank's ownership in and
     unqualified right to the possession and disposal of any and all shipping
     documents, warehouse receipts, policies or certificates of insurance and
     other documents accompanying or relative to instruments drawn under the
     Credit and in and to any and all property shipped under or pursuant to or
     in connection with the Credit, or in any way relative thereto or to any of
     the instruments drawn thereunder (whether or not such documents, goods or
     other property be released to or upon the order of the Applicant under a
     security agreement or bailee receipt), and in and to the proceeds of each
     and all of the foregoing; (b) pledges to the Bank and/or gives the bank a
     general security interest in and/or right of set-off against, all right,
     title and interest of the Applicant in and to the balance of every deposit
     account, now or at any time hereafter existing, of the Applicant with the
     Bank, and any other claims of the Applicant against the Bank, and in and to
     all property, claims and demands and rights and interests therein of the
     Applicant, and in and to all evidences thereof, which have been or at any
     time shall be delivered to or otherwise come into the Bank's possession,
     custody or control, or into the possession, custody or control of any of
     its agents or correspondents for account of the Bank for any purpose,
     whether or not for the express purpose of being used by the Bank as
     collateral security or for safekeeping or for any other or different
     purpose, the Bank being deemed to have possession, custody or control of
     all such property actually in transit to or set apart for the Bank or any
     of its agents, correspondents or others acting in its behalf, it being
     understood that the receipt at any time by the Bank, or any of its
     correspondents, of other security, of whatever nature, including cash,
     shall not be deemed a waiver of any of the Bank's rights or powers
     hereunder; (c) if any party shall have joined in the Application for the
     Credit, assigns and transfers to the Bank all right, title and interest of
     the Applicant in and to all property and interests which the Applicant may
     now or hereafter obtain from such party as security for the obligations of
     such party arising in connection with the transaction to which the Credit
     relates; (d) agrees at any time and from time to time, on demand, to
     deliver, convey, transfer or assign to the Bank additional security of a
     value and character satisfactory to the Bank, or to make such payment as
     the Bank may require; and (e) acknowledges that any collateral pledged to
     Bank by any other security agreement in existence also constitutes
     collateral for the obligation set forth in this agreement.

7)   If the bank shall in good faith deem itself insecure at any time, or upon
     the death of the Applicant, or if any of the obligation and/or liabilities
     of the Applicant to the Bank shall not be paid or performed when due or
     when demanded, or if the Applicant shall become insolvent (however such
     insolvency may be evidenced or defined) or commit any act of bankruptcy or
     insolvency, or make a general assignment for the benefit of creditors, or
     if the Applicant shall suspend the transaction of its usual business or be
     expelled or suspended form any exchange, or if an application is made by
     any judgement creditor of the Applicant for an order directing the Bank to
     pay over money or to deliver other property, or if a petition in bankruptcy
     shall be filed by or against the Applicant, or if a petition shall be filed
     by or against the Applicant or any proceeding shall be instituted by or
     against the Applicant for any relief under any bankruptcy or insolvency
     laws or any law relating to the relief of debtors, readjustment of

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     indebtedness, reorganization, composition or extensions, or if any
     governmental authority, or any court at the instance of any governmental
     authority, shall take possession of any substantial part of the property of
     the Applicant or shall assume control over the affairs or operations of the
     Applicant, or if a receiver shall be appointed of, or writ or order of
     attachment or garnishment shall be issued or made against, any of the
     property or assets of the Applicant, thereupon, unless the Bank shall
     otherwise elect, any and all obligations and liabilities of the Applicant
     to the Bank, whether now existing or hereafter incurred, shall become and
     be due and payable forthwith without notice or demand and Bank shall have
     all the rights of a secured party provided by applicable laws.

8)   The Bank's rights and liens hereunder shall continue unimpaired, and the
     Applicant shall be and remain obligated in accordance with the terms and
     provisions hereof, notwithstanding the release and/or substitution of any
     property which may be held as security hereunder at any time(s), or of any
     rights or interest therein. No delay, extension of time, renewal,
     compromise or other indulgence which may occur or be granted by the bank,
     shall impair the Bank's right or powers hereunder. The Bank shall not be
     deemed to have waived any of its rights hereunder, unless the Bank or its
     authorized agent shall have signed such waiver in writing. No such waiver,
     unless expressly as stated therein, shall be effective as to any
     transaction which occurs subsequent to the date of such waiver, nor as to
     any continuance of a breach after such waiver.

9)   If the Applicant is a banking institution, the Applicant hereby appoints
     the Bank its agent to issue the Credit in accordance with, and subject to,
     these Terms and Conditions and the application for the Credit.

10)  If the Applicant is a partnership, the obligations hereof shall continue in
     force, and apply, notwithstanding any change in the membership of such
     partnership, whether arising from the death or retirement of one or more
     partners or the accession of one or more new partners.

11)  The obligations hereof shall bind the heirs, executors, administrators,
     successors and assigns of the Applicant, and all rights, benefits, and
     privileges hereby conferred on the Bank shall be and hereby are extended to
     and conferred upon and may be enforced by its successors and assigns. This
     Agreement and all rights, obligations and liabilities arising hereunder
     shall be governed by, and construed in accordance with, the laws of the
     State of Nebraska.

12)  The Applicant, if more than one, shall be jointly and severally liable
     hereunder (including, without limitation, under provisions of the Note) and
     all provisions hereof regarding the liabilities or security of the
     Applicant shall apply to any liability or any security of any or all of
     them. Each Applicant shall be deemed to be the agent of all others, and,
     except as expressly provided otherwise herein, the Bank may act at the
     direction or request of any one or more of the Applicants and you may give
     a notice or notices (whether or not required to be given), to any one or
     more of the Applicants, all as the Bank may from time to time elect,
     without notice to or approval by the others. The Bank may terminate this
     Agreement with respect to, or release or discharge of, any one or more of
     the Applicants without affecting or impairing the obligations of the other
     Applicants. The death, incompetence or dissolution of any Applicant or any
     change in the composition of any partnership or any other firm which may be
     a party hereto shall not affect in any way the Credit or any rights with
     respect to indebtedness incurred under this Agreement or with respect to
     transactions theretofore initiated. In this Agreement, the term "Applicant"
     refers to any one or more Applicants, including without limitation,
     correspondent banks that have executed this Agreement, and each Applicant
     shall be deemed a customer of the Bank, without regard to whether any
     Applicant or any one of them is specified as the account party on any
     Credit.

13)  This Agreement shall constitute a continuing agreement, applying to all
     future as well as existing transactions, whether or not of the character
     contemplated at the date of this Agreement, and if all transactions between
     the Bank and Applicant shall be at any time closed, shall be equally
     applicable to any new transactions thereafter. Any provision of the
     Agreement which is prohibited or unenforceable in any jurisdiction shall,
     as to such jurisdiction, be ineffective to the extent of such prohibition
     or unenforceable without invalidating the remaining provisions hereof or
     affecting the validity or enforceability of such provision in any other
     jurisdiction.

14)  The Applicant shall compensate the Bank for issuance of each Credit
     hereunder and the Bank's services in relation thereto in accordance with
     the Bank's written fee schedule, together with the amount of any and all
     charges and expenses paid or incurred by Bank or its agents or
     correspondents in connection with each Credit. Such fee schedule may be
     amended by the bank form time to time upon 30 days' notice. The Bank's
     compensation shall be due and payable on demand and interest shall accrue
     on unpaid compensation. Wherever in this Agreement interest shall be
     required to be paid to the Bank, such interest shall accrue at the lesser
     of: (a) the rate of three percent (3%) per annum in excess of the rate in
     effect from time to time designated as the First National Banks National
     Base Rate; or (b) the highest rate allowed by applicable law.

15)  At its option, the Bank may electronically record all telephonic
     instructions received by the Bank from the Applicant or any representative
     thereof, and retain those recordings for 90 days following the date of
     instruction to transfer. The purpose of this procedure is to allow the Bank
     to recover verbal instructions should any questions arise.

16)  This Agreement shall supersede any prior continuing letter of credit
     agreement entered into between the Bank and the identical Applicant or
     Applicants hereto and shall apply to each Credit heretofore or hereafter
     issued by the Bank for the account of the same.

17)  Time is of the essence of this Agreement.

18)  This Agreement is executed and is subject to the laws of the State of
     Nebraska.

19)  This Agreement constitutes the entire understanding of the parties or this
     subject matter and may be amended only by a subsequent written instrument
     executed by all of the parties hereto.

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20)  BUSINESS PROMISSORY NOTE. The Applicant, as maker, promises to pay to the
     order of FIRST NATIONAL BANK ("Bank") at any of its offices in Omaha,
     Nebraska, on demand, the principal sum hereof, which shall be the total sum
     advanced by the Bank under the Agreement, including without limitation any
     amounts due under Section 2 of the Agreement.

     Interest shall accrue on the principal amount from and including the date
     of each advance under the Agreement to the date of payment. Interest, which
     shall be computed on the basis of actual days elapsed and a year of 360
     days, shall be payable on demand. Interest on the principal sum hereof
     shall accrue at the lesser of: (a) the rate of three percent (3%) per annum
     in excess of the rate in effect from time to time designated as the First
     National Banks National Base Rate; or (b) the highest rate allowed by
     applicable law.

     Upon demand for payment hereunder and failure of Applicant to make full
     payment in accordance with such demand, the Bank shall have all rights and
     remedies provided by the Uniform Commercial Code, and any other applicable
     law. Unless the content otherwise requires, all terms used in the Note
     which are defined in the Uniform Commercial Code shall have the meanings
     therein stated. The Note and any amounts advanced under the Agreement
     evidence a loan for business or agricultural purposes, no part of which
     shall be used for personal, family or household purposes.

     All costs and expenses incurred by the Bank in enforcing its rights under
     the Note and the Agreement are immediately due and payable and Applicant
     agrees to pay the same, including reasonable attorneys' fees and legal
     expenses incurred in connection with collection thereof. Interest shall
     accrue on such costs and expenses from the date of incurrence at the rate
     provided for herein. Applicant and each maker, endorser, surety and
     guarantor hereby waives presentment, protest, demand, notice of dishonor,
     and the defense of any statute of limitations.

     Without affecting the liability of any maker, endorser, surety or
     guarantor, the holder may, without notice, renew any number of times or
     extend the time for payment, accept partial payments, release or impair any
     collateral security for the payment of the Note or agree to sue any party
     liable on it. The Applicant, if more than one, shall be jointly and
     severally liable hereunder as co-makers of this Note.

     The Bank shall not be deemed to have waived any of its rights upon or under
     the Note or under the other provisions of the Agreement or under any
     endorsement, surety agreement or guaranty, unless such waivers be in
     writing and signed by the Bank. No delay or omission on the part of the
     Bank in exercising any right shall operate as a waiver of such right or any
     other right. A waiver on any one occasion shall not be construed as a bar
     to or waiver of any right on any future occasion. All rights and remedies
     of the Bank on liabilities or any collateral whether evidenced hereby or by
     any other instrument or papers shall be cumulative and may be exercised
     singularly or concurrently.

Dated: 12-16-05

Red Trail Energy, LLC
APPLICANT

By: /s/ Ambrose R. Hoff
    ---------------------------------
Title: President

By: /s/ William DuToit
    ---------------------------------
Title: Treasurer

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