ENGAGEMENT
      LOAN PROPOSAL AGREEMENT

    


    THIS
      AGREEMENT, made and entered into this 4th
      day of
October,
      2007,
      by and
      between, Southern
      Iowa Bioenergy, LLC,
      and, or
      their assigns, with their office located at 115
      South Linden Street, Lamoni, Iowa 50140,
      (hereinafter referred to as “Borrower”) and Commercial
      Property Lenders, Inc.,
      (hereinafter referred to as “Company”) with its’ office at 6065
      Roswell Road, Suite 3110, Atlanta, Georgia 30328.

    


    WITNESSETH

    


    For
      and
      in consideration of the promises set forth herein and other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

    


    
      	
              1.

            	
              Borrower
                hereby grants to Company for a period of 120 days,
                beginning on the 18th
                day of October 2007,
                or
                60
                days after the last requested pertinent information has been received
                by
                Company, the right and authority to secure a loan permanent commitment
                to
                finance the property described herein as Exhibit “A”. This non-exclusive
                right & authority to secure said commitment shall automatically renew
                for an additional 30
                days upon completion of the initial term unless canceled by Borrower
                by
                written notice to Company ten (10) days prior to the date of automatic
                renewal. 

            
	
              2.

            	
              Company
                shall provide one or more acceptable loan commitment letters for
                a loan
                amount of $30,000,000 that
                is outlined in Exhibit “B”. 

            
	
              3.

            	
              In
                the event that the Company provides Borrower with one or more permanent
                loan commitments with the terms in accordance with Exhibit
                “B”
                attached, Borrower does hereby agree to pay Company a fee equal to
                2.0
                %
                of
                the loan amount (i.e. loan amount of $30,000,000
                borrower to pay company $600,000.
                This fee is payable to the company at time of loan closing, as outlined
                in
                Exhibit
                “B”. 

            
	
              4.

            	
              Borrower
                also agrees that upon the execution of this agreement Borrower shall
                make
                an initial deposit of $1.00
                to
                cover the cost of the initial credit reports, site visit, and the
                cost of
                reviewing the financial data as supplied by Borrower to determine
                the
                viability of the loan request. This sum is not refundable. In addition
                upon execution of this agreement Borrower shall make a good faith
                deposit
                with Company in the amount of $30,000
                upon the execution of this Agreement.
                This good faith deposit is 100%
                refundable
                to
                Borrower within thirty (30) days after the term of this agreement
                provided
                the Company cannot supply the loan terms and conditions as specified
                in
                Exhibit
                “B”
                or
                other terms and conditions that are acceptable by Borrower. In the
                event
                the loan closes this good faith deposit will be credited towards
                the fee
                owed to Company at closing. If Borrower in any way defaults under
                the
                obligations of this agreement, Borrower agrees to pay Company as
                liquidated damages a fee of $30,000.
                If Borrower defaults on this agreement the $30,000
                good faith deposit will be credited to the $30,000 
                fee
                that borrower hereby agrees to pay Company. In the event that Company
                is
                forced to engage any third party to enforce this agreement, Borrower
                agrees to reimburse Company for any reasonable attorney and collection
                fees. Borrower shall be in default of this agreement if Company obtains
                a
                loan commitment as outlined in exhibit “B”(1) If Borrower elects not to
                close the proposed loan as outlined in Paragraph 2 & Exhibit “B” (2)
                fraud, bankruptcy: or (3) if borrower secures other financing for
                the
                Exhibit “A” property during the term of this agreement (4) if Borrower
                refuses to assist and fully cooperate with the underwriting process
                or
                provide any requested information (5) if Borrower cannot provide
                title to
                the subject property or the required equity.
                

            


    

     

    
      	
              5.

            	
              For
                the purposes of determining whether Company shall be deemed to have
                earned
                or be entitled to a commission hereunder, the term “Borrower” shall
                include
                such persons or entity, their respective family members and affiliates
                or
                other
                entities over which they may exercise control.

            
	 	 
	
              6.

            	
              Borrower
                hereby hires Commercial Property Lenders, Inc. to act on behalf of
                Borrower to provide a permanent loan commitment letter.

            
	 	 
	
              7.

            	
              This
                Agreement shall be construed and enforced in accordance with the
                Laws of
                The State of Georgia an shall be enforceable by additional reasonable
                legal fees and court cost to bind and inure to the benefit of Borrower
                and
                Company and their respective heirs, executors, successors and
                assigns.

            
	 	 
	
              8.
                

            	
              It
                is also understood that if Borrower cannot break escrow because of
                equity
                shortage or cannot obtain its amended S.E.C. offering memorandum
                for any
                reason this Agreement will terminate. And any and all deposits that
                have
                been collected by Company will be refunded per this
                Agreement.

            
	 	 
	 	IN WITNESS
              WHEREOF,
              Borrower and Company have caused this Agreement to be duly executed
              in
              their respective names as of this day and year first above written,
              and
              executed counterparts hereof have been furnished to Borrower and
              Company


    

     

     

    
      	 	 	 	 
	
              William
                T. Higdon

            	 	 	
              10-18-07

            
	
              
                

              

              Borrower

            	 	 	
              
                

              

              Date

            


    

    
       

      
        	 	 	 	 
	
                /s/
                  Lynn Knox

              	 	 	
                10-18-07

              
	
                
                  

                

                Company

              	 	 	
                
                  

                

                Date

              


      

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



    
      	
              EXHIBIT
                A

            
	 	 	 
	
               

            	
              A
                proposed 40 million gallon per year Bio Diesel facility to be located
                in
                Osceola, Iowa.

            
	 	 	 
	
              EXHIBIT
                “B”

            
	 	 	 
	
            	
              The
                proposed loan shall be to construct a 40 million gallon per year
                Bio
                Diesel production facility, and a second loan will provide the working
                capital for the facility. A USDA Business & Industry, 60% Guaranty
                Loan Program will be used as a guaranty for this financing. The USDA
                loan
                amount shall be for $25,000,000 or a lesser amount acceptable to
                Borrower.
                A second loan to be used for working capital shall be in the amount
                of
                $5,000,000

            
	
              LOAN
                “A”

            	 	 
	 	
              Loan
                Amount:

            	
              $25,000,000

            
	 	 	 
	 	
              Loan
                Type:

            	
              Construction/Perm

            
	 	 	 
	 	
              Credit
                Enhanced:

            	
              60%
                USDA Guaranty 

            
	 	 	 
	 	
              Loan
                Term:

            	
              30
                years (or up to 90% of economic life)

            
	 	 	 
	 	
              Loan
                Amortization:

            	
              30
                years (or up to 90% of economic life)

            
	 	
               

            	
              Interest
                only during construction (until facility has been
                commissioned)

            
	 	 	 
	 	
              Loan
                Assumable:

            	
              Yes

            
	 	 	 
	 	
              Guaranty
                Fee:

            	
              2%
                of the Guaranty Amount

            
	 	 	 
	 	
              Origination
                Fee:

            	
              2%
                payable to CPL

            
	 	 	 
	 	
              Construction
                Loan:

            	
              1%

            
	 	 	 
	 	
              Interest
                Rate:

            	
              Rate
                to be a floating rate Prime Rate+ 2.00% to be 

              adjusting
                on a quarterly basis

            
	 	 	 
	
            	
              
                Prepayment
                  Penalty:

              

            	
              5%
                1st yr./4% 4th yr./ 3%3rd 

              yr./2%
                4th yr./1% 5thyr./
                0% thereafter 

              Borrower
                will be allowed to prepay up to 10% of 

              the
                principal per year without a penalty.

            
	 	 	 
	
              LOAN
                “B” 

            	 	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              Loan
                Amount:

            	
              $5,000,000

            
	 	 	 
	 	
              Loan
                Type:

            	
              Revolving
                Working Capital

            
	 	 	 
	 	
              Loan
                Term:

            	
              10
                years

            
	 	 	 
	 	
              Advance
                Rate:

            	
              70%
                Finished Goods

              80%
                Accounts Receivables

              50%
                On Work in Process & Raw Goods

            
	 	 	 
	 	
              Interest
                Rate:

            	
              1%-1.25%
                Per Month On Outstanding Balance

            
	 	 	 
	 	
              Lender
                Fees:

            	
              2%
                of Line Amount

            
	 	 	 
	 	
              CPL
                Fees:

            	
              2%
                of Line Amount

            
	 	 	 
	
              Plus
                normal third party reports and other closing cost.

            
	 	 	 
	
              Note:
                The above mentioned loan terms and conditions are merely an outline
                of the
                proposed loan. The final commitment may or may not contain other
                specific
                verbiage.