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                          TRACK LEASE AGREEMENT 101696

         THIS AGREEMENT, made and entered into this 16th day of October, 1996,
by and between DAKOTA, MINNESOTA & EASTERN RAILROAD CORPORATION, hereinafter
called the "Company", and South Dakota Soybean Processors, hereinafter called
the "Industry".

WITNESSETH:

         WHEREAS: The Company, in consideration of the agreements of the Lessee
herein contained, hereby leases unto the Lessee, for a term of 12 months 1000
feet of track and land occupied thereby (hereinafter collectively called "Said
Track") situated at Volga, SD, shown by yellow coloring on the drawing dated
October 16, 1996, attached hereto and made a part hereof, said track extends
between points A and B on attached print.

         WHEREAS: The Company is willing that said track shall be maintained and
operated upon the terms and conditions herein set forth:

         THEREFORE, in consideration of the premises, it is hereby agreed
between the parties hereto as follows:

         1.       Lessee agrees to pay the Company, as rent the sum of Two
                  Thousand Five Hundred Dollars and no/100 ($2500) which shall
                  be billed by the Company in advance on the first effective
                  date of this Agreement and on the same date of every year
                  thereafter, subject to revision at anniversary date.

         2.       The Company shall bear the cost and expense of all maintenance
                  of that part of said track maintenance shall include any and
                  all repairs, additions, betterments and the removal of snow,
                  ice, vegetation or any other obstructions therefrom. The
                  necessity of such maintenance shall be determined by the
                  Company. Also, the Company shall determine who (being Company
                  and/or contract forces) shall do said maintenance.

         3.       It is agreed by the Lessee, the said track shall be used and
                  occupied as a site for storage, loading, and/or unloading of
                  cars containing soybeans, soybean meal and oil with the use of
                  whatever devices necessary, and the Lessee forever indemnifies
                  the Company against and agrees to save it harmless from any
                  and all liability whatsoever for loss and damage to any
                  property whatsoever, and injury to or death of any person or
                  persons whomsoever, including all cost and expenses incident
                  thereto, however, arising from or in connection with the
                  existence, construction maintenance, repair, renewal, or
                  reconstruction, operation, use or removal of equipment or any
                  unit thereof, or any defect therein or failure thereof, or the
                  failure of the Lessee or its' employees or agents to abide by
                  or comply with any of the provisions of this Lease.

         4.       All cars delivered to Lessee on said track shall be deemed to
                  have been delivered as soon as the car or cars have been
                  placed on said track and detached from the

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                  engine or train by which it is moved. The Lessee agrees to
                  assume all risk, responsibility and liability for costs or
                  rerailing or loss or damage to said cars, from any cause
                  whatsoever, from the time of delivery of said cars until said
                  cars are attached to engine or train by which they are moved.

         5.       Upon the expiration of any termination hereof, Lessee shall
                  surrender the use and possession of said track to Company in
                  as good condition as it is on the date hereof.

         6.       This Lease shall be binding upon the heirs, executors,
                  administrators, successors and assigns of the parties hereto.

         7.       The Industry shall not place, or permit to be placed, or to
                  remain, any equipment, material, structure, pole or other
                  obstruction, or any excavation within 8.5 feet on straight
                  track, or 9.5 feet on curved track, laterally of the center,
                  or within 23 feet vertically from the top of the rail of said
                  track.

         8.       The Company shall have the right to use said track, or any
                  extension thereof, for any and all purposes which do not
                  unreasonably interfere with service to the Industry.

         9.       The Industry shall be solely liable for all the consequences
                  of its sole negligence; the Company shall be solely liable for
                  all the consequences of its sole negligence; and both parties
                  shall share equally all of the consequences of their joint or
                  concurrent negligence.

         10.      The Company shall have the right at its' option, to terminate
                  this agreement discontinuing operation over said track, by
                  giving thirty (30) days notice in writing to the Industry.

         11.      The Industry shall not assign this Agreement, or any interest
                  therein, without the written consent of the Company.

         12.      The Industry agrees to move all railroad cars with on track
                  equipment only.

         13.      Addendum:

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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed this 17 day of September, 1996.

                                      DAKOTA, MINNESOTA & EASTERN
                                      RAILROAD CORPORATION

ATTEST:  /s/ Tim                      By:      /s/ Douglas G. Deberg
       --------------------              ---------------------------------------
        Office Engineer                        Chief Engineer

                                      SOUTH DAKOTA SOYBEAN PROCESSORS

ATTEST:  /s/ Connie Kelly             By:     /s/ Rodney Christianson
       ------------------                ---------------------------------------
              CFO                             CEO

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                  [Attached Drawing and Print Not Reproduced.]