Document:

NEURALSTEM,
INC.

    

    STOCK
PLAN

    

    STOCK
OPTION AGREEMENT

    

    Unless
otherwise defined herein, the terms defined in the Neuralstem, Inc [____] Stock
Plan (“Plan”) shall have the same defined meanings in this Option
Agreement.

    

    
      	
              I.

            	
              NOTICE
      OF GRANT

            

    

    

    The
Optionee has been granted an Option to purchase Common Stock (“Shares”) of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:

    

    
      
        
          	
                  Optionee

                	
                  [____]

                
	 
      	 
      
	
                  Grant
      Number

                	
                  [         ]

                
	 
      	 
      
	
                  Date
      of Grant

                	
                  [         ]

                
	 
      	 
      
	
                  Vesting
      Commencement Date

                	
                  [
      Date ]

                
	 
      	 
      
	
                  Exercise
      Price per Share

                	 
      
	 
      	 
      
	
                  Total
      Number of Shares

                	
                  [        ]
      shares

                
	 
      	 
      
	
                  Total
      Exercise Price

                	
                  $[        ]

                
	 
      	 
      
	
                  Type
      of Option:

                	
                   ̈     Incentive
      Stock Option 1

                
	 
      	 
      
	 
      	
                   ̈     Nonstatutory
      Stock Option

                
	 
      	 
      
	
                  Term/Expiration
      Date:

                	
                  [
      XXX years from grant ][in no event longer than 10
  years]

                

        

      

    

    

    Vesting
Schedule:

    

    So long
as Optionee is an Employee, Consultant or Member of the Board (collectively a
“Service Provider”), this Option shall be exercisable, in whole or in part,
according to the following vesting schedule (“Vesting Schedule”):

    

    [   Description
of vesting terms   ]

    

    In the
event Optionee ceases to be a Service Provider, this Option shall immediately
cease vesting and the unvested portion will laps.

     

      
        

      

    

    1
Notwithstanding the initial status as an ISO, upon the occurrence of certain
events as provided for in the Code, ISO qualification may
terminate.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Termination
Period:

    

    This
Option shall be exercisable after Optionee ceases to be a Service Provider as
follows:

    

    (i)           Resignation
— Option shall remain exercisable until the Expiration Date;

    

    (ii)          Termination
for Cause – Option shall terminate immediately.  For purposes
of this Option, cause shall be determined at the sole discretion of management
unless Service Provider is a party to an employment agreement defining such
term.  In such event, “Cause” will have the definition provided for in
the agreement.

    

    (iii)         Death or
Disability—Option shall remain exercisable for a period of 24 months from
the occurrence.  For purposes of this Option, “Disability" means total
and permanent disability as defined in Section 22(e)(3) of the
Code.

    

    
      	
              II. 

            	
              AGREEMENT

            

    

    

    1.          Grant of
Option.  The Committee of the Company hereby grants to the
Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option")
to purchase the number of Shares set forth in the Notice of Grant, at the
exercise price per Share set forth in the Notice of Grant (the "Exercise
Price"), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference.  Subject to Section 10.1 of the
Plan, in the event of a conflict between the terms and conditions of the Plan
and this Option Agreement, the terms and conditions of the Plan shall
prevail.

    

    If
designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this
Option is intended to qualify as an Incentive Stock Option as defined in
Section 422 of the Code.  Nevertheless, to the extent that it
exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated
as a Nonstatutory Stock Option ("NSO").

    

    2.          Exercise of
Option.

    

    (a)           Right to
Exercise.  This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and with the
applicable provisions of the Plan and this Option Agreement.

    

    (b)         Method of
Exercise.  This Option shall be exercisable by delivery of an
exercise notice in the form attached as Exhibit A (the “Exercise Notice”) which
shall state the election to exercise the Option, the number of Shares, with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares.  This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by the aggregate
Exercise Price.

    

    No Shares
shall be issued pursuant to the exercise of an Option unless such issuance and
such exercise comply with Applicable laws.  Assuming such compliance,
for income tax purposes the Shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to such
Shares.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    3.     
      Optionee's
Representations.  In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this Option
is exercised, the Optionee shall, if required by the Company, concurrently with
the exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as
Exhibit B.

    

    4.        
   Lock-Up
Period.  Optionee hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing Underwriter")
in connection with any registration of the offering of any securities of the
Company under the Securities Act, Optionee shall not sell or otherwise
transfer any Shares or other securities of the Company during the 180-day period
(or such other period as may be requested in writing by the Managing Underwriter
and agreed to in writing by the Company) (the "Market Standoff Period")
following the effective date of a registration statement of the Company filed
under the Securities Act.  Such restriction shall apply only to
the first registration statement of the Company to become effective under the
Securities Act that includes securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities
Act.  The Company may impose stop-transfer instructions with respect
to securities subject to the foregoing restrictions until the end of such Market
Standoff Period.

    

    5.           
Method of
Payment.  Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the
Optionee:

    

    (a)         cash
or check;

    

    (b)         consideration
received by the Company by way of cashless exercise; or

    

    (c)         surrender
of other Shares which, (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date
of surrender, and (ii) have a Fair Market Value on the date of surrender equal
to the aggregate Exercise Price of the Exercised Shares.

    

    6.      
    Restrictions on
Exercise.  This Option may not be exercised until such time as
the Plan has been approved by the stockholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.

    

    7.    
       Non-Transferability of
Option.  This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Optionee only by Optionee.  The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

    

    8.       
    Term of
Option.  This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.

    

    9.    
       Tax
Consequences.  Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares.  THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

     

    (a)         Exercise of
ISO.  If this Option qualifies as an ISO, there will be no
regular federal income tax liability upon the exercise of the Option, although
the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.  In order to
retain the favorable income tax treatment of ISOs, the ISOs must be exercised on
or before three months after retirement.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    (b)         Exercise of Nonstatutory
Stock Option.  There may be a regular federal income tax
liability upon the exercise of a Nonstatutory Stock Option.  The
Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price.  If
Optionee is an Employee or a former Employee, the Company will be required to
withhold from Optionee's compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

    

    (c)         Disposition of
Shares.  In the case of an NSO, if Shares are held for at least
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.  In the case
of an ISO, if Shares transferred pursuant to the Option are held for at least
one year after exercise and of at least two years after the Date of Grant, any
gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal income tax purposes.  If Shares purchased
under an ISO are disposed of within one year after exercise or two years after
the Date of Grant, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (1) the Fair Market
Value of the Shares on the date of exercise, or (2) the sale price of the
Shares.  Any additional gain will be taxed as capital gain, short-term
or long-term depending on the period that the ISO Shares were held.

    

    (d)         Notice of Disqualifying
Disposition of ISO Shares.  If the Option granted to Optionee
herein is an ISO, and if Optionee sells or otherwise disposes of any of the
Shares acquired pursuant to the ISO on or before the later of (1) the date
two years after the Date of Grant, or (2) the date one year after the date
of exercise, the Optionee shall immediately notify the Company in writing of
such disposition.  Optionee agrees that Optionee may be subject to
income tax withholding by the Company on the compensation income recognized by
the Optionee.

    

    10.          Entire Agreement; Governing
Law.  The Plan is incorporated herein by
reference.  The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Optionee with respect to the subject matter hereof, and may not be modified
adversely to the Optionee's interest except by means of a writing signed by the
Company and Optionee.  This agreement is governed by the internal
substantive laws but not the choice of law rules of Delaware.

    

    11.          No Guarantee of Continued
Service.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).  OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    Optionee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof.  Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option.  Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan or this
Option.  Optionee further agrees to notify the Company upon any change
in the residence address indicated below.

     

    [This
Space Intentionally Left Blank]

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    
      
        
          
            
              
                
                  	
                          OPTIONEE:

                        	 
      	
                          Neuralstem,
      Inc.

                        
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                          Signature

                        	 
      	
                          By

                        
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                          Title

                        
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                          Residence
      Address

                        	 
      	 
      

                

              

            

          

        

      

    

    

    [Signature
Page to Option Agreement]

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    EXHIBIT
A

    NEURALSTEM,
INC.

    

    [_____]
STOCK PLAN

    

    EXERCISE
NOTICE

    

    Neuralstem,
Inc.

    Attention:  ___________

    

    1.        
   Exercise of
Option.  Effective as of today, ___________, 20__, the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_________ shares of the Common Stock (the "Shares") of Neuralstem,
Inc.  (The "Company") under and pursuant to the [_____] Stock Plan
(the "Plan") and the Stock Option Agreement dated ____________, 20[__] (the
"Option Agreement").

    

    2.          
 Delivery of
Payment.  Purchaser herewith delivers to the Company the full
purchase price of the Shares, as set forth in the Option Agreement.

    

    3.          
 Representations
of Optionee.  Optionee acknowledges that Optionee has received,
read and understood the Plan and the Option Agreement and agrees to abide by and
be bound by their terms and conditions.

    

    4.          
 Rights as
Stockholder.  Until the issuance of the Shares (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option.  The Shares shall be
issued to the Optionee as soon as practicable after the Option is
exercised.  No adjustment shall be made for a dividend or other right
for which the record date is prior to the date of issuance except as provided in
Section 5.3 of the Plan.

    

    5.          
 Tax
Consultation.  Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares.  Optionee represents that Optionee has consulted with any
tax consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.  The Company specifically disavows any tax advice
stemming from any information which it may provide Optionee.

    

    6.         
  Restrictive Legends and
Stop-Transfer Orders.

    

    (a)           Legends.  Optionee
understands and agrees that the Company shall cause the legends set forth below
or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:

    

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE
OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
THEREWITH.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS
SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER.  SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES.

    

    (b)           Stop-Transfer
Notices.  Optionee agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue appropriate
"stop transfer" instructions to its transfer agent, if any, and that, if the
Company  transfers its own securities, it may make appropriate
notations to the same effect in its own records.

    

    (c)           Refusal to
Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

    

    7.          Successors and
Assigns.  The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company.  Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
Optionee and his or her heirs, executors, administrators, successors and
assigns.

    

    8.          Interpretation.  Any
dispute regarding the interpretation of this Agreement shall be submitted by
Optionee or by the Company forthwith to the Committee which shall review such
dispute at its next regular meeting.  The resolution of such a dispute
by the Committee shall be final and binding on all parties.

    

    9.          Governing Law;
Severability.  This Agreement is governed by the internal
substantive laws but not the choice of law rules, of Delaware.

     

    10.        Entire
Agreement.  The Plan and Option Agreement are incorporated
herein by reference.  This Agreement, the Plan, the Option Agreement
and the Investment Representation Statement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                Submitted
      by:

                                              	 
      	
                                                Accepted
      by:

                                              	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	
                                                Neuralstem,
      Inc.

                                              	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	 
      
	
                                                Signature

                                              	 
      	 
      	
                                                By

                                              	 
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	  
	 
      	 
      	 
      	
                                                Title

                                              	 

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Address:

                                	 
      	 
      	
                                  Address:

                                	  
	 
      	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
      	  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                                  Date
      Received

                                	 

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
B

    

    INVESTMENT
REPRESENTATION STATEMENT

    

    
      	
              OPTIONEE: 

            	
              [       ]

            

    

    

    
      	
              COMPANY: 

            	
              Neuralstem,
      Inc.

            

    

    

    
      	
              SECURITY:

            	
              Common
      Stock

            

    

    

    
      	
              AMOUNT:

            	
                  
      

            

    

    

    
      	
              DATE:

            	
                 
      

            

    

    

    In
connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:

    

    (a)           Optionee
is aware of the Company's business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities.  Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").

    

    (b)           Optionee
acknowledges and understands that the Securities constitute "restricted
securities" under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption there from, which exemption
depends upon, among other things, the bona fide nature of Optionee's investment
intent as expressed herein.  In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the
future.  Optionee further understands that the Securities must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available.  Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities.  Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, and any other legend
required under applicable state securities laws.

    

    (c)           Optionee
is familiar with the provisions of Rule 144, each promulgated under the
Securities Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly from the issuer thereof, in a
non-public offering subject to the satisfaction of certain
conditions.  For so long as the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Securities may be resold, subject to the satisfaction of certain of the
conditions specified by Rule 144.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (d)           Optionee
further understands that in the event all of the applicable requirements of
Rule  144 are not satisfied, registration under the Securities Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rules 144 is not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own
risk.  Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.

    

    
      
        
          
            
              	 
      	
                      Signature
      of Optionee:

                    	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                      Date:__________________________,
      19___

                    	 
      

            

          

        

      

    

     

    
      
         

      

      
        -2-Unassociated Document

     

    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.

    

    
      
         

      

      
        Page 1 of
6

        
          

        

      

      
         

      

    

     

    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;

    

    
      
         

      

      
        Page 2 of
6

        
          

        

      

      
         

      

    

    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:

    

    6.2.1   The 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:

    

    6.2.2   The 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, 2010

              
	 	 	 
	and	 	 

      

    

     

    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.

    

    
      
         

      

      
        Page 3 of
6

        
          

        

      

      
         

      

    

     

    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.

    

    
      
         

      

      
        Page 4 of
6

        
          

        

      

      
         

      

    

     

    14.  Effective
immediately, Section 6.3.16 of the AGREEMENT is amended to read as
follows:

    

    6.3.16   BORROWER 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.

    

    
      
         

      

      
        Page 5 of
6

        
          

        

      

      
         

      

    

     

    IN
WITNESS whereof the parties set their hands as of the date first written
above.

     

    
      
        	      
                First
      National Bank of Omaha

              	 	      
                Red
      Trail Energy, LLC

              	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
                /s/
      Andrew Wong

              	 	By:	
                /s/
      Frank Kirschenheiter

              	 
	 	
                Andrew
      Wong

              	 	Name:	
                Frank
      Kirschenheiter

              	 
	 	
                Commercial
      Loan Officer 

              	 	Title:	
                Treasurer

              	 
	 	 	 	 	 	 
	 	 	 	And	 	 
	 	 	 	 	 	 
	 	 	 	By:
      	/s/
      Jody Hoff	 
	 	 	 	Name:	Jody
      Hoff	 
	 	 	 	Title:	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
      Hoff	 
	 	 	Notary
      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
      Hoff	 
	 	 	Notary
      Public	 

        

         

        
          
             

          

          
            Page 6 of
6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]