FOURTH AMENDMENT TO CONSTRUCTION LOAN AGREEMENT

FOURTH AMENDMENT TO CONSTRUCTION LOAN AGREEMENT

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EXHIBIT 10.39

FOURTH AMENDMENT TO CONSTRUCTION LOAN AGREEMENT

This Fourth Amendment to Construction Loan Agreement is dated as of the 11^th day of December, 2007, 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. On April 16, 2007, pursuant to Section 2.5 of the AGREEMENT, BORROWER executed and delivered to BANK its VARIABLE RATE NOTE, in the principal amount of $17,605,870.00; its LONG TERM REVOLVING NOTE, in the principal amount of $10,000,000.00; and its FIXED RATE NOTE, in the principal amount of $27,605,870.00. BORROWER has requested BANK to permit the replacement of the VARIABLE RATE NOTE in order to reduce the amount of borrowed funds subject to variable rates and to increase the portion of the OBLIGATIONS represented by fixed rate financing. As the result, on execution of this amendment, BORROWER will deliver a replacement of the VARIABLE RATE NOTE, with such replacement having the principal amount of $6,777,887.23, and a new note (“2007 FIXED RATE NOTE”) having a principal amount of $10,000,000.00.

3. Effective immediately, Section 1.24 of the AGREEMENT is amended to read:

1.24 “LOAN TERMINATION DATE” means the earliest to occur of the following: (i) as to the REVOLVING NOTE, July 17, 2008, as to FIXED RATE NOTE, 2007 FIXED RATE NOTE, VARIABLE RATE NOTE and as to LONG TERM REVOLVING NOTE, April 16, 2012, (ii) the date the OBLIGATIONS are accelerated pursuant to this AGREEMENT, and (iii) the date BANK has received (a) notice in writing from BORROWER of BORROWER’s election to terminate this AGREEMENT and (b) indefeasible payment in full of the OBLIGATIONS.

4. Effective immediately, Section 2.5 of the AGREEMENT is amended to read:

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 (“TERM NOTES”), hereafter called “FIXED RATE NOTE”,“2007 FIXED RATE NOTE”, “VARIABLE RATE NOTE”, and “LONG TERM REVOLVING NOTE”, in form

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mutually acceptable to BANK and BORROWER. The 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 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;

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. All unpaid principal and accrued interest under the TERM LOANS shall be due and payable on LOAN TERMINATION DATE, if not sooner paid.

5. 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 this date.

6. Except as amended hereby the parties ratify and confirm as binding upon them all of the terms of the AGREEMENT.

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/ Xxxxxx Xxxx	By:	/s/ Xxxxx Xxxxxxxxxxxxxx

	Xxxxxx Xxxx
	Commercial Loan Officer	Name:	Xxxxx Xxxxxxxxxxxxxx


		Title:	Secretary


		And

		By:	/s/ Xxxx Xxxxxx


		Name:	Xxxx Xxxxxx


		Title:	Chairman

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On this 27 day of December, 2007, before me, the undersigned Notary Public, personally appeared SECRETARY, the Secretary 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/ Xxxxx Xxxx
Notary Public

On this 27 day of December, 2007, before me, the undersigned Notary Public, personally appeared Xxxx Xxxxxx, the 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/ Xxxxx Xxxx
Notary Public


		XXXXX XXXX Notary Public State of North Dakota My Commission Expires Oct. 21, 2011

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SCHEDULE “II” TO SWAP NOTE

AMORTIZATION SCHEDULE — U.S. RULE (NO COMPOUNDING), 360 DAY YEAR
Red Trail Energy Swap Note Principal Schedule for Payments

AMORTIZATION SCHEDULE — U.S. Rule (no compounding), 360 Day Year


			Beginning
	Date		Balance		Principal
Loan		12/11/2007		10,000,000.00

1		1/16/2008				285,183.83
2		4/16/2008				182,995.86
3		7/16/2008				186,511.41
4		10/16/2008				188,121.60
2008
Totals						842,812.70
5		1/16/2009				191,775.34
6		4/16/2009				199,285.44
7		7/16/2009				201,221.24
8		10/16/2009				203,278.78
2009
Totals						795,560.80

9		1/16/2010				207,226.90
10		4/16/2010				214,694.68
11		7/16/2010				217,097.72
12		10/16/2010				219,638.08
2010
Totals						858,657.38

13		1/16/2011				223,903.94
14		4/16/2011				231,326.03
15		7/16/2011				234,233.37
16		10/16/2011				237,294.85
2011
Totals						926,758.19

17		1/16/2012				241,903.64
18		4/16/2012				6,334,307.29
2012
Totals						6,576,210.93
Loan		12/11/2007		10,000,000.00

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STATE OF NORTH DAKOTA

COUNTY OF XXXXX