EXHIBIT "A"                 

                                     PROMISSORY NOTE


             Principal      Loan Date   Maturity    Loan No. Call Collateral
           $2,500,000.00               
                           Account        Officer     Initials
                                           ABC

           Borrower: Pioneer Railcorp (TIN:)
                      Alabama Railroad Co. (TIN:)
                      Mississippi Central Railroad Co. (TIN:)

                                     Lender: Citizens Bank and Trust Company
                                             Main office
                                             700 Jackson Street, P.O. Box 50
                                             Chillicothe, Missouri 64601

           Principal Amount $2,500,000      Interest Rate: 11%
                     Date of Note:

           PROMISE TO PAY PRINCIPAL AND INTEREST.  For value received,
           Pioneer Railcorp, an Iowa Corporation, Alabama Railroad Co., an
           Iowa Corporation, and Mississippi Central Railroad Co., a
           Mississippi Corporation, with its principal place of business at
           Holly Springs, Mississippi, ("Borrower"), promise to pay to the
           order of Citizens Bank and Trust Company, of Chillicothe,
           Missouri, ("Lender") the principal sum of Two Million Five
           Hundred Thousand  Dollars ($2,500,000), or the
           aggregate unpaid principal amount of all advances thereon,
           pursuant to a "Loan Agreement" of even date (the "Loan") all as
           follows, to-wit; The principal of any advance on the Loan of less
           than Two Hundred Fifty Thousand Dollars ($250,000)
           shall be paid in full upon the termination of the Loan Agreement.
           The principal of any advance on the Loan of Two Hundred Fifty
           Thousand  Dollars ($250,000) or more shall be
           amortized, with interest as hereinafter provided, over a seven
           (7) year period and paid monthly with interest, commencing one
           (1) month from the date of such advancement.

           Each advance shall bear interest at the initial rate of eleven
           percent (11%) per annum, adjustable quarterly to two and one-half
           percent (21/2%) over New York Prime, limited, however, to a one
           percent (1%) annual increase or decrease, provided, interest
           shall not be adjusted to exceed thirteen and one-half percent
           (13 1/2%) as a maximum rate nor to reduce below ten percent (10%)
           per annum.  Interest on any advance on the Loan of less than Two
           Hundred Fifty Thousand Dollars ($250,000) shall be
           payable upon termination of the Loan Agreement.  Interest on any
           advance on the Loan of Two Hundred Fifty Thousand and N01100
           Dollars ($250,000.00) or more shall be amortized with principal
           over a seven (7) year period and paid monthly with such amortized
           principal, commencing one (1) month from the date of such
           advancement.

           PREPAYMENT.  Borrower may pay without penalty all or a portion of
           the amount owed earlier than it is due.
           LATE CHARGE.  If a payment is 16 days or more late, Borrower will
           be charged 5.000% of the regularly scheduled payment.

           DEFAULT.  Borrower will be in default upon the occurrence of any
           Event of Default as provided in Section Seven of the Loan
           Agreement.

           LENDER'S RIGHTS.  Upon the occurrence of an Event of Default, or
           upon the occurrence of any event authorizing Lender to accelerate
           the full and complete payment of this Note, as provided in
           Section Seven of said Loan Agreement, Lender may exercise any or
           all of those remedies provided in said Section Seven of the Loan
           Agreement.

           DISHONORED ITEM FEE.  Borrower will pay a fee to Lender of $15.00
           if Borrower makes a payment on Borrower's loan and the check or
           pre-authorized charge with which Borrower pays is later
           dishonored.

           RIGHTS OF SETOFF.  Borrower grants to Lender a contractual
           possessory security interest in, and hereby assigns, conveys,
           delivers, pledges, and transfers to Lender all Borrower's right,
           title and interest in and to, Borrower's accounts with Lender
           (whether checking, savings, or some other account), including
           without limitation all accounts held jointly with someone else
           and all accounts Borrower may open in the future, excluding
           however all IRA, Keogh, and trust accounts.  Borrower authorizes
           Lender, to the extent permitted by applicable law, to charge or
           setoff all SUMS owing on this Note (except non-material amounts
           being negotiated in good faith) against any and all such accounts
           in the event of default and allowance of all applicable grace
           periods.

           LINE OF CREDIT.  This Note evidences a revolving line of credit.
           Advances under this Note may be requested by Borrower only as
           provided in the Loan Agreement.  All communications, instruction,
           or directions to Lender are to be directed to Lender's office
           shown above.  The following party or parties are authorized as
           provided in this paragraph to request advances under the line of
           credit until Lender receives from Borrower at Lender's address
           shown above written notice of revocation of their authority: GUY
           BRENKMAN.  Borrower agrees to be liable for all sums either: (a)
           advanced in accordance with the instructions of an authorized
           person or (b) credited to any of Borrower's accounts with Lender.
           The unpaid principal balance owing on this Note at any time may
           be evidenced by endorsements on this Note or by Lender's internal
           records.  Lender will have no obligation to advance funds under
           this Note if: (a) Borrower or any guarantor is in default under
           the terms of this Note or any agreement that Borrower or any
           guarantor has with Lender, including any agreement made in
           connection with the signing of this Note; (b) Borrower or any
           guarantor ceases doing business or is insolvent; (c) any
           guarantor seeks, claims or otherwise attempts to limit, modify or
           revoke such guarantor's guarantee of this Note or any other loan
           with Lender; (d) Borrower has applied funds provided pursuant to
           this Note for purposes other than those authorized by Lender; or
           (a) Lender in good faith deems itself insecure under this Note,
           the Loan Agreement, or any other agreement between Lender and
           Borrower.

           GENERAL PROVISIONS.  Lender may delay or forgo enforcing any of
           its rights or remedies under this Note without losing them.
           Borrower and any other person who signs, guarantees or endorses
           this Note, to the extent allowed by law, waive presentment,
           demand for payment, protest and notice of dishonor.  Upon any
           change in the terms of this Note, and unless otherwise expressly
           stated in writing, no party who signs this Note, whether as
           maker, guarantor, accommodation maker or endorser, shall be
           released from liability.  All such parties agree that Lender may
           renew or extend (repeatedly and for any length of time) this
           loan, or release any party or guarantor or collateral; or impair,
           fail to realize upon or perfect Lender's security interest in the
           collateral; and take any other action deemed necessary by Lender
           without the consent of or notice to anyone.  All such parties
           also agree that Lender may modify this loan without the consent
           of or notice to anyone other than the party with whom the
           modification is made.

           PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
           PROVISIONS OF THIS NOTE.  BORROWER AGREES TO THE TERMS OF THE
           NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

           ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
           FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
           EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE.  TO PROTECT YOU
           (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR
           DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE
           CONTAINED IN THIS WRITING AND THE LOAN AGREEMENT EXECUTED ON EVEN
           DATE, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE
           AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO
           MODIFY IT.

           Borrower:

           Pioneer Railcorp
           By: /s/ Guy Brenkman

           Its: CEO
                         
           Alabama Railroad Co.

           By: /s/ Guy Brenkman
           its: President

           Mississippi Central Railroad Co.

           By:/s/ Guy Brenkman
           Its: President

                                                EXHIBIT "B"

                            PLEDGE AGREEMENT AND ASSIGNMENT

                This Agreement, made and entered into this 8th day of
               March, 1996, by and between Citizens Bank and Trust
           Company, of Chillicothe, Missouri, hereinafter "LENDER", and
           Pioneer Railcorp, an Iowa Corporation, hereinafter "PLEDGOR".
                WITNESSETH:
                1. In order to induce LENDER to make certain financial
           accommodations to PLEDGOR and its subsidiaries, and to secure to
           LENDER repayment thereof in a timely manner, all as provided by
           the terms of that certain "Loan Agreement" dated March 8th, 1996,
           PLEDGOR hereby pledges, delivers over and assigns to LENDER
           as collateral security the following capital common shares of
           stock, to-wit:
               300,000shares of Alabama Railroad Co., an Iowa Corporation,
               1,100,000 shares of Mississippi Central Railroad Co., a
                  Mississippi Corporation.
                2.  If, with the consent of LENDER, PLEDGOR shall substitute
           or exchange other securities in place of those herein mentioned,
           all of the rights and privileges of LENDER and all of the
           obligations of PLEDGOR with respect to the certificates Of stock
           originally pledged or held as collateral hereunder shall be
           forthwith applicable to such substituted or exchanged securities.
                3. During the term of this Agreement, and provided that
           PLEDGOR is not in default hereof, PLEDGOR shall have the right to
           vote all stock pledged hereunder and LENDER shall execute due and
           timely proxies, If necessary, in favor of PLEDGOR for this
           purpose.
               4. In the event that during the term of this Agreement,
          subscription warrants or any other rights or options shall be
          issued in connection with said stock, such warrants, rights and
          options shall be immediately assigned by LENDER to PLEDGOR. if
          any of such warrants, rights or options are exercised by PLEDGOR,
          all new certificates of stock so acquired by PLEDGOR shall be
          immediately assigned to LENDER to be held under the terms hereof
          in the manner as the certificates of stock originally pledged
          under this Agreement.
               5. Upon occurrence of any default, as defined in the "Loan
          Agreement", or upon any occurrence resulting in acceleration of
          payment of any indebtedness due Lender by Pledgor, all
          indebtedness secured hereby shall, at the option of LENDER,
          become immediately due and payable, notwithstanding any credit or
          extension of time allowed, and LENDER shall thereupon have all of
          the rights and remedies granted in the "Loan Agreement".
          Compliance by LENDER with the provisions of any law prohibiting
          LENDER from selling evidences of debt under pledge is hereby
          expressly waived.
               6. This Agreement shall constitute a continuing agreement
          applying to any and all future, as well as existing, transactions
          between PLEDGOR and LENDER, and all powers, rights, privileges,
          obligations, and duties herein set forth shall apply to, inure to
          the benefit of, and be binding on the successors and assigns of

                                          
                                                                    
           the parties hereto, until terminated upon full payment of the

           indebtedness due LENDER by PLEDGOR.  Upon full payment of the

           Loan and termination of the Loan Agreement or any extension

           thereof, LENDER will appropriately release said shares and any

           other collateral.

                IN WITNESS WHEREOF, the Parties hereto have executed this

           Agreement to triplicate copies thereof, each of which shall be

           considered an original, the day and year first above written.

                                   Citizens Bank and Trust Company          

                                    By: /s/ Andy B. Coffelt, V.P.
                                        LENDER

                                    Pioneer Railcorp
                                    By:/s/ Guy Brenkman, CEO
                                        PLEDGOR      
                                     EXHIBIT "C"

                                 LIMITED STOCK POWER


                For value received, the undersigned (hereinafter "Borrower")

           hereby orders, assigns and transfers to Citizens Bank and Trust

           Company, of Chillicothe, Missouri (hereinafter "Lender")

           1,100,000 shares of Mississippi Central Railroad Co. capital stock,

           300,000 shares of Alabama Railroad Co. Outstanding

           in Borrower's name on the books of such corporation,

          represented by certificate no(s).2- Alabama Railroad Co., Number 1

          Mississippi Central Railroad Co.

         solely as security for the

           repayment of all indebtedness due or to be due Lender (the

           "Loan"), and as security for the performance and observance of

           all covenants and obligations of Borrower in connection

           therewith, all as evidenced and reflected by the following ("Loan

           Documents"):

                Note dated: March 8th, 1996

                Loan Agreement dated: March 8th, 1996

                Pledge agreement and assignment dated: March 8th, 1996



                Borrower hereby irrevocably constitutes and appoints Lender

           attorney-in-fact to transfer such stock on the books of said

           Corporation and to negotiate said stock in the event of a default

           of Borrower or specified under the Loan Documents or any

           extension or renewal thereof.

                IN WITNESS WHEREOF, Borrower has executed this Limited Stock

           Power this 8th day of March, 1996.


                                         Pioneercorp


                                         By: Guy L. Brenkman - CEO
                                             Borrower