PROMISSORY NOTE
 
$250,000.00
 
Dated: As of October 31, 2007
 

 
FOR VALUE RECEIVED, the undersigned, Universal Bioenergy North America, Inc., a
Nevada corporation ("Maker"), hereby promises to pay to the order of Mortensen
Financial Limited ("Holder") the principal sum of Two Hundred Fifty Hundred
Thousand Dollars ($250,000) (the “Principal Amount”), on or by December 31, 2008
(the "Maturity Date"), plus accrued and unpaid interest as set forth below.

1. Principal and interest shall be payable in lawful money of the United States
of America in immediately available funds, without any deduction, setoff or
counterclaim, at the address of Holder specified herein.

2. The unpaid principal amount and accrued interest of this Note shall become
immediately due and payable upon the Maturity Date. Principal and interest shall
be payable in lawful money of the United States of America in immediately
available funds, without any deduction, setoff or counterclaim, at the address
of Holder specified herein. This Note shall bear interest on the unpaid
principal amount hereof commencing on the date hereof at a rate of 6.5% per
annum. Upon the occurrence and during the continuance of an Event of Default,
interest shall accrue on the unpaid principal amount of this Note, from the date
of such default until the earlier of the date the principal sum is paid in full
or, if applicable, the date such default is cured, at the rate of 15% per annum
(but not higher than the applicable maximum rate provided by law). Accrued
interest on the outstanding principal amount of this Note shall be payable on
the Maturity Date, unless accelerated as a result of the occurrence of an Event
of Default as set forth below.

3. The principal amount of this Note may be prepaid, at the option of Maker, in
whole at any time, together with all accrued interest upon fifteen (15) days
prior written notice to Holder.

4. This Note, the Convertible Note and any ancillary documents entered into in
connection therewith, each as amended, extended or modified from time to time,
are referred to collectively herein as the "Transaction Documents".

5. The unpaid principal amount of this Note, the accrued interest thereon and
all other obligations of Maker hereunder and under the Convertible Promissory
Note of Maker in favor of Holder dated the same date (the "Convertible Note")
(collectively, the "Obligations"), at the option of Holder, shall become
immediately due and payable upon the occurrence of any of the following events
of default ("Events of Default"):

(a) Maker shall fail to use the proceeds of this Note solely for working capital
purposes including the purchase of raw materials for its manufacturing and
refining.
 
 
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(b) Maker shall fail to pay: (i) any principal or accrued interest under this
Note within fifteen (15) days after the Maturity Date; or (ii) any of the other
monetary obligations to be paid by it under this Note or any of the other
Transaction Documents within 10 days of the due date for payment of same.

(c) Maker shall default in the observance or performance of any material
agreements, covenants or conditions contained in this Note or in any other
document or instrument referred to herein or therein (except the failure to pay
monetary obligations) and fail to cure such default within 10 business days of
the date Maker obtains notice thereof whether from Holder or otherwise.

(d) Any present or future representation or warranty made by or on behalf of
Maker whether contained herein or in any of the other Transaction Documents
shall be false or incorrect in any material respect when such representation or
warranty is made.

(e) The occurrence of any of the following with respect to Maker: dissolution;
termination of existence; insolvency; business cessation; calling of a meeting
of creditors; appointment of a receiver for any property; assignment for the
benefit of creditors or admit in writing its inability to pay its debts as they
become due; voluntary commencement of any proceeding under any bankruptcy or
insolvency law; commencement of any involuntary proceeding under any bankruptcy
or insolvency law and if any such involuntary proceeding is not dismissed within
45 days or the relief requested is granted; entry of a court order which enjoins
or restrains the conduct of business in the ordinary course.

6. Maker shall reimburse Holder for all costs and expenses incurred by Holder
and shall pay the reasonable fees, disbursements and out of pocket expenses of
counsel to Holder in connection with the enforcement of Holder's rights
hereunder. Maker shall also pay any and all taxes (other than taxes on or
measured by net income of the holder of this Note) recording fees, filing
charges, search fees or similar items incurred or payable in connection with the
execution and delivery of this Note.

7. Maker waives demand, presentment, protest and notice of any kind and consents
to the release, surrender or substitution of any and all security or guarantees
for the obligations evidenced hereby or other indulgence with respect to this
Note, all without notice.

8. Maker shall indemnify, defend and save Holder harmless from and against any
and all claims, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees, disbursements and out of pocket
expenses) of any nature whatsoever which may be asserted against or incurred by
Holder arising out of or in any manner occasioned by or any failure by Maker to
perform any of its obligations hereunder or pursuant to the Transaction
Documents.

9. Maker agrees to do such further acts and to execute and deliver to Holder
such additional agreements, instruments and documents as Holder may reasonably
require or deem advisable to effectuate the purposes of this Note, or to confirm
to Holder its rights, powers and remedies under this Note.
 
 
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10. (a) Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered or transmitted personally by messenger, by
recognized overnight courier, telecopied or mailed (by registered or certified
mail, postage prepaid) as follows:

(i) If to Maker, one copy to:

Universal Bioenergy North America, Inc.
128 Biodiesel Drive
Nettleton, MS 38858

(ii) If to the Holder:

Mortensen Financial Limited,
[insert address]
 
(b) Each such notice or other communication shall be effective: (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in Section 10(a) (with confirmation of transmission received by the sender); or
(ii) if given by any other means, when received at the address specified in
Section 10(a). Any party by notice given in accordance with this Section 10 to
the other party may designate another address (or telecopier number) or person
for receipt of notices hereunder.
 
11. This Note contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements, written or oral,
with respect thereto.

12. This Note may be amended, superseded, cancelled, renewed or extended only by
a written instrument signed by Holder and Maker. Any provisions hereof may be
waived by a party but any such waiver must be in writing signed by such party
and any such waiver shall be effective only in the specific instance and for the
specific purpose for which given. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity.

13. This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada applicable to agreements made and to be performed
entirely within such State, without regard to the conflict of laws rules
thereof.

14. Maker irrevocably: (a) agrees that any suit, action or other legal
proceeding arising out of this Agreement may be brought in the courts of the
State of Nevada or the courts of the United States located in Nevada; (b)
consents to the jurisdiction of each court in any such suit, action or
proceeding; (c) waives any objection which it may have to the laying of venue of
any such suit, action or proceeding in any of such courts; (d) waives the right
to assert any counterclaim in any such suit, action and proceeding; and (e)
waives the right to a trial by jury in any such suit, action or other legal
proceeding.
 
 
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15. This Note and all of its provisions, rights and obligations shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives. Nothing herein express or implied
is intended or shall be construed to confer upon or to give anyone other than
the parties hereto and their respective heirs, legal representatives and
successors any rights or benefits under or by reason of this Agreement and no
other party shall have any right to enforce any of the provisions of this
Agreement.

16. If any provision of this Note for any reason shall be held to be illegal,
invalid or unenforceable, such illegality shall not affect any other provision
of this Note, but this Note shall be construed as if such illegal, invalid or
unenforceable provision had never been included herein.

IN WITNESS WHEREOF, the undersigned has executed this Secured Promissory Note as
of the date first written above.

ATTEST:
   
MAKER:
 
Universal Bioenergy North America, Inc.
   
___________/s/________________
By:_____________/s/_______________
 
Name:
James E. Earnest
 
Title:
President

 
 
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