Document:

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                                                                    Exhibit 10.1

Form Approved by VP-Law

              THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY
             LEASE OF LAND FOR CONSTRUCTION/REHABILITATION OF TRACK

     THIS LEASE, ("Lease") made as of the 12th day of My, 2003, by and between
THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY, a Delaware corporation
(hereinafter called "Railroad"), and RED TRAIL ENERGY L.L.C., a(n) a Limited
Liability Corporation, formed under the laws of North Dakota, (hereinafter,
whether one party or more, called "Industry").

     NOW THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:

LEASE OF PREMISES

1.   Railroad hereby leases to Industry, subject to all rights, interests and
     estates of third parties, and upon the terms and conditions set forth
     below, the land situated at or near the railway station of Richardton,
     County of Stark, State of North Dakota, as described or shown on print
     hereto attached, dated 07/09/04, marked Exhibit "A", and made a part of
     this Lease ("Premises") for the construction, location and maintenance of
     trackage as described herein.

PERMITTED USE

2.   (a)  Industry shall use the Premises exclusively as a site for
          construction, location, and maintenance of trackage and for no other
          purpose. Industry shall not use or store hazardous substances, as
          defined by the Comprehensive Environmental Response, Compensation, and
          Liability Act, as amended ("CERCLA") or petroleum or oil as defined by
          applicable Environmental Laws on the Premises. Industry shall provide
          all relevant information to Railroad's inquiries regarding the use or
          condition of the Premises. Railroad may enter the Premises at any time
          Railroad desires to inspect the Premises.

     (b)  Maintenance for the purpose of this Lease includes, but is not limited
          to, responsibility for providing proper drainage along the relevant
          portion of the track and for keeping the track free and clear of snow,
          ice, vegetation, structures, and other obstacles. Maintenance also
          includes, but is not limited to, responsibility for the maintenance of
          grade crossing warning devices, stop signs, gates, fences or barriers,
          roadway construction, track drainage facilities, lighting, track
          signals and signal maintenance.

TERM

3.   Unless earlier terminated as hereinafter provided, this Lease shall be in
     force for the term of ONE YEAR from its date and shall automatically
     continue thereafter until terminated

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     by either party giving to the other thirty (30) days written notice of its
     desire to terminate the same.

RENTAL

4.   Industry shall pay to Railroad, prior to the Effective Date of this Lease,
     a one-time sum of Five Hundred Dollars ($500.00) for the Lease of the
     Premises.

COMPLIANCE WITH LAWS

5.   (a)  Industry shall be responsible for obtaining, without expense to
          Railroad, all necessary real property rights and public authority and
          permission, including applicable permits, for the maintenance and
          operation of the Premises provided Industry obtains prior written
          consent from Railroad.

     (b)  Industry has examined the Premises and accepts the condition thereof
          "AS IS", and shall exercise its rights and fulfill its obligations
          hereunder in full compliance with all laws, statutes, regulations,
          ordinances, orders, covenants, restrictions, or decisions of any court
          of competent jurisdiction ("Legal Requirements") relating to the use
          of the Premises.

     (c)  Prior to entering the Premises, Industry shall and shall cause its
          contractor to comply with all Railroad's applicable safety rules and
          regulations. Prior to commencing any work on the Premises, Industry
          shall complete and shall require its contractor to complete the
          safety-training program at the Railroad's Internet Website
          "http://contractororientation.com". This training must be completed no
          more than one year in advance of Industry's entry on the Premises.

USE AND MAINTENANCE OF PREMISES

6.   Railroad may require for safety purposes that Industry, at its sole cost
     and expense, provide flagmen, lights, traffic control devices, automatic
     warning devices, or any such safety measure that Railroad deems appropriate
     in connection with Industry's use of the Premises for the purpose
     identified in Section 2 above. Industry shall reimburse Railroad within
     thirty (30) days of receipt of bill rendered therefor for all costs
     expended by Railroad, including but not limited to the cost of Railroad's
     Flagman ($500.00 per eight hour day, $95.00 per hour thereafter), in
     connection with this Section.

7.   In the event Industry requires access to and from the Premises by use of
     Railroad's property adjacent to the Premises, Railroad hereby grants
     Industry a non-exclusive license and permission to enter upon Railroad's
     property for such purpose. Railroad shall, at its sole discretion,
     designate the location or route to be used by Industry. For the purpose of
     this Lease, the designated access, whether specifically defined or not, is
     included in the definition of Premises.

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8.   Industry shall notify Railroad's representative Roadmaster Robert Kinzel,
     at Dickinson, North Dakota telephone (701) 227-7235, five (5) days prior to
     commencing construction/rehabilitation of the track on the Premises.

9.   (a)  All alterations, additions, or betterments to the Premises, other than
          the rails and the ties, shall upon construction, become the sole
          property of Railroad.

     (b)  Industry agrees that Railroad shall not be required to furnish to
          Industry any water, light, power or any other services in connection
          with the use of the Premises.

10.  Industry shall maintain the Premises in a condition satisfactory to
     Railroad. Industry shall not cause, permit, commit, or maintain any waste
     or nuisance in, on or about the Premises.

DEFINITION OF COST AND EXPENSE

11.  (a)  For the purpose of this Lease, "cost" or "costs" "expense or expenses"
          includes, but is not limited to, actual labor and material costs
          including all assignable additives, and material and supply costs at
          current value where used.

     (b)  All invoices are due thirty (30) days after the date of invoice. In
          the event that Industry shall fail to pay any monies due to Railroad
          within thirty (30) days after the invoice date, then Industry shall
          pay interest on such unpaid sum from thirty (30) days after its
          invoice date to the date of payment by Industry at an annual rate
          equal to (i) the greater of (a) for the period January 1 through June
          30, the prime rate last published in The Wall Street Journal in the
          preceding December plus two and one-half percent (2 1/2%), and for the
          period July 1 through December 31, the prime rate last published in
          The Wall Street Journal in the preceding June plus two and one-half
          percent (2 1/2%), or (b) twelve percent (12%), or (ii) the maximum
          rate permitted by law, whichever is less.

RIGHT OF RAILROAD TO USE

12.  Railroad excepts and reserves the right, to be exercised by Railroad and
     any other parties who may obtain written permission or authority from
     Railroad:

     (a)  to maintain, renew, use, operate, change, modify and relocate any
          existing pipe, power, communication lines and appurtenances and other
          facilities or structures of like character upon, over, under or across
          the Premises;

     (b)  to construct, maintain, renew, use, operate, change, modify and
          relocate any tracks or additional facilities or structures upon, over,
          under or across the Premises; or

     (c)  to use the Premises in any manner as the Railroad in its sole
          discretion deems appropriate; provided Railroad uses all commercially
          reasonably efforts to avoid

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          material interference with the use of the Premises by Industry for the
          purpose specified in Section 2 above.

CLEARANCES

13.  (a)  Industry shall not place, permit to be placed, or allow to remain, any
          permanent or temporary material, structure, pole, or other obstruction
          within 8 1/2% feet laterally from the center (nine and one-half
          (9-1/2) feet on either side of the centerline of curved track) or from
          24 feet vertically from the top of the rail of Railroad's track
          ("Minimal Clearances"), provided that if any Legal Requirement
          requires greater clearances than those provided for in this Section
          13, then Industry shall strictly comply with such Legal Requirement
          However, vertical or lateral clearances, which are less than the
          Minimal Clearances but are in compliance with Legal Requirements will
          not be a violation of this Section 13, so long as Industry strictly
          complies with the terms of any such Legal Requirement.

     (b)  Railroad's operation over the track with knowledge of an unauthorized
          reduced clearance will not be a waiver of the covenants of Industry
          contained in this Section 13 or of Railroad's right to recover and be
          indemnified and defended against such damages to property, or injury
          to or death of persons, that may result therefrom.

     (d)  Industry shall not place or allow to be placed any freight car within
          250 feet of either side of any at-grade crossings on the Premises.

LIABILITY

14.  (a)  TO THE FULLEST EXTENT PERMITTED BY LAW, INDUSTRY SHALL RELEASE,
          INDEMNIFY, DEFEND AND HOLD HARMLESS RAILROAD AND RAILROAD'S AFFILIATED
          COMPANIES, PARTNERS, SUCCESSORS, ASSIGNS, LEGAL REPRESENTATIVES,
          OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS (COLLECTIVELY,
          "INDEMNITEES") FOR, FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES,
          FINES, PENALTIES, COSTS, DAMAGES, LOSSES, LIENS, CAUSES OF ACTION,
          SUITS, DEMANDS, JUDGMENTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
          COURT COSTS, ATTORNEYS' FEES AND COSTS OF INVESTIGATION, REMOVAL AND
          REMEDIATION AND GOVERNMENTAL OVERSIGHT COSTS) ENVIRONMENTAL OR
          OTHERWISE (COLLECTIVELY "LIABILITIES") OF ANY NATURE, KIND OR
          DESCRIPTION OF ANY PERSON OR ENTITY DIRECTLY OR INDIRECTLY ARISING OUT
          OF, RESULTING FROM OR RELATED TO (IN WHOLE OR IN PART):

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               (i)  THIS LEASE, INCLUDING, WITHOUT LIMITATION, ITS ENVIRONMENTAL
                    PROVISIONS,

               (ii) ANY RIGHTS OR INTERESTS GRANTED PURSUANT TO THIS LEASE,

               (iii) INDUSTRY'S OCCUPATION AND USE OF THE PREMISES,

               (iv) THE ENVIRONMENTAL CONDITION AND STATUS OF THE PREMISES
                    CAUSED BY, AGGRAVATED BY, OR CONTRIBUTED IN WHOLE OR IN
                    PART, BY INDUSTRY, OR

               (v)  ANY ACT OR OMISSION OF INDUSTRY OR INDUSTRY'S OFFICERS,
                    AGENTS, INVITEES, EMPLOYEES, OR CONTRACTORS, OR ANYONE
                    DIRECTLY OR INDIRECTLY EMPLOYED BY ANY OF THEM, OR ANYONE
                    THEY CONTROL OR EXERCISE CONTROL OVER,

          EVEN IF SUCH LIABILITIES ARISE FROM OR ARE ATTRIBUTED TO, IN WHOLE OR
          IN PART, ANY NEGLIGENCE OF ANY INDEMNITEE. THE ONLY LIABILITIES WITH
          RESPECT TO WHICH INDUSTRY'S OBLIGATION TO INDEMNIFY THE INDEMNITEES
          DOES NOT APPLY ARE LIABILITIES TO THE EXTENT PROXIMATELY CAUSED BY THE
          GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNITEE.

     (B)  FURTHER, NOTWITHSTANDING THE LIMITATION IN SECTION 14(A), INDUSTRY
          SHALL NOW AND FOREVER WAIVE ANY AND ALL CLAIMS, REGARDLESS WHETHER
          BASED ON THE STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, THAT RAILROAD
          IS AN "OWNER", "OPERATOR", "ARRANGER", OR "TRANSPORTER" OF THE
          PREMISES FOR PURPOSES OF CERCLA OR OTHER ENVIRONMENTAL LAWS. INDUSTRY
          WILL INDEMNIFY, DEFEND AND HOLD THE INDEMNITEES HARMLESS FROM ANY AND
          ALL SUCH CLAIMS REGARDLESS OF THE NEGLIGENCE OF THE INDEMNITEES.
          INDUSTRY FURTHER AGREES THAT THE USE OF THE PREMISES AS CONTEMPLATED
          BY THIS LEASE SHALL NOT IN ANY WAY SUBJECT RAILROAD TO CLAIMS THAT
          RAILROAD IS OTHER THAN A COMMON CARRIER FOR PURPOSES OF ENVIRONMENTAL
          LAWS AND EXPRESSLY AGREES TO INDEMNIFY, DEFEND, AND HOLD THE
          INDEMNITEES HARMLESS FOR ANY AND ALL SUCH CLAIMS. IN NO EVENT SHALL
          RAILROAD BE RESPONSIBLE FOR THE ENVIRONMENTAL CONDITION OF THE
          PREMISES.

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     (C)  INDUSTRY FURTHER AGREES, REGARDLESS OF ANY NEGLIGENCE OR ALLEGED
          NEGLIGENCE OF ANY INDEMNITEE, TO INDEMNIFY, AND HOLD HARMLESS THE
          INDEMNITEES AGAINST AND ASSUME THE DEFENSE OF ANY LIABILITIES ASSERTED
          AGAINST OR SUFFERED BY ANY INDEMNITEE UNDER OR RELATED TO THE FEDERAL
          EMPLOYERS' LIABILITY ACT ("FELA") WHENEVER EMPLOYEES OF INDUSTRY OR
          ANY OF ITS AGENTS, INVITEES, CONTRACTORS CLAIM OR ALLEGE THAT THEY ARE
          EMPLOYEES OF ANY INDEMNITEE OR OTHERWISE. THIS INDEMNITY SHALL ALSO
          EXTEND, ON THE SAME BASIS, TO FELA CLAIMS BASED ON ACTUAL OR ALLEGED
          VIOLATIONS OF ANY FEDERAL, STATE OR LOCAL LAWS OR REGULATIONS,
          INCLUDING BUT NOT LIMITED TO THE SAFETY APPLIANCE ACT, THE BOILER
          INSPECTION ACT, THE OCCUPATIONAL HEALTH AND SAFETY ACT, THE RESOURCE
          CONSERVATION AND RECOVERY ACT, AND ANY SIMILAR STATE OR FEDERAL
          STATUTE.

     (D)  Upon written notice from Railroad, Industry agrees to assume the
          defense of any lawsuit or other proceeding brought against any
          Indemnitee by any entity, relating to any matter covered by this Lease
          for which Industry has an obligation to assume liability for and/or
          save and hold harmless any Indemnitee. Industry shall pay all costs
          incident to such defense, including, but not limited to, attorneys'
          fees, investigators' fees, litigation and appeal expenses, settlement
          payments, and amounts paid in satisfaction of judgments.

PERSONAL PROPERTY WAIVER

15.  ALL PERSONAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, FIXTURES, EQUIPMENT,
     OR RELATED MATERIALS UPON THE PREMISES WILL BE AT THE RISK OF INDUSTRY
     ONLY, AND NO INDEMNITEE WILL BE LIABLE FOR ANY DAMAGE THERETO OR THEFT
     THEREOF, WHETHER OR NOT DUE IN WHOLE OR IN PART TO THE NEGLIGENCE OF ANY
     INDEMNITEE.

INSURANCE

16.  Industry shall, at its sole cost and expense, procure and maintain during
     the life of this Agreement, except as stated in subsection D below, the
     following insurance coverage:

     A.   Commercial General Liability Insurance. This insurance shall contain
          broad form contractual liability with a combined single limit of a
          minimum of $5,000,000 each occurrence and an aggregate limit of at
          least $ 10,000,000. Coverage must be purchased on a post 1998 ISO
          occurrence or equivalent and include coverage for, but not limited to,
          the following:

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          -    Bodily Injury and Property Damage

          -    Personal Injury and Advertising Injury

          -    Fire legal liability

          -    Products and completed operations

     This policy shall also contain the following endorsements, which shall be
     indicated on the certificate of insurance:

          -    It is agreed that any workers' compensation exclusion does not
               apply to Railroad's payments related to the Federal Employers
               Liability Act or a Railroad Wage Continuation Program or similar
               programs and any payments made are deemed not to be either
               payments made or obligations assumed under any Workers
               Compensation, disability benefits, or unemployment compensation
               law or similar law.

          -    The definition of insured contract shall be amended to remove any
               exclusion or other limitation for any work being done within 50
               feet of railroad property.

          -    Any exclusions related to the explosion, collapse and underground
               hazards shall be removed.

     No other endorsements limiting coverage may be included on the policy with
     regard to the work being performed under this agreement.

     B.   Business Automobile Insurance. This insurance shall contain a combined
          single limit of at least $1,000,000 per occurrence, and include
          coverage for, but not limited to the following:

          -    Bodily injury and property damage

          -    Any and all vehicles owned, used or hired

     C.   Workers Compensation and Employers Liability insurance including
          coverage for, but not limited to:

          -    Industry's statutory liability under the worker's compensation
               laws of the state(s) in which the work is to be performed. If
               optional under State law, the insurance must cover all employees
               anyway.

          -    Employers' Liability (Part B) with limits of at least $500,000
               each accident, $500,000 by disease policy limit, $500,000 by
               disease each employee.

          -    All such coverage shall include coverage for the Federal
               Employers Liability Act and include an alternate employer
               endorsement naming Railroad as the alternate employer with
               coverage for the Federal Employers Liability Act. The term
               Alternate Employer as used herein and above is being used solely
               as an insurance term of art. By Industry's actions of obtaining
               insurance coverage as set forth above Industry is in no way
               intending or evidencing an alternate or dual employment
               relationship with Railroad. The parties agree: (1) Railroad has
               no right to direct or control Industry's employees with respect
               to the physical conduct or the performance of services; (2)
               Railroad does not supervise, nor does it have the right to
               supervise, details of Industry's employees' work or the manner in
               which such work is accomplished; (3)

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               Railroad retains no control over the details of the Industry's
               employees' work; and (4) Railroad has no right to select, hire,
               train or fire Industry's employees.

     D.   Industry shall, at its sole cost and expense, procure prior to
          commencing and maintain during the entire period of any construction
          or maintenance on the Track the following insurance coverage:

          Railroad Protective Liability insurance naming only the Railroad as
          the Insured with coverage of at least $5,000,000 per occurrence and
          $10,000,000 in the aggregate. The policy shall be issued on a standard
          ISO form CG 00 35 10 93 and include the following:

          -    Endorsed to include the Pollution Exclusion Amendment (ISO form
               CG 28 31 10 93)

          -    Endorsed to include the Limited Seepage and Pollution
               Endorsement.

          -    Endorsed to include Evacuation Expense Coverage Endorsement.

          -    No other endorsements restricting coverage may be added.

          -    The original policy must be provided to the Railroad prior to
               performing any work or services under this Agreement

     In lieu of providing a Railroad Protective Liability Policy, Industry may
     participate in Railroad's Blanket Railroad Protective Liability Insurance
     Policy available to Industry or its contractor. The limits of coverage are
     the same as above. The cost is $_______.00.

          -    I ELECT to participate in Railroad's Blanket Policy for
               activities commencing as of the date hereof (if any);

          -    I elect NOT to participate in Railroad's Blanket Policy for
               activities commencing as of the date hereof (if any).

Other Requirements:

Where allowable by law, all policies (applying to coverage listed above) shall
contain no exclusion for punitive damages and certificates of insurance shall
reflect that no exclusion exists.

     Industry agrees to waive its right of recovery against Railroad for all
     claims and suits against Railroad. In addition, its insurers, through
     policy endorsement, waive their right of subrogation against Railroad for
     all claims and suits. The certificate of insurance must reflect waiver of
     subrogation endorsement. Industry further waives its right of recovery, and
     its insurers also waive their right of subrogation against Railroad for
     loss of its owned or leased property or property under its care, custody or
     control.

     Industry's insurance policies through policy endorsement must include
     wording, which states that the policy shall be primary and non-contributing
     with respect to any insurance carried by Railroad. The certificate of
     insurance must reflect that the above wording is included in evidenced
     policies.

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     All policy(ies) required above (excluding Workers Compensation and if
     applicable, Railroad Protective) shall include a severability of interest
     endorsement and shall name Railroad and Staubach Global Services - RR, Inc.
     as an additional insured with respect to work performed under this
     agreement. Severability of interest and naming Railroad and Staubach Global
     Services - RR, Inc. as additional insureds shall be indicated on the
     certificate of insurance.

     If Industry elects to include any deductible, self-insured retention or
     other financial responsibility for claims, Industry shall itself directly
     cover, in lieu of insurance, any and all Railroad's liabilities that would
     otherwise, in accordance with the provisions of this License, be covered by
     Industry's insurance as if Industry elected not to include a deductible,
     self-insured retention or other financial responsibility for claims.

     Prior to commencing the Work, Industry shall furnish to Railroad an
     acceptable certificate(s) of insurance including an original signature of
     the authorized representative evidencing the required coverage,
     endorsements, and amendments and referencing the contract audit/folder
     number if available. The policy(ies) shall contain a provision that
     obligates the insurance company(ies) issuing such policy(ies) to notify
     Railroad in writing at least 30 days prior to any cancellation,
     non-renewal, substitution or material alteration. This cancellation
     provision shall be indicated on the certificate of insurance. In the event
     of a claim or lawsuit involving Railroad arising out of this agreement,
     Industry will make available any required policy covering such claim or
     lawsuit.

     Any insurance policy shall be written by a reputable insurance company
     acceptable to Railroad or with a current Best's Guide Rating of A- and
     Class VII or better, and authorized to do business in the state(s) in which
     the service is to be provide.

     Industry represents that this License been thoroughly reviewed by
     Industry's insurance agent(s)/broker(s), who have been instructed by
     Industry to procure the insurance coverage required by this Agreement.
     Allocated Loss Expense shall be in addition to all policy limits for
     coverages referenced above.

     Not more frequently than once every five years, Railroad may reasonably
     modify the required insurance coverage to reflect then-current risk
     management practices in the railroad industry and underwriting practices in
     the insurance industry.

     If any portion of the operation is to be subcontracted by Industry,
     Industry shall require that the subcontractor shall provide and maintain
     insurance coverages as set forth herein, naming Railroad as an additional
     insured, and shall require that the subcontractor shall release, defend and
     indemnify Railroad to the same extent and under the same terms and
     conditions as Industry is required to release, defend and indemnify
     Railroad herein.

     Failure to provide evidence as required by this section shall entitle, but
     not require, Railroad to terminate this Agreement immediately. Acceptance
     of a certificate that does

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     not comply with this section shall not operate as a waiver of Industry's
     obligations hereunder.

     The fact that insurance (including, without limitation, self-insurance) is
     obtained by Industry shall not be deemed to release or diminish the
     liability of Industry including, without limitation, liability under the
     indemnity provisions of this License. Damages recoverable by Railroad shall
     not be limited by the amount of the required insurance coverage.

For purposes of this section, Railroad shall mean "Burlington Northern Santa Fe
Corporation", "The Burlington Northern and Santa Fe Railway Company" and the
subsidiaries, successors, assigns, and affiliates of each.

ENVIRONMENTAL

17.  (a)  Industry shall strictly comply with all federal, state and local
          environmental laws and regulations in its use of the Premises,
          including, but not limited to, the Resource Conservation and Recovery
          Act, as amended (RCRA), the Clean Water Act, the Oil Pollution Act,
          the Hazardous Materials Transportation Act, CERCLA (collectively
          referred to as the "Environmental Laws"). Industry shall not maintain
          a treatment, storage, transfer or disposal facility, or underground
          storage tank, as defined by Environmental Laws on the Premises.
          Industry shall not release or suffer the release of oil or hazardous
          substances, as defined by Environmental Laws on or about the Premises.

     (b)  Industry shall give Railroad immediate notice to Railroad's Resource
          Operations Center at (800) 832-5452 of any release of hazardous
          substances on or from the Premises, violation of Environmental Laws,
          or inspection or inquiry by governmental authorities charged with
          enforcing Environmental Laws with respect to Industry's use of the
          Premises. Industry shall use the best efforts to promptly respond to
          any release on or from the Premises. Industry also shall give Railroad
          immediate notice of all measures undertaken on behalf of Industry to
          investigate, remediate, respond to or otherwise cure such release or
          violation.

     (c)  In the event that Railroad has notice from Industry or otherwise of a
          release or violation of Environmental Laws on the Premises which
          occurred or may occur during the term of this Lease, Railroad may
          require Industry, at Industry's sole risk and expense, to take timely
          measures to investigate, remediate, respond to or otherwise cure such
          release or violation affecting the Premises or Railroad's
          right-of-way.

     (d)  Industry shall promptly report to Railroad in writing any conditions
          or activities upon the Premises which create a risk of harm to
          persons, property or the environment and shall take whatever action is
          necessary to prevent injury to persons or property arising out of such
          conditions or activities; provided, however,

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          that Industry's reporting to Railroad shall not relieve Industry of
          any obligation whatsoever imposed on it by this Lease. Industry shall
          promptly respond to Railroad's request for information regarding said
          conditions or activities.

     (e)  Railroad may at its option prior to cancellation of this Lease,
          require Industry to conduct an environmental audit of said Premises,
          at Industry's sole cost and expense, to determine if any environmental
          damage to said Premises has occurred during Industry's occupancy
          thereof. The audit shall be conducted to Railroad's satisfaction and a
          copy of the audit report shall promptly be provided to Railroad for
          its review. Industry shall pay all expenses for any remedial action
          that may be required as a result of said audit to correct any
          environmental damage, and all necessary work shall be performed by
          Industry prior to cancellation of this Lease.

ALTERATIONS

18.  Industry may not make any alterations of the Premises or permanently affix
     anything to the Premises or any buildings or other structures adjacent to
     the Premises without Railroad's prior written consent.

NO WARRANTIES

19.  RAILROAD'S DUTIES AND WARRANTIES ARE LIMITED TO THOSE EXPRESSLY STATED IN
     THIS LEASE AND SHALL NOT INCLUDE ANY IMPLIED DUTIES OR IMPLIED WARRANTIES,
     NOW OR IN THE FUTURE. NO REPRESENTATIONS OR WARRANTEES HAVE BEEN MADE BY
     RAILROAD OTHER THAN THOSE CONTAINED IN THIS LEASE. INDUSTRY HEREBY WAIVES
     ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PREMISES
     WHICH MAY EXIST BY OPERATION OF LAW OR IN EQUITY, INCLUDING, WITHOUT
     LIMITATION, ANY WARRANTY OF MERCHANTABILITY, HABITABELITY OR FITNESS FOR A
     PARTICULAR PURPOSE.

QUIET ENJOYMENT

20.  RAILROAD DOES NOT WARRANT ITS TITLE TO THE PROPERTY NOR UNDERTAKE TO DEFEND
     INDUSTRY IN THE PEACEABLE POSSESSION OR USE THEREOF. NO COVENANT OF QUIET
     ENJOYMENT IS MADE.

DEFAULT

21.  (a)  If Industry creates or maintains any condition, including without
          limitation, any environmental condition, on or about the Premises,
          which in Railroad's sole judgment interferes with or endangers the
          operations of Railroad, or in case of any assignment or transfer of
          this Lease by operation of law, Railroad may, at its

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          option, terminate this Lease by serving five (5) days' notice in
          writing upon Industry.

     (b)  Except as otherwise set forth in subparagraph (a) above, if Industry
          defaults on any of the covenants or agreements of Industry contained
          in this document, for a period of thirty (30) days following written
          notice of such default by Railroad, Railroad may, at its option,
          terminate this Lease on five (5) days' notice in writing to Industry.

     Any waiver by Railroad of any default or defaults shall not constitute a
     waiver of the right to terminate this Lease for any subsequent default or
     defaults, nor shall any such waiver in any way affect Railroad's ability to
     enforce any Section of this Lease. The remedy set forth in this Section 21
     shall be in addition to, and not in limitation of, any other remedies that
     Railroad may have at law or in equity.

LIENS

22.  Industry shall promptly pay and discharge any and all liens arising out of
     any construction, alterations or repairs done, suffered or permitted to be
     done by Industry on Premises. Railroad is hereby authorized to post any
     notices or take any other action upon or with respect to Premises that is
     or may be permitted by law to prevent the attachment of any such liens to
     Premises; provided, however, that failure of Railroad to take any such
     action shall not relieve Industry of any obligation or liability under this
     Section 22 or any other Section of this Lease.

TERMINATION

23.  This Lease may be terminated by either party, at any time, by serving
     thirty (30) days' written notice of termination upon the other party. Upon
     expiration of the time specified in such notice, this Lease and all rights
     of Industry shall absolutely cease.

24.  If Industry fails to surrender to Railroad the Premises, upon any
     termination of this Lease, all liabilities and obligations of Industry
     hereunder shall continue in effect until the Premises are surrendered.
     Termination shall not release Industry from any liability or obligation,
     whether of indemnity or otherwise, resulting from any events happening
     prior to the date of termination.

ASSIGNMENT/SUBLETTING

25.  Neither Industry, nor the heirs, legal representatives, successors or
     assigns of Industry, nor any subsequent assignee, shall sublease the
     Premises nor assign or transfer this Lease or any interest herein, without
     the prior written consent and approval of Railroad, which may be withheld
     in Railroad's sole discretion.

<PAGE>

Form Approved by VP-Law

NOTICES

26.  Any notice required or permitted to be given hereunder by one party to the
     other shall be in writing and the same shall be given and shall be deemed
     to have been served and given if (i) placed in the United States mail,
     certified, return receipt requested, or (ii) deposited into the custody of
     a nationally recognized overnight delivery service, addressed to the party
     to be notified at the address for such party specified below, or to such
     other address as the party to be notified may designate by giving the other
     party no less than thirty (30) days' advance written notice of such change
     in address.

     If to Railroad:   Staubach Global Services - RR, Inc.
                       3017 Lou Menk Drive, Suite 100
                       Ft. Worth, TX 76131
                       Attn: Track Agreements

     If to Industry:   Red Trail Energy L.L.C.
                       37th Street East
                       Richardton, North Dakota 58652

SURVIVAL

27.  Neither termination nor expiration will release either party from any
     liability or obligation under this Lease, whether of indemnity or
     otherwise, resulting from any acts, omissions or events happening prior to
     the date of termination or expiration, or, if later, the date when the
     right-of-way is restored to its condition as of the Effective Date.

RECORDATION

28.  It is understood and agreed that this Lease shall not be placed on public
     record.

APPLICABLE LAW

29.  All questions concerning the interpretation or application of provisions of
     this Lease shall be decided according to the laws of the State of North
     Dakota.

SEVERABILITY

30.  To the maximum extent possible, each provision of this Lease shall be
     interpreted in such manner as to be effective and valid under applicable
     law, but if any provision of this Lease shall be prohibited by, or held to
     be invalid under, applicable law, such provision shall be ineffective
     solely to the extent of such prohibition or invalidity, and this shall not
     invalidate the remainder of such provision or any other provision of this
     Lease.

<PAGE>

                                   [DIAGRAM]

<PAGE>

                                   [DIAGRAM]

<PAGE>

Form Approved by VP-Law

INTEGRATION

31.  This Lease is the full and complete agreement between Railroad and Industry
     with respect to all matters relating to lease of the Premises, and
     supersedes any and all other agreements between the parties hereto relating
     to lease of the Premises. However, nothing herein is intended to terminate
     any surviving obligation of Industry or Industry's obligation to defend and
     hold Railroad harmless in any prior written agreement between the parties.

MISCELLANEOUS

32.  In the event that the Industry consists of two of more parties, all
     covenants and agreements of Industry herein contained shall be the joint
     and several covenants and agreements of such parties.

33.  The waiver by Railroad of the breach of any provision herein by Industry
     shall in no way impair the right of Railroad to enforce that provision for
     any subsequent breach thereof.

IN WITNESS WHEREOF, this Lease has been duly executed, in duplicate, by the
parties hereto as of the day and year first above written.

                                        THE BURLINGTON NORTHERN AND SANTA
                                        FE RAILWAY COMPANY

                                        By: /s/ Stephen M. Kuzma
                                            ------------------------------------
                                            Stephen M. Kuzma
                                            Manager - Land Revenue Management

                                        RED TRAIL ENERGY L.L.C.
                                           P.O. Box 11
                                           Richardton, North Dakota 58652

                                        By: /s/ Ambrose R. Hoff
                                            ------------------------------------
                                        Title: Red Trail Energy, President
                                               Ambrose R. Hoff<PAGE>

                                                                    Exhibit 10.2

                              MANAGEMENT AGREEMENT

                 RED TRAIL ENERGY, LLC / GREENWAY CONSULTING LLC

This Agreement made and entered into this 17th day of December, 2003, by and
between Red Trail Energy, LLC, a North Dakota Limited Liability Company of
Richardton, North Dakota (Owner) and Greenway Consulting, LLC, a Minnesota LLC
(Greenway);

                                    RECITALS

     A.   Owner is in the process of designing and constructing an ethanol plant
          in Stark County, State of North Dakota, and is in need of management
          services to operate the ethanol plant;

     B.   Greenway is an ethanol consulting company providing, among other
          things, management services for the operation of ethanol plants.

     C.   Owner is desirous of utilizing the management services of Greenway,
          and Greenway is desirous of providing such services to Owner.

     NOW THEREFORE, in consideration of the following terms and conditions,
Owner and Greenway hereby agree as follows:

                          SECTION I. SCOPE OF SERVICES

     Greenway shall provide the following services:

     A.   Management of day to day plant operations, maintenance and repair,
          including management of installation of additional necessary capital
          equipment;

     B.   Set up, monitor and oversee policies and procedures for programs for
          input acquisitions including, among other things, corn supply

     C.   Sole operational control including hiring and termination of the
          General Manager, Controller/CFO and Plant Manager. Greenway will also
          have ultimate direction of all plant employees primarily through
          control of management. All employees will be on owner's payroll with
          the exception of the General Manager and Plant Manager whose
          compensation will be paid by Greenway. Compensation for all employees
          will be set by Greenway with the exception that General Manager,
          Controller/CFO and Plant Manager's salaries require Owner approval.

<PAGE>

     D.   Greenway will report directly to the Board of Directors regarding all
          plant management concerns on at least a monthly basis or more
          frequently as necessary.

                                SECTION II. TERM

     This Agreement shall begin thirty (30) days after successful commissioning
of the plant and shall run for five (5) consecutive years. Successful
commissioning is defined as reasonable compliance with the engineer's
performance standards.

                            SECTION III. COMPENSATION

     Owner shall pay Greenway compensation for services rendered under the terms
of this Agreement as follows:

     A.   Two Hundred Thousand Dollars ($200,000) per year payable in equal
          monthly installments of Sixteen Thousand Six Hundred Sixty-Six and
          67/100 Dollars ($16,666.67) on the first day of each month.

     B.   Reimbursement to Greenway for the salary and benefit package for the
          General Manager and the Plant Manager payable each month, along with
          the monthly payment in "A." above.

     C.   Expenses are in addition to the above compensation and shall be billed
          monthly as incurred. Expenses shall include all out-of-pocket
          expenditures paid or accrued by Greenway in carrying out the terms of
          this Management Agreement. If expenses exceeding $5,000 per month are
          required, Greenway shall seek pre-approval by Owner, which approval
          shall not be unreasonably withheld.

     D.   Four percent (4%) of the pre-tax net income, which income shall
          include all revenues including, but not limited to, governmental
          payments. This sum shall be payable within thirty (30) days after
          conclusion of each quarter, beginning with the first full quarter
          after the Contract commences and shall terminate after payment for the
          twentieth (20th) consecutive quarter.

                       SECTION IV. STANDARD OF PERFORMANCE

     All services provided by Greenway will be provided on a best effort basis
with no warranties of performance due to limitations of the equipment.

                             SECTION V. TERMINATION

     This Agreement may not be terminated by either party except for good cause
shown. 'Good Cause' shall be defined as (i) Insolvency or Bankruptcy of either
party (ii) Dishonest or fraudulent

                                   Page 2 of 5

<PAGE>

acts of either party. (iii) Gross misconduct of either party. If either party
desires to terminate this agreement, that party shall provide written notice to
the other party setting forth, with particularity, the claimed basis for
termination. The party receiving such notice shall have thirty (30) days to
dispute this notice or to correct the claimed defect. In the event the party
receiving notice disputes the claim it shall submit the claim to Arbitration
pursuant to Section IX herein.

     Failure to dispute this notice or to arbitrate or to correct the claimed
defect within the given time frame shall result in termination of this Agreement
at the option of the non-defaulting party. In the event of termination all sums
accrued under this Agreement shall then become immediately due in full and any
unpaid balance shall carry an interest rate of eight percent (8%) per annum.

                           SECTION VI. INDEMNIFICATION

     RED TRAIL ENERGY, LLC will indemnify and hold Greenway harmless from and
against all claims, liabilities, losses, damages, expenses, attorney fees and
disbursements related to or arising out of Greenway's performance under this
Agreement, except in the event of gross misconduct on the part of Greenway, its
employees or agents.

                             SECTION VII. INSURANCE

     During the term of this Agreement, each party shall provide Workers'
Compensation Insurance within the statutory requirements for all of its
employees. Owner shall provide comprehensive general liability insurance and
automobile liability insurance to cover claims for personal injury, death or
property damage which may arise out of the performance of this Agreement. Owner
agrees that Greenway shall be named as an additional named insured under its
general liability and automobile liability insurance policies.

     Comprehensive general liability limits shall be at least Two Million
Dollars ($2,000,000) for bodily injury or death for any one occurrence and Five
Million dollars ($5,000,000) for property damage. Automobile liability limits
shall be at least One Million Dollars ($1,000,000) for any one person with an
aggregate of Two Million Dollars ($2,000,000) for any occurrence of bodily
injury or property damage.

     Upon request, Owner agrees to furnish Greenway with a certificate of
insurance naming Greenway as an additional insured as described above.

                           SECTION VIII. GOVERNING LAW

     This Agreement shall be governed by the laws of the State of North Dakota
with respect to interpretation and performance.

                                   Page 3 of 5

<PAGE>

                             SECTION IX. ARBITRATION

     If any dispute arises out of the interpretation or performance of this
Agreement, the matter shall be referred to Arbitration pursuant to the
commercial rules of the American Arbitration Association. The Arbitration shall
be conducted in Fargo, North Dakota. Each party to the Arbitration shall bear
one half, each, of the expenses of the Arbitrator(s), including their fees and
costs, but each party shall bear their own expenses, including attorney fees.

                               SECTION X. NOTICES

     Any written notice or communication required or permitted by this
Agreement, or by law, to be served upon, given to, or delivered to either party,
by the other party, shall be in writing, and shall be deemed duly served, given,
or delivered when personally delivered to the party to whom it is addressed, or
in lieu of such personal services, when deposited in the United States mail,
first class postage prepaid, addressed to Owner at:

     RED TRAIL ENERGY, LLC
     P.O. BOX 11/11 SOUTH AVE WEST
     RICHARDTON, NORTH DAKOTA 58652
     ATTN: FRANK KIRCHENHEITER

     Or to:
     GREENWAY CONSULTING, LLC
     74 SOUTH COUNTY ROAD 22
     MORRIS, MINNESOTA 56267
     ATTN: GERALD BACHMEIER

                       SECTION XI. INDEPENDENT CONTRACTOR

     Greenway is an independent Consultant and nothing in this Agreement shall
constitute or designate Greenway or any of its employees or agents as employees
of Owner.

                          SECTION XII. CONFIDENTIALITY

     Neither party shall disclose confidential information of the other party to
a third party. (See previously executed Non-Disclosure Agreement which shall
remain in effect; Exhibit A.) Each party shall designate to the other party
information it considers to be confidential and not part of the public domain. A
violation of this provision shall be resolved through Section IX. Arbitration,
herein.

                           SECTION XIII. MODIFICATION

     This Agreement constitutes the entire agreement between the parties. Any
prior agreements, promises, negotiations or representations not expressly set
forth in this Agreement are of no force

                                   Page 4 of 5

<PAGE>

or effect. This Agreement may only be modified upon the written agreement of the
parties executed as an amendment to this Agreement.

                             SECTION XIV. ASSIGNMENT

     This Agreement shall be binding upon the parties and their respective
assigns, representatives and agents including upon any third party buyer of all
or a part of Owner's interest herein.

     IN WITTNESS WHEREOF, the Parties have executed this Agreement in the day
and year first above written. By signature of its representative(s) below, each
Party affirms that it has taken all necessary action to authorize said
representative(s) to execute this Agreement.

     EACH PARTY AGREES IT HAS READ AND UNDERSTANDS ALL THE TERMS OF THIS
AGREEMENT.

                                        OWNER: RED TRAIL ENERGY, LLC

                                        By: /s/ Frank Ambrose Hoff
                                            ------------------------------------
                                            Frank Ambrose Hoff
                                            Its: President

                                        CONSULTANT: GREENWAY CONSULTING LLC

                                        By: /s/ Gerald Bachmeier
                                            ------------------------------------
                                            Gerald Bachmeier
                                            Its Chief Manager

                                   Page 5 of 5

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