Document:

SOUTHERN
                  IOWA BIOENERGY, LLC

                115
                  S. LINDEN

                LAMONI,
                  IA 50140

                 

                 

                BORROWER'S
                  NAME AND ADDRESS

                "I"
                  includes each borrower above, jointly and severally.

              	 	
                AMERICAN
                  STATE BANK-OSCEOLA

                P.O.
                  BOX 463

                OSCEOLA,
                  IA 50213

                 

                 

                LENDER'S
                  NAME AND ADDRESS

                "You"
                  means the lender, its successors and assigns.

              	 	
                PORT
                  # 115150

                 

                Loan
                  No. 287713

                Date
                  07-28-2008

                Maturity
                  Date 10-26-2008

                Loan
                  Amount $ 15,040.00

                Renewal
                  of _________________

              

      

      

      For
        value
        received, I promise to pay to you, or your order, at your address listed
        above
        the PRINCIPAL
        sum of
FIFTEEN
        THOUSAND FORTY AND 00/100
        Dollars $15,040.00.

      
        	x	
                Single
                  Advance:
                  I
                  will receive all of this principal sum on  07-28-2008 .
                  No additional advances are contemplated under this note.
                  

              

      

      
        	 ̈	
                Multiple
                  Advance:
                  The principal sum shown above is the maximum amount of principal
                  I can
                  borrow under this note. On______________   

              

      

      I
        will
        receive the amount of $  and
        future principal advances are contemplated. 

      Conditions: The conditions for future advances are ____________________________________________________________________________________________________________________________________

       

        
          

        

      

       

        
          

        

      

       ̈ Open
        End Credit:
        You and
        I agree that I may borrow up to the maximum amount of principal more than
        one
        time. This feature is subject to all other conditions and expires on
02-16-2008   .
        

       ̈ Closed
        End Credit:
        You and
        I agree that I may borrow up to the maximum only one time (and subject to
        all
        other conditions). 

      INTEREST:
        I agree
        to pay interest on the outstanding principal balance from 07-28-2008
        at
        the
        rate of  6.433
        % per
        year until 08-28-2008.
        

      
        	x	
                Variable
                  Rate:
                  This rate may then change as stated
                  below.

              

      

      x Index
        Rate:
        The
        future rate will be 1.750
        PERCENT BELOW
        the
        following index rate: AMERICAN
        STATE BANK'S VARIABLE INDEX RATE.

       ̈ No
        Index:
        The
        future rate will not be subject to any internal or external index. It will
        be
        entirely in your control. 

      x Frequency
        and Timing:
        The rate
        on this note may change as often as EVERY
        30TH DAY BEGINNING 08-28-2008.

      A
        change
        in the interest rate will take effect AUGUST
        28, 2008.

      x Limitations:
        During
        the term of this loan, the applicable annual interest rate will not be more
        than
 12.433%
        or less
        than 5.000 %.
        The
        rate may not change more than _____________%
        each   .
        

      Effect
        of Variable Rate:
        A change
        in the interest rate will have the following effect on the payments:

       ̈
        The
        amount of each scheduled payment will change.  x
        The
        amount of the final payment will change.

       ̈____________________________________________________________________________________________________________________________________________________________________________.

      ACCRUAL
        METHOD:
        Interest
        will be calculated on a ACTUAL/360basis.
        

      POST
        MATURITY RATE:
        I agree
        to pay interest on the unpaid balance of this note owing after maturity,
        and
        until paid in full, as stated below: 

      x
        on the
        same fixed or variable rate basis in effect before maturity (as indicated
        above).

       ̈
        at a
        rate equal
        to __________________________________________________________________________.

      
        	x	
                LATE
                  CHARGE:
                  If
                  a payment is made more than 10days
                  after it is due, I agree to pay a late charge of 1.500%
                  OF THE LATE
                  AMOUNT WITH A MIN OF $15.00 AND A MAX OF $50.00.

              

      

      
        	x	
                ADDITIONAL
                  CHARGES:
                  In
                  addition to interest, I agree to pay the following charges which
                  x
                  are  ̈
                  are not included in the principal amount above:            
                  

              

      

      PAYMENTS:
        I agree
        to pay this note as follows: 

      1
        PAYMENT OF $15,281,88 ON 10-26-2008. THIS IS A VARIABLE RATE LOAN AND THE
        FINAL
        PAYMENT AMOUNT MAY CHANGE.

      

      
        	 ̈	
                Unpaid
                  Interest:
                  Any accrued interest not paid when due (whether due by reason of
                  a
                  schedule of payments or due because of Lender's demand) will become
                  part
                  of the principal thereafter, and will bear interest at the interest
                  rate
                  in effect from time to time as provided for in this
                  agreement.

              

      

      ADDITIONAL
        TERMS: AS NEEDED FOR OPERATING.

      

      
        	x	
                If
                  checked, this note is a credit agreement subject to Iowa Code § 535.17 and
                  the following notice is applicable to this note.
                  

              

      

      IMPORTANT:
        READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY
        BECAUSE ONLY THESE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR ORAL
        PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
        YOU MAY
        CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN
        AGREEMENT. 

      
        	
                 ̈ SECURITY:
                  This note is separately secured by (describe separate document
                  by type and
                  date): 

                 

                 

                 

                (This
                  section is for your internal use. Failure to list a separate security
                  document does not mean the agreement will not secure this
                  note.)

              	 	
                PURPOSE:
                  The purpose of this loan is OPERATING
                  EXPENSE

                _________________________________________________.

                SIGNATURES:
                  I AGREE TO THE TERMS OF THIS NOTE

                (INCLUDING
                  THOSE ON PAGE 2).
                  I
                  have received a copy on today's date.

                SOUTHERN
                  IOWA BIOENERGY

              

      

       

      
        
          	 	 	
                  /s/
                    Alan Elefson

                
	 	 	
                  ALAN
                    ELEFSON, TREASURER

                
	 	 	 
	
                  Signature
                    for Lender

                	 	
                  /s/
                    William Higdon

                
	 	 	
                  WILLIAM
                    HIGDON, PERSONALLY

                
	 	 	 
	 	 	
                  /s/
                    Jack
                    Cooley                                  /s/
                    J R. Cornett

                
	KEVIN
                  W.
                  KLEMESRUD, PRESIDENT 	 	
                  JACK
                    COOLEY, PERSONALLY; J.R. CORNETT, PERSONALLY

                
	 	 	 
	 	 	
                  /s/
                    William Morain

                
	 	 	
                  WILLIAM
                    MORAIN,
                    PERSONALLY

                

        

      

      
        
          
            (page
              1 of 2)

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      DEFINITIONS:
        As used
        on page 1, "x"
        means
        the terms that apply to this loan. "I," "me" or "my" means each Borrower
        who
        signs this note and each other person or legal entity (including guarantors,
        endorsers, and sureties) who agrees to pay this note (together referred to
        as
        "us"). "You" or "your" means the Lender and its successors and assigns.

      APPLICABLE
        LAW:
        The law
        of the state of Iowa will govern this note. Any term of this note which is
        contrary to applicable law will not be effective, unless the law permits
        you and
        me to agree to such a variation. If any provision of this agreement cannot
        be
        enforced according to its terms, this fact will not affect the enforceability
        of
        the remainder of this agreement. No modification of this agreement may be
        made
        without your express written consent. Time is of the essence in this agreement.
        

      COMMISSIONS
        OR OTHER REMUNERATION:
        I
        understand and agree that any insurance premiums paid to insurance companies
        as
        part of this note will involve money retained by you or paid back to you
        as
        commissions or other remuneration.

      In
        addition, I understand and agree that some other payments to third parties
        as
        part of this note may also involve money retained by you or paid back to
        you as
        commissions or other remuneration.

      PAYMENTS:
        Each
        payment I make on this note will first reduce the amount I owe you for charges
        which are neither interest nor principal. The remainder of each payment will
        then reduce accrued unpaid interest, and then unpaid principal. If you and
        I
        agree to a different application of payments, we will describe our agreement
        on
        this note. I may prepay a part of, or the entire balance of this loan without
        penalty, unless we specify to the contrary on this note. Any partial prepayment
        will not excuse or reduce any later scheduled payment until this note is
        paid in
        full (unless, when I make the prepayment, you and I agree in writing to the
        contrary).

      INTEREST:
        Interest
        accrues on the principal remaining unpaid from time to time, until paid in
        full.
        If I receive the principal in more than one advance, each advance will start
        to
        earn interest only when I receive the advance. The interest rate in effect
        on
        this note at any given time will apply to the entire principal advanced at
        that
        time. You and I may provide in this agreement for accrued interest not paid
        when
        due to be added to principal. Notwithstanding anything to the contrary, I
        do not
        agree to pay and you do not intend to charge any rate of interest that is
        higher
        than the maximum rate of interest you could charge under applicable law for
        the
        extension of credit that is agreed to here (either before or after maturity).
        If
        any notice of interest accrual is sent and is in error, we mutually agree
        to
        correct it, and if you actually collect more interest than allowed by law
        and
        this agreement, you agree to refund it to me.

      INDEX
        RATE:
        The
        index will serve only as a device for setting the rate on this note. You
        do not
        guarantee by selecting this index, or the margin, that the rate on this note
        will be the same rate you charge on any other loans or class of loans to
        me or
        other borrowers.

      ACCRUAL
        METHOD:
        The
        amount of interest that I will pay on this loan will be calculated using
        the
        interest rate and accrual method stated on page 1 of this note. For the purpose
        of interest calculation, the accrual method will determine the number of
        days in
        a year. If no accrual method is stated, then you may use any reasonable accrual
        method for calculating-interest.

      POST
        MATURITY RATE:
        For
        purposes of deciding when the "Post Maturity Rate" (shown on page 1) applies,
        the term "maturity" means the date of the last scheduled payment indicated
        on
        page 1 of this note or the date you accelerate payment on the note, whichever
        is
        earlier.

      SINGLE
        ADVANCE LOANS:
        If this
        is a single advance loan, you and I expect that you will make only one advance
        of principal. However, you may add other amounts to the principal if you
        make
        any payments described in the "PAYMENTS BY LENDER" paragraph below, or if
        we
        have, agreed that accrued interest not paid when due may be added to
        principal.

      MULTIPLE
        ADVANCE LOANS:
        If this
        is a multiple advance loan, you and I expect that you will make more than
        one
        advance of principal. If this is closed end credit, repaying a part of the
        principal will not entitle me to additional credit.

      PAYMENTS
        BY LENDER:
        If you
        are authorized to pay, on my behalf, charges I am obligated to pay (such
        as
        property insurance premiums), then you may treat those payments as advances
        and
        add them to the unpaid principal under this note, or you may demand immediate
        payment of the charges.

      SET-OFF:
        I agree
        that you may set off any amount due and payable under this note against any
        right I have to receive money from you.

      "Right
        to
        receive money from you" means:

      
        	
              	(1)	
                any
                  deposit account balance I have with
                  you;

              

      

      
        	
              	(2)	
                any
                  money owed to , me on an item presented to you or in your possession
                  for
                  collection or exchange; and

              

      

      
        	
              	(3)	
                any
                  repurchase agreement or other nondeposit
                  obligation.

              

      

      "Any
        amount due and payable under this note" means the total amount of which you
        are
        entitled to demand payment under the terms of this note at the time you set
        off.
        This total includes any balance the due date for which you properly accelerate
        under this note.

      If
        my
        right to receive money from you is also owned by someone who has not agreed
        to
        pay this note, your right of set-off will apply to my interest in the obligation
        and to any other amounts I could withdraw on my sole request or endorsement.
        Your right of set-off does not apply to an account or other obligation where
        my
        rights are only as a representative. It also does not apply to any Individual
        Retirement Account or other tax-deferred retirement account.

      You
        will
        not be liable for the dishonor of any check when the dishonor occurs because
        you
        set off this debt against any of my accounts. I agree to hold you harmless
        from
        any such claims arising as a result of your exercise of your right of set-off.
        

      REAL
        ESTATE OR RESIDENCE PROPERTY:
        If this
        note is secured by real estate or a residence that is personal property,
        the
        existence of a default and your remedies for such a default will be determined
        by applicable law, by the terms of any separate instrument creating the security
        interest and, to the extent not prohibited by law and not contrary to the
        terms
        of the separate security instrument, by the "Default" and "Remedies" paragraphs
        herein. 

      DEFAULT:
        I will
        be in default if any one or more of the following occur: (1) I fail to make
        a
        payment on time or in the amount due; (2) I fail to keep the property insured,
        if required; (3) I fail to pay, or keep any promise, on any debt or agreement
        I
        have with you; (4) any other creditor of mine attempts to collect any debt
        I owe
        him through court proceedings; (5) I die, am declared incompetent, make an
        assignment for the benefit of creditors, or become insolvent (either because
        my
        liabilities exceed my assets or I am unable to pay my debts as they become
        due);
        (6) I make any written statement or provide any financial information that
        is
        untrue or inaccurate at the time it was provided; (7) I do or fail to do
        something which causes you to believe that you will have difficulty collecting
        the amount I owe you; (8) any collateral securing this note is used in a
        manner
        or for a purpose which threatens confiscation by a legal authority; (9) I
        change
        my name or assume an additional name without first notifying you before making
        such a change; (10) I fail to plant, cultivate and harvest crops in due season;
        (11) any loan proceeds are used for a purpose that will contribute to excessive
        erosion of highly erodible land or to the conversion of wetlands to produce
        an
        agricultural commodity, as further explained in 7 C.F.R. Part 1940,
        Subpart G, Exhibit M.

      REMEDIES:
        Except
        as provided in the next paragraph, if this note is secured by agricultural
        land
        (as defined in Iowa Code § 172C.1) and I am in default on this note, you will
        give me notice of my right to cure. You may exercise your remedies only if
        I
        fail to cure my default within 45 days after you mail the notice (or 45 days
        after actual delivery if you use a means other than certified
        mail).

      A
        notice
        of right to cure is not necessary and you may immediately exercise your remedies
        if you have: a) given me the notice with respect to two prior defaults, b)
        you
        have given me the notice with respect to a default occurring within 12 months
        before the current default, or I voluntarily surrender the agricultural land
        and
        you accept it in full satisfaction of the debt.

      Subject
        to the above limitations and any limitations imposed by Iowa Code Chapter
        654A,
        if I am in default on this note you have, but are not limited to, the following
        remedies:

      
        	
              	(1)	
                You
                  may demand immediate payment of all I owe you under this note (principal,
                  accrued unpaid interest and other accrued
                  charges).

              

      

      
        	
              	(2)	
                You
                  may set off this debt against any right t have to the payment of
                  money
                  from you, subject to the terms of the set-off paragraph
                  herein.

              

      

      
        	
              	(3)	
                You
                  may demand security, additional security, or additional parties
                  to be
                  obligated to pay this note as a condition for not using any other
                  remedy.

              

      

      
        	
              	(4)	
                You
                  may refuse to make advances to me or allow purchases on credit
                  by
                  me.

              

      

      
        	
              	(5)	
                You
                  may use any remedy you have under state or federal
                  law.

              

      

      By
        selecting any one or more of these remedies you do not give up your right
        to
        later use any other remedy. By waiving your right to declare an event to
        be a
        default, you do not waive your right to later consider the event as a default
        if
        it continues or happens again.

      COLLECTION
        COSTS AND ATTORNEY'S FEES:
        I agree
        to pay all costs of collection, replevin or any other or similar type of
        cost if
        I am in default. In addition, if you hire an attorney to collect this note,
        I
        also agree to pay any fee you incur with such attorney plus court costs (except
        where prohibited by law). To the extent permitted by the United States
        Bankruptcy Code, I also agree to pay the reasonable attorney's fees and costs
        you incur to collect this debt as awarded by any court exercising jurisdiction
        under the Bankruptcy Code.

      WAIVER:
        I give
        up my rights to require you to do certain things. I will not require you
        to:

      
        	
              	(1)	
                demand
                  payment of amounts due
                  (presentment);

              

      

      
        	
              	(2)	
                obtain
                  official certification of nonpayment (protest);
                  or

              

      

      
        	
              	(3)	
                give
                  notice that amounts due have not been paid (notice of
                  dishonor).

              

      

      I
        waive
        any defenses I have based on suretyship or impairment of
        collateral.

      OBLIGATIONS
        INDEPENDENT:
        I
        understand that I must pay this note even if someone else has also agreed
        to pay
        it (by, for example, signing this form or a separate guarantee or endorsement).
        You may sue me alone, or anyone else who is obligated on this note, or any
        number of us together, to collect this note. You may do so without any notice
        that it has not been paid (notice of dishonor). You may without notice release
        any party to this agreement without releasing any other party. If you give
        up
        any of your rights, with or without notice, it will not affect my duty to
        pay
        this note. Any extension of new credit to any of us, or renewal of this note
        by
        all or less than all of us will not release me from my duty to pay it. (Of
        course, you are entitled to only one payment in full.) I agree that you may
        at
        your option extend this note or the debt represented by this note, or any
        portion of the note or debt, from time to time without limit or notice and
        for
        any term without affecting my liability for payment of the note. I will not
        assign my obligation under this agreement without your prior written approval.
        

      FINANCIAL
        INFORMATION:
        I agree
        to provide you, upon request, any financial statement or information you
        may
        deem necessary. I warrant that the financial statements and information I
        provide to you are or will be accurate, correct and complete. 

      NOTICE:
        Unless
        otherwise required by law, any notice to me shall be given by delivering
        it or
        by mailing it by first class mail addressed to me at my last known address.
        My
        current address is on page 1. I agree to inform you in writing of any change
        in
        my address. I will give any notice to you by mailing it first class to your
        address stated on page 1 of this agreement, or to any other address that
        you
        have designated. 

      CREDIT
        AGREEMENT:
        A
        "credit agreement" under Iowa Code § 535.17 means any contract made or acquired
        by a lender to loan money or extend credit for any purpose. A "credit agreement"
        does not mean a contract to extend credit by means of a credit card, or open
        end
        credit, or a home equity line of credit. 

      This
        note
        is not subject to Iowa Code § 535.17 if it is a "credit agreement" made
        primarily for a personal, family, or household purpose where the credit extended
        is twenty thousand dollars or less.

      
        	
                DATE
                  OF

                TRANSACTION

              	 	
                PRINCIPAL

                ADVANCE

              	 	
                BORROWER'S

                INITIALS

                (not
                  required)

              	 	
                PRINCIPAL

                PAYMENTS

              	 	
                PRINCIPAL

                BALANCE

              	 	
                INTEREST

                RATE

              	 	
                INTEREST

                PAYMENTS

              	 	
                INTEREST

                PAID

                THROUGH

              
	 	 	
                $

              	 	 	 	
                $

              	 	
                $

              	 	
                %

              	 	
                  $

              	 	 
	 	 	
                $

              	 	 	 	
                $

              	 	
                $

              	 	
                %

              	 	
                  $

              	 	 
	 	 	
                $

              	 	 	 	
                $

              	 	
                $

              	 	
                %

              	 	
                  $

              	 	 
	 	 	
                $

              	 	 	 	
                $

              	 	
                $

              	 	
                %

              	 	
                  $

              	 	 

      

      

        
          
            
              (page
                2 of 2)Principal

              $30,000

            	
              Loan
                Date

              08-20-2008

            	
              Maturity

              09-20-2008

            	
              Loan
                No.

              12210004964

            	
              Call/Coll

              1A2/102

            	
              Account

            	
              Officer

              JTH

            	
              Initials

            
	
               

              References
                in the boxes above are for Lender's use only and do not limit the
                applicability of this document to any particular loan or item.

              Any
                item above containing "***" has been omitted due to text length
                limitations.

            

    

     

    
      	
              Borrower:

            	
               Southern
                Iowa BioEnergy LLC

              115
                S Linden

              Lamoni,
                IA 50140

            	 	
              Lender:

            	
              Great
                Western Bank

              Leon

              111
                N. Main

              PO
                Box 171

              Leon,
                IA 50144

            

    

    
      
        

        
          

        

      

    

    

    
      
        	Principal
                Amount: $30,000.00 	
                Date
                  of Note: August 20,
                  2008

              

      

    

    

    PROMISE
      TO PAY. Southern Iowa BioEnergy LLC ("Borrower”) promises to pay to Great
      Western Bank ("Lender"), or order, in lawful money of the United States of
      America, the principal amount of Thirty Thousand & 00/100 Dollars
      ($30,000.00), together with interest on the unpaid principal balance from August
      20, 2008, calculated as described in the "INTEREST CALCULATION METHOD" paragraph
      using an interest rate of 8.740% per annum based on a year of 360 days, until
      paid in full. The interest rate may change under the terms and conditions of
      the
      "INTEREST AFTER DEFAULT” section.

    

    PAYMENT.
      Borrower will pay this loan in one principal payment of $30,000.00 plus interest
      on September 20, 2008. This payment due on September 20, 2008, will be for
      all
      principal and all accrued interest not yet paid. Unless otherwise agreed or
      required by applicable law, payments will be applied, first to any accrued
      unpaid interest; then to principal; then to any unpaid collection costs; and
      then to any late charges. Borrower will pay Lender at Lender's address shown
      above or at such other place as Lender may designate in
      writing.

    

    MAXIMUM
      INTEREST RATE. Under
      no
      circumstances will the interest rate on this Note exceed (except for any higher
      default rate shown below) the lesser of 21.000% per annum or the maximum rate
      allowed by applicable law.

    

    INTEREST
      CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that
      is, by applying the ratio of the interest rate over a year of 360 days,
      multiplied by the outstanding principal balance, multiplied by the actual number
      of days the principal balance is outstanding. All interest payable under this
      Note is computed using this method.

    

    PREPAYMENT
      PENALTY. Upon prepayment of this Note, Lender is entitled to the following
      prepayment penalty: A Refinance Penalty amounting to 1 (one) percent of the
      principal balance outstanding will be charged unless the loan is paid off
      through the sale of property securing the loan or upon refinancing the loan
      at
      GREAT WESTERN BANK. Except for the foregoing, Borrower may pay all or a portion
      of the amount owed earlier than it is due.
      Early
      payments will not, unless agreed to by Lender in writing, relieve Borrower
      of
      Borrower's obligation to continue to make payments under the payment schedule.
      Rather, early payments will reduce the principal balance due. Borrower agrees
      not to send Lender payments marked "paid in full", "without recourse", or
      similar language. If Borrower sends such a payment, Lender may accept it without
      losing any of Lender's rights under this Note, and Borrower will remain
      obligated, to pay any further amount owed to Lender. All written communications
      concerning disputed amounts, including any check or other payment instrument
      that indicates that the payment constitutes "payment in full" of the amount
      owed
      or that is tendered with other conditions or limitations or as full satisfaction
      of a disputed amount must be mailed or delivered to: Great Western Bank, Leon,
      111 N. Main, PO Box 171, Leon, IA 50144.

    

    LATE
      CHARGE.
      If a
      payment is 15 days or more late, Borrower will be charged $50.00.

    

    INTEREST
      AFTER DEFAULT.
      Upon
      default, including failure to pay upon final maturity, the interest rate on
      this
      Note shall be increased to 21.000% per annum based on a year of 360 days.
      However, in no event will the interest rate exceed the maximum interest rate
      limitations under applicable law.

    

    DEFAULT.
      Each of
      the following shall constitute an. event of default ("Event of Default") under
      this Note:

     

    Payment
      Default.
      Borrower fails to make any payment when due under this Note. 

    

    Other-Defaults.
      Borrower fails to comply with or to perform any other term, obligation, covenant
      or condition contained in this Note or in any of the related documents or to
      comply with or to perform any term, obligation, covenant or condition contained
      in any other agreement between Lender and Borrower. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Loan No. 12210004964

              	
                PROMISSORY
                  NOTE 

                (Continued)

              	
                Page 2

              

      

      
        

      

    

     

    False
      Statements.
      Any
      warranty, representation or statement made or furnished to Lender by Borrower
      or
      on Borrower's behalf under this Note or the related documents is false or
      misleading in any material respect, either now or at the time made or furnished
      or becomes false or misleading at any time thereafter.

    

    Death
      or Insolvency.
      The
      dissolution of Borrower (regardless of whether election to continue is made),
      any member withdraws from Borrower, or any other termination of Borrower's
      existence as a going business or the death of any member, the insolvency of
      Borrower, the appointment of a receiver or any part of Borrower's property,
      any
      assignment for the benefit of creditors, any type of creditor workout, or the
      commencement of any proceeding under any bankruptcy or insolvency laws by or
      against Borrower.

    

    Creditor
      or Forfeiture Proceedings.
      Commencement of foreclosure or forfeiture proceedings, whether by judicial
      proceeding, self-help, repossession or any other method, by any creditor of
      Borrower or by any governmental agency against any collateral securing the
      loan.
      This includes a garnishment of any of Borrower's accounts, including deposit
      accounts, with Lender. However, this Event of Default shall not apply if there
      is a good faith dispute by Borrower as to the validity or reasonableness of
      the
      claim which is the basis of the creditor or forfeiture proceeding and if
      Borrower gives Lender written notice of the creditor or forfeiture proceeding
      and deposits with Lender monies or a surety bond for the creditor or forfeiture
      proceeding, in an amount determined by Lender, in its sole discretion, as being
      an adequate reserve or bond for the dispute.

    

    Events
      Affecting Guarantor.
      Any of
      the preceding events occurs with respect to any guarantor, endorser, surety,
      or
      accommodation party of any of the indebtedness or any guarantor, endorser,
      surety, or accommodation party dies or becomes incompetent, or revokes or
      disputes the validity of, or liability under, any guaranty of the indebtedness
      evidenced by this Note.

    

    Adverse
      Change. A
      material adverse change occurs in Borrower's financial condition, or Lender
      believes the prospect of payment or performance of this Note is
      impaired.

    

    Cure
      Provisions.
      If any
      default, other than a default in payment is curable and if Borrower has not
      been
      given a notice of a breach of the same provision of this Note within the
      preceding twelve (12) months, it may be cured if Borrower, after receiving
      written notice from Lender demanding cure of such default: (1) cures the default
      within twenty (20) days; or (2) if the cure requires more than twenty (20)
      days,
      immediately initiates steps which Lender deems in Lender's sole discretion
      to be
      sufficient to cure the default and thereafter continues and completes all
      reasonable and necessary steps sufficient to produce compliance as soon as
      reasonably practical.

    

    LENDER'S
      RIGHTS.
      Upon
      default, Lender may declare the entire unpaid principal balance under this
      Note
      and all accrued unpaid interest immediately due, and then Borrower will pay
      that
      amount.

    

    ATTORNEYS'
      FEES; EXPENSES.
      Lender
      may hire or pay someone else to help collect this Note if Borrower does not
      pay.
      Borrower will pay Lender that amount. This includes, subject to any limits
      under
      applicable lave, Lender's attorneys' fees and Lender's legal expenses, whether
      or not there is a lawsuit, including without limitation all attorneys' fees
      and
      legal expenses for bankruptcy proceedings (including efforts to modify or vacate
      any automatic stay or injunction), and appeals. If not prohibited by applicable
      law, Borrower also will pay any court costs, in addition to all other sums
      provided by law. 

    

    GOVERNING
      LAW.
      This Note will be governed by federal law applicable to Lender and, to the
      extent not preempted by federal law, the laws of the State of Iowa without
      regard to its conflicts of law provisions. This Note has been accepted by Lender
      in the State of Iowa.

    

    RIGHT
      OF SETOFF.
      To the
      extent permitted by applicable law, Lender reserves a right of setoff in all
      Borrower's accounts with Lender (whether checking, savings, or some other
      account). This includes all accounts Borrower holds jointly with someone else
      and all accounts Borrower may open in the future. However, this does not include
      any IRA or Keogh accounts, or any trust accounts for which setoff would be
      prohibited by law. Borrower authorizes Lender, to the extent permitted by
      applicable law, to charge or setoff all sums owing on the indebtedness against
      any and all such accounts. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                Loan No. 12210004964

              	
                PROMISSORY
                  NOTE 

                (Continued)

              	
                Page 3

              

      

      
        

      

      
         

      

    

    COLLATERAL.
      Borrower acknowledges this Note is secured by Real Estate Mortgage dated 6-12-06
      and Real Estate Mortgage dated 8-20-2008 and Security Agreement dated 6-12-06
      siting the assignment of Pre-Construction Services Agreement and Personal
      Guaranties from Leon G Kessel, James R Cornett, Jack Cooley, William Douglas
      Morain and William T Higdon dated 6-12-2006.

    

    PURPOSE
      OF LOAN.
      The
      specific purpose of this loan is: Refinance Real Estate Contract with Fonda
      Brodsack.

    

    FINANCIAL
      STATEMENTS.
      Borrower agrees to furnish lender with such financial statements and other
      related information at such frequencies and in such detail as lender may
      reasonably request. Borrower agrees to furnish additional information and
      statements, lists of assets and liabilities, income statement, agings of
      receivables and payables, inventory schedules, budgets, forecasts, tax returns,
      and other reports with respect to borrowers financial condition and business
      operation as lender my request from time to time.

    

    SUCCESSOR
      INTERESTS.
      The
      terms of this Note shall be binding upon Borrower, and upon Borrower's heirs,
      personal representatives, successors and assigns, and shall inure to the benefit
      of Lender and its successors and assigns.

    

    GENERAL
      PROVISIONS.
      If any
      part of this Note cannot be enforced, this fact will not affect the rest of
      the
      Note. 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, 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. The obligations
      under this Note are joint and several.

    

    PRIOR
      TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS
      NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

    

    BORROWER
      ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER
      DOCUMENTS RELATING TO THIS DEBT.

    

    BORROWER:

    

    
      	
              Southern
                Iowa BioEnergy LLC 

               

            	 	 	 
	
              By:
                

            	
              /s/
                William T. Higdon  

            	 	
              By:
                

            	
              /s/
                Alan Elefson,

            
	 	
              William
                T. Higdon, President of Southern Iowa

              BioEnergy
                LLC

            	 	 	
              Alan
                Elefson, Treasurer of Southern Iowa BioEnergy
                LLC

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