Document:

EXHIBIT
      4.2

    

    SOUTHERN
      IOWA BIOENERGY LLC

    

    SUBSCRIPTION
      AGREEMENT

    

    Limited
      Liability Company Membership Units 

     

    $1,000.00
      per Unit

    

    Minimum
      Investment of 20 Units ($20,000)

    1
      Unit Increments Thereafter ($1,000)

    

    The
      undersigned subscriber (hereafter sometimes referred to as “you” or the
“Subscriber”), desiring to become a member of Southern Iowa BioEnergy LLC, an
      Iowa limited liability company, with its principal place of business at 115
      South Linden Street, Lamoni, Iowa (hereafter sometimes referred to as “we” or
“SIBE”), hereby subscribes for the purchase of the membership units of SIBE and
      agrees to pay the related purchase price identified below.

    

    A. SUBSCRIBER
      INFORMATION. Please
      print your individual or entity name and address. Joint subscribers should
      provide their respective names. Your name and address will be recorded exactly
      as printed below. 

    

    
      	
              1.

            	
              Subscriber’s
                Printed Name 

            	
              ________________________________________________________________

            
	
              2.

            	
              Title,
                if applicable:

            	
              
                ________________________________________________________________

              

            
	
              3.

            	
              Subscriber’s
                Address:

            	 
	 	
              Street
                

            	
              
                ________________________________________________________________

              

            
	 	
              City,
                State, Zip Code

            	
              
                ________________________________________________________________

              

            
	
              4.

            	
              Telephone:

            	
              
                ________________________________________________________________

              

            
	
              4.

            	
              E-mail
                Address:

            	
              
                ________________________________________________________________

              

            

    

    

    B. NUMBER
      OF UNITS PURCHASED. Indicate
      the number of units to be purchased. You
      must
      purchase at least 20 units. We presently have 2,172 units outstanding. The
      maximum number of units to be sold is 14,500. 

    
      
        	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              

         

      

    

    C. PURCHASE
      PRICE. Indicate
      the dollar amount of your investment (minimum investment is
      $20,000).

     

    
      
        	
                1.
                  Total Purchase Price

                ($1,000.00
                  Per Unit multiplied

                by
                  the number in box B above.)

              	
                =

              	
                2.
1st
                  Installment

                (10%
                  of the Total Purchase Price)

              	
                +

              	
                3.
                  2nd Installment

                (90%
                  of the Total Purchase Price)

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                =

              	
                 

              	
                +

              	
                 

              

      

       

      D. GENERAL
        INSTRUCTIONS FOR SUBSCRIBERS: 

    

     

    You
      should read the Prospectus dated [Effective
      Date] (the
      “Prospectus”) in its entirety, including exhibits, for a complete explanation of
      an investment in SIBE. To subscribe, you must:

    

    INSTRUCTIONS
      IF YOU ARE SUBSCRIBING PRIOR
      TO RELEASE OF FUNDS FROM ESCROW: If
      you
      are subscribing prior to the Company’s release of funds from escrow, you must
      follow Steps 1 through 5 below:

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    1. Complete
      all information required in this Subscription Agreement and date and sign the
      Subscription Agreement on page 8 and the Member Signature Page to our Amended
      And Restated Operating Agreement attached to this Subscription Agreement as
      EXHIBIT “A”.

    

    2. Immediately
      provide your personal (or business) check for the first installment of ten
      percent (10%) of your investment amount made payable to "Great Western Bank,
      escrow agent for Southern Iowa BioEnergy LLC”. You will determine this amount in
      box C.2 on page 1 of
      this
      Subscription Agreement.

    

    3. Execute
      the Promissory Note and Security Agreement on page 9 of
      this
      Subscription Agreement evidencing your commitment to pay the remaining ninety
      percent (90%) due for the Units and granting SIBE a security interest in your
      Units.

    

    4.
       Deliver
      each of the original executed documents referenced in numbered paragraphs 1
      and
      3 of these instructions, together with your personal or business check
      referenced in numbered paragraph 2 of these instructions to either of the
      following:

    

      
        	 	
                Southern
                  Iowa BioEnergy LLC

              	
                Great
                  Western Bank

              
	 	
                Attention:
                  William T. Higdon

              	
                Attention:
                  Trust Department

              
	 	
                115
                  South Linden Street

              	
                P.O.
                  Box 4070

              
	 	
                Lamoni,
                  IA 50140

              	
                Omaha,
                  NE 68107

              

      

       

    

    5. Within
      thirty (30) days of your receipt of written notice from SIBE stating that its
      sales of Units have exceeded the minimum offering amount of $9,000,000, you
      must
      deliver to SIBE at either of the addresses referenced in numbered paragraph
      4 of
      these instructions an additional personal (or business) check for the remaining
      ninety percent (90%) of your investment amount made payable to Great Western
      Bank, escrow agent for SIBE in satisfaction of your deferred payment obligations
      under the Promissory Note and Security Agreement. You will determine this amount
      in box C.3 on page 1 of
      this
      Subscription Agreement. If you fail to pay the second installment pursuant
      to
      the Promissory Note and Security Agreement, SIBE shall be entitled to retain
      your first installment and to seek other damages, as provided in the Promissory
      Note and Security Agreement.

    

    If
      you
      are subscribing prior to release of funds from escrow, your funds will be placed
      in SIBE’s escrow account at Great Western Bank. The funds will be released to
      SIBE or returned to you in accordance with the escrow arrangements described
      in
      the Prospectus. SIBE may, in its sole discretion, reject or accept any part
      or
      all of your subscription. If SIBE rejects your subscription, your Subscription
      Agreement and investment will be promptly returned to you, plus nominal
      interest, minus escrow fees. SIBE may not consider the acceptance or rejection
      of your subscription until a future date near the end of this
      offering.

    

    If
      you
      invest after we have received subscriptions for Units in excess of the
      $9,000,000 minimum but prior to the release of funds from escrow, 100% of the
      total Unit purchase price will be due immediately. This amount will be held
      in
      escrow until SIBE meets the requirements of the escrow agreement to release
      the
      funds from escrow.

    

    INSTRUCTIONS
      IF YOU ARE SUBSCRIBING AFTER
      RELEASE OF FUNDS FROM ESCROW: If
      you
      are subscribing after the Company’s release of funds from escrow, you must
      follow Steps 1 through 3 below:

    

    1. Complete
      all information required in this Subscription Agreement and date and sign the
      Subscription Agreement on page 8 and the Member Signature Page to our Amended
      And Restated Operating Agreement attached to this Subscription Agreement as
      EXHIBIT “A”.

    

    2. Immediately
      provide your personal (or business) check for the entire amount of your
      investment (as determined in Box C.1 on page 1) made payable to “Southern
      Iowa BioEnergy LLC.”

    

    3.
       Deliver
      the original executed documents referenced in Item 1 of these Instructions,
      together with your personal (or business) check referenced in numbered paragraph
      2 of these instructions to the following:

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    Southern
      Iowa BioEnergy LLC

    Attention:
      William T. Higdon 

    115
      South
      Linden Street

    Lamoni,
      Iowa 50140

    

    If
      you
      are subscribing after release of funds from escrow and we accept your
      investment, your funds will be immediately at-risk as described in the
      Prospectus. SIBE may, in its sole discretion, reject or accept any part or
      all
      of your subscription. If SIBE rejects your subscription, your Subscription
      Agreement and investment will be returned to you promptly, plus nominal
      interest, minus escrow fees as allowed by applicable law. SIBE may not consider
      the acceptance or rejection of your subscription until a future date near the
      end of this offering. 

    

    You
      may direct your questions to one of our directors listed below or to SIBE at
      641-784-3510

    

    
      	
              Director

            	 	
              Cell
                Number

            	 	
              Home
                Number

            
	
              William
                T. Higdon

            	 	
              515-360-0369

            	 	
              641-784-4944

            
	
              Alan
                Elefson

            	 	 	 	
              641-784-7355

            
	
              Randy
                Layton

            	 	
              641-442-5393

            	 	
              641-446-6686

            
	
              William
                D. Morain

            	 	
              641-442-5195

            	 	
              641-784-8186

            
	
              Leon
                Kessel

            	 	
              309-314-0299

            	 	
              641-784-7235

            
	
              J.R.
                Cornett

            	 	
              641-414-3391

            	 	
              641-442-3433

            
	
              Jack
                Cooley

            	 	
              641-414-3408

            	 	
              641-342-3597

            
	
              Scott
                Sunderman

            	 	 	 	
              712-542-4799

            

    

    

    E. Additional
      Subscriber Information. The
      subscriber, named above, certifies the following under penalties of
      perjury:

    

    
      	 	
              1.

            	
              Form
                of Ownership.
                Check the appropriate box (one only) to indicate form of ownership.
                If the
                subscriber is a Custodian, Corporation, Partnership or Trust, please
                provide the additional information requested.

            

    

    

    
      	 	
              o

            	
              Individual

            

    

    
      	 	
              
                o

              

            	
              Joint
                Tenants with Right of Survivorship (Both signatures must appear on
                Page
                8.)

            

    

    
      	 	
              
                o

              

            	
              Corporation,
                Limited Liability Company or Partnership (Corporate Resolutions,
                Operating
                Agreement or Partnership Agreement must be
                enclosed.)

            

    

    
      	 	
              
                o

              

            	
              Trust
                

            

      	 	 	    Trustee’s
              Name:
              __________________________________________ 

      	 	 	    Trust
              Date:
              ______________________________________________ 

      	 	
              o

            	Other:
              Provide detailed information in the space immediately
              below. 

      	 	 	__________________________________________________________ 

      	 	 	__________________________________________________________ 

      	 	 	__________________________________________________________ 

    

     

    
      	 	
              2.

            	
              Subscriber’s
                Taxpayer Information.
                Check the appropriate box if you are a non-resident alien, a U.S.
                Citizen
                residing outside the United States or subject to backup withholding.
                Trusts should provide their taxpayer identification number. Custodians
                should provide the minor’s Social Security Number. All individual
                subscribers should provide their Social Security Number. Other entities
                should provide their taxpayer identification
                number.

            

    

    

    
      	 	
              o

            	
              Check
                box if you are a non-resident alien

            

    

    
      	 	
              
                o

              

            	
              Check
                box if you are a U.S. citizen residing outside of the United
                States

            

    

    
      	 	
              
                o

              

            	
              Check
                this box if you are subject to backup
                withholding

            

    

    

      
        	 	
                Subscriber’s
                  Social Security No.

              	
                _____________________________

              
	 	
                Joint
                  Subscriber’s Social Security No.

              	
                _____________________________

              
	 	
                Taxpayer
                  Identification No.

              	
                _____________________________

              

      

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	 	
              3.

            	
              Member
                Report Address.
                If
                you would like duplicate copies of member reports sent to an address
                that
                is different than the address identified in Section A, please complete
                this section.

            

    

    
      
        

          
            	 	
                    Address:

                  	
                    _____________________________

                  
	 	 	
                    _____________________________

                  
	 	 	
                    _____________________________

                  

          

        

      

    

    
    

     

    
      	 	
              4.

            	
              State
                of Residence.

            

    

    

      
        	 	
                State
                  of Principal Residence:

              	
                _____________________________

              
	 	
                State
                  where driver’s license is issued:

              	
                _____________________________

              
	 	
                State
                  where resident income taxes are filed:

              	
                _____________________________

              
	 	 	 
	 	
                State(s)
                  in which you have maintained your principal residence during the
                  past
                  three years:

              

      

    

    
    

     

    
      	
               a

            	
               b.

            	
               c.

            

    

    

    
      	 	
              5.

            	
              Suitability
                Standards.
                You cannot invest in SIBE unless you meet one, or more, of the following
                suitability tests which are determined by your state of residence
                as set
                forth below. Please review the suitability tests and check the box(es)
                next to the following suitability test that you meet. For husbands
                and
                wives purchasing jointly, the tests below will be applied on a joint
                basis.

            

    

    

    
      	 	 	
              Alaska,
                Colorado, Illinois,
                Missouri

            

    

    

    
      	 	
              a. o 

            	
              I
                (We) have annual income from whatever source of at least $45,000
                and
                a
                net worth of at least $45,000, exclusive of home, furnishings and
                automobiles; or

            

    

    

    
      	 	
              b. o 

            	
              I
                (We) have a net worth of at least $100,000, exclusive of home, furnishings
                and automobiles. 

            

    

    

    Iowa

    

    
      	 	
              a. o 

            	
              I
                (We) have annual income from whatever source of at least $70,000
                and
                a
                net worth of at least $70,000, exclusive of home, furnishings and
                automobiles; or

            

    

    

    
      	 	
              b. o 

            	
              I
                (We) have a net worth of at least $250,000, exclusive of home, furnishings
                and automobiles. 

            

    

    

    Kansas

    

    Individuals

    

    
      	 	
              a. o 

            	
              The
                undersigned is an individual with a net worth, or a joint net worth
                together with his or her spouse, in excess of $1,000,000. (In calculating
                net worth, you may include equity in personal property and real estate,
                including your principal residence, cash, short-term investments,
                stock
                and securities. Equity in personal property and real estate should
                be
                based on the fair market value of such property minus debt secured
                by such
                property.)

            

    

    

    
      	 	
              b. o 

            	
              The
                undersigned is an individual that had an individual income in excess
                of
                $200,000, in each of the prior two years and reasonably expects an
                income
                in excess of $200,000 in the current year.

            

    

    

    
      	 	
              c. o 

            	
              The
                undersigned is an individual that had with his/her spouse joint income
                in
                excess of $300,000 in each of the prior two years and reasonably
                expects
                joint income in excess of $300,000 in the current
                year.

            

    

    
      	 	 	 

      	 	d.
              o	
              The
                undersigned is a director or executive officer or general partner
                (or its
                equivalent) of SIBE. 

            

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Entities

    

    
      	 	
              e. o 

            	
              The
                undersigned, if other than an individual, is an entity, including
                a
                revocable trust, all of whose equity owners/grantors meet one of
                the tests
                set forth in (a) through (d) above. (If relying on this category
                alone,
                each equity owner/grantor must complete a separate copy of this
                Subscription Agreement.)

            

    

    

    
      	 	
              f. o 

            	
              The
                undersigned is an entity, and is an “Accredited Investor” as defined in
                Rule 501 (a) of Regulation D under the Securities Act of 1933. This
                representation is based on the following (check one or more, as
                applicable):

            

    

    

      
        	 	
                (i)

              	
                o The
                  undersigned (or, in the case of a trust, the undersigned trustee)
                  is a
                  bank or savings and loan association as defined in Sections 3(a)(2)
                  and
                  3(a)(5)(A), respectively, of the Act acting either in its individual
                  or
                  fiduciary capacity.

              
	 	 	 
	 	
                (ii)

              	
                o The
                  undersigned is an
                  insurance company as defined in Section 2(13) of the Securities
                  Act of
                  1933.

              
	 	 	 
	 	
                (iii)

              	
                o The
                  undersigned is an
                  investment company registered under the Investment Company Act
                  of 1940 or
                  a business development company as defined in Section 2(a)(48) of
                  that
                  Act.

              
	 	 	 
	 	
                (iv)

              	
                o The
                  undersigned is a Small
                  Business Investment company licensed by the U.S. Small Business
                  Administration under Section 301(c) or (d) of the Small Business
                  Investment Act of 1958.

              
	 	 	 
	 	
                (v)

              	
                o The
                  undersigned is an
                  employee benefit plan within the meaning of Title I of the Employee
                  Retirement Income Security Act of 1974 and either (check one or
                  more, as
                  applicable):

              
	 	 	 
	 	 	 	
                (aa) o
                  the investment decision is made by a plan fiduciary, as defined
                  in Section
                  3(21) of such Act, which is either a bank, savings and loan association,
                  insurance company, or registered investment adviser; or

              
	 	 	 	 
	 	 	 	
                (bb) o
                  the employee benefit plan has total assets in excess of $5,000,000;
                  or

              
	 	 	 	 
	 	 	 	
                (cc) o
                  the plan is a self-directed plan with investment decisions made
                  solely by
                  persons who are “Accredited Investors” as defined under the Act;
                  or

              
	 	 	 	 
	 	 	 	
                (dd) o
                  all of the plan participants meet one of the tests set forth in
                  (a)
                  through (d) above.

              
	 	 	 	 
	 	
                (vi)

              	o The
                undersigned is an
                individual retirement account and the beneficiary is an accredited
                investor that meets one of the tests set forth in (a) through (d)
                above.
	 	 	 	 
	 	
                (vii)

              	o The
                undersigned is a private
                business development company as defined in Section 202(a)(22) of
                the
                Investment Advisors Act of 1940.
	 	 	 	 
	 	
                (viii)

              	o The
                undersigned has total
                assets in excess of $5,000,000, was not formed for the specific purpose
                of
                acquiring securities of SIBE and is one or more of the following
                (check
                one or more, as appropriate):
	 	 	 	 
	 	 	 	
                (aa) o
                  an
                  organization described in Section 501 (c)(3) of the Internal Revenue
                  Code;
                  or

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 	
                (bb) o
                  a
                  corporation; or

              
	 	 	 	 
	 	 	 	
                (cc) o
                  a
                  Massachusetts or similar business trust; or

              
	 	 	 	 
	 	 	 	
                (dd) o
                  a
                  partnership; or

              
	 	 	 	 
	 	 	 	
                (ee) o
                  a
                  limited liability company.

              
	 	 	 	 
	 	
                (ix)

              	
                o The
                  undersigned is a trust
                  with total assets exceeding $5,000,000, which was not formed for
                  the
                  specific purpose of acquiring securities of SIBE and whose purchase
                  is
                  directed by a person who has such knowledge and experience in financial
                  and business matters that he/she is capable of evaluating the merits
                  and
                  risks of the investment in the
                  Units.

              

      

       

    

    
      	 	
              6.

            	
              Subscriber’s
                Representations and Warranties.
                You must read and certify your representations and warranties and
                sign and
                date this Subscription Agreement. 

            

    

    

    By
      signing below the subscriber represents and warrants to SIBE that he, she or
      it:

    

    
      	 	
              a.

            	
              has
                received a copy of SIBE’s Prospectus dated [Effective
                Date] and
                all exhibits thereto;

            

    

    

    
      	 	
              b.

            	
              has
                been informed that the Units of SIBE are offered and sold in reliance
                upon: (i) a federal securities registration; (ii) Alaska, Colorado,
                Illinois, Iowa, Missouri and Kansas securities registrations; and
                (iii)
                exemptions from securities registrations in various other
                states;

            

    

    

    
      	 	
              c.

            	
              understands
                that the Units to be issued pursuant to this Subscription Agreement
                can
                only be sold to a person meeting requirements of
                suitability;

            

    

    

    
      	 	
              d.

            	
              has
                been informed that the Units to be issued pursuant to this Subscription
                Agreement have not been registered under the securities laws of any
                state
                other than the states of Alaska, Illinois, Iowa, Missouri, Kansas
                and
                Colorado, and that SIBE is relying in part upon the representations
                of the
                undersigned Subscriber contained
                herein;

            

    

    

    
      	 	
              e.

            	
              has
                been informed that the Units subscribed for have not been approved
                or
                disapproved by the Alaska, Illinois, Iowa, Missouri, Kansas or Colorado
                securities agencies or regulators or any other regulatory authority,
                nor
                has any regulatory authority passed upon the accuracy or adequacy
                of the
                Prospectus;

            

    

    

    
      	 	
              f.

            	
              intends
                to acquire the Units for his/her/its own account without a view to
                public
                distribution or resale and has no contract, undertaking, agreement
                or
                arrangement to sell or otherwise transfer or dispose of any Units
                or any
                portion thereof to any other
                person;

            

    

    

    
      	 	
              g.

            	
              understands
                that there is no present market for SIBE’s Units, that the Units will not
                trade on an exchange or automatic quotation system, that no such
                market is
                expected to develop in the future and that there are significant
                restrictions on the transferability of the Units;
                

            

    

    

    
      	 	
              h.

            	
              has
                been encouraged to rely upon the advice of his legal counsel and
                accountants or other financial advisers with respect to the tax and
                other
                considerations relating to the purchase of Units;
                

            

    

    

    
      	 	
              i.

            	
              has
                received a copy of SIBE’s Amended And Restated Operating Agreement, dated
                May 4, 2005, and understands that upon closing the escrow by SIBE,
                the
                Subscriber and the Units will be bound by the provisions of the Amended
                And Restated Operating Agreement, which contains, among other things,
                provisions that restrict the transfer of Units;

            

    

    

    
      	 	
              j.

            	
              understands
                that the Units are subject to substantial restrictions on transfer
                under
                state and federal securities laws in addition to the restrictions
                contained in SIBE’s Amended And Restated Operating Agreement, and agrees
                that if the Units or any part thereof are sold or distributed in
                the
                future, the Subscriber shall sell or distribute them only in strict
                accordance with the terms of SIBE’s Amended And Restated Operating
                Agreement, the requirements of the Securities Act of 1933, as amended,
                and
                applicable state securities
                laws;

            

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    
      	 	
              k.

            	
              meets
                the suitability test marked in numbered paragraph 5 above and is
                capable
                of bearing the economic risk of this investment, including the possible
                total loss of the investment;

            

    

    

    
      	 	
              l.

            	
              understands
                that SIBE will place a restrictive legend on any certificate representing
                Units containing substantially the following language as the same
                may be
                amended by SIBE’s Board of Directors in its sole
                discretion:

            

    

    

    THE
      TRANSFERABILITY OF THE MEMBERSHIP UNITS REPRESENTED BY THIS CERTIFICATE IS
      RESTRICTED. SUCH UNITS MAY NOT BE SOLD, ASSIGNED, OR TRANSFERRED, AND NO
      ASSIGNEE, VENDEE, TRANSFEREE OR ENDORSEE THEREOF WILL BE RECOGNIZED AS HAVING
      ACQUIRED ANY SUCH UNITS FOR ANY PURPOSES, UNLESS AND TO THE EXTENT SUCH SALE,
      TRANSFER, HYPOTHECATION, OR ASSIGNMENT IS PERMITTED BY, AND IS COMPLETED IN
      STRICT ACCORDANCE WITH, APPLICABLE FEDERAL AND STATE LAW AND THE TERMS AND
      CONDITIONS SET FORTH IN THE OPERATING AGREEMENT OF THE COMPANY, AS AMENDED
      FROM
      TIME TO TIME.

    

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED FOR SALE
      OR
      TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
      OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION IS EXEMPT FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE
      STATE SECURITIES LAWS.

    

    
      	 	
              m.

            	
              understands
                that, to enforce the above legend, SIBE may place a stop transfer
                order
                with its registrar and stock transfer agent (if any) covering all
                certificates representing any of the membership
                units;

            

    

    

    
      	 	
              n.

            	
              has
                sufficient knowledge and experience in business and financial matters
                so
                as to be able to evaluate the merits and risks of an investment in
                the
                Units, believes that the investment in Units is suitable for the
                Subscriber and that the Subscriber can bear the economic risk of
                the
                purchase of Units, including the total loss of the undersigned’s
                investment; 

            

    

    

    
      	 	
              o.

            	
              may
                not transfer or assign this Subscription Agreement, or any of the
                Subscriber’s interest herein; 

            

    

    

    
      	 	
              p.

            	
              has
                written his, her, or its correct taxpayer identification number under
                numbered paragraph E.2 of this Subscription Agreement;
                

            

    

    

    
      	 	
              q.

            	
              is
                not subject to back up withholding either because he, she or it has
                not
                been notified by the Internal Revenue Service (“IRS”) that he, she or it
                is subject to backup withholding as a result of a failure to report
                all
                interest or dividends, or the IRS has notified him, her or it that
                he is
                no longer subject to backup withholding (Note this clause (q) should
                be
                crossed out if the backup withholding box in numbered paragraph E.2
                is
                checked); 

            

    

    

    
      	 	
              r.

            	
              understands
                that execution of the attached Promissory Note and Security Agreement
                will
                allow SIBE and its successors and assigns to pursue the Subscriber
                for
                payment of the amount due thereon by any legal means, including,
                but not
                limited to, acquisition of a judgment against the Subscriber in the
                event
                that the Subscriber defaults on the Promissory Note and Security
                Agreement; and

            

    

    

    
      	 	
              s.

            	
              acknowledges
                that SIBE may retain possession of certificates representing the
                Subscriber’s Units to perfect its security interest in those
                Units.

            

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    Signature
      of Subscriber/ Joint Subscriber: 

    

    Date:  _______________________________

    

    
      	
              Individuals:

            	 	
              Entities:

            
	 	 	 
	 	 	 
	 	 	 
	
                  Name
                of
                Individual Subscriber (Please Print)

            	 	
              Name
                of Entity (Please Print)

            
	 	 	 
	 	 	 
	 	 	 
	
                  Signature
                of
                Individual

            	 	
              Print
                Name and Title of Officer

            
	 	 	 
	 	 	 
	 	 	 
	
                  Name
                of
                Joint Individual Subscriber (Please Print)

            	 	
              Signature
                of Officer

            
	 	 	 
	 	 	 
	 	 	 
	
                  Signature
                of
                Joint Individual Subscriber

            	 	 

    

     

    ACCEPTANCE
      OF SUBSCRIPTION BY SOUTHERN IOWA BIOENERGY LLC:

    

    Southern
      Iowa BioEnergy LLC hereby accepts the subscription for the above
      Units.

    

    Dated
      this ____
      day of
      ________________,
      200___.

    

    
      	
              SOUTHERN
                IOWA BIOENERGY LLC

            
	 	 
	 	 
	
              By:

            	
               

              
                

              

            
	 	 
	 	 
	
              Its:

            	
               

              
                

              

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    PROMISSORY
      NOTE
      AND SECURITY AGREEMENT

    

    Date
      of
      Subscription Agreement: ___________________________________, 200__.

     

    $1,000.00
      per Unit

     

    Minimum
      Investment of 20 Units ($20,000), 1 Unit Increments Thereafter
      ($1,000)

    

    
      	 	
                Number
                of Units subscribed

            
	 	
               

                Total
                Purchase Price ($1,000.00 per Unit multiplied by number of Units
                subscribed)

            
	
              (                            )

            	
               

                Less
                Initial Payment (10% of Principal Amount)

            
	 	
               

                Principal
                Balance

            

    

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby promises to pay to the order of Southern Iowa
      BioEnergy LLC, an Iowa limited liability company (“SIBE”), at its principal
      office located 115 South Linden Street, Lamoni, Iowa 50140, or at such other
      place as required by SIBE, the Principal Balance set forth above in one lump
      sum
      to be paid without interest within 30 days following the call of the SIBE Board
      of Directors, as described in the attached Subscription Agreement. In the event
      the undersigned fails to timely make any payment owed, the entire balance of
      any
      amounts due under this full recourse Promissory Note and Security Agreement
      shall be immediately due and payable in full with interest at the rate of 12%
      per annum from the due date and any amounts previously paid in relation to
      the
      obligation evidenced by this Promissory Note and Security Agreement may be
      forfeited at the discretion of SIBE. 

     

    The
      undersigned agrees to pay to SIBE on demand, all costs and expenses incurred
      to
      collect any indebtedness evidenced by this Promissory Note and Security
      Agreement, including, without limitation, reasonable attorneys’ fees. This
      Promissory Note and Security Agreement may not be modified orally and shall
      in
      all respects be governed by, construed, and enforced in accordance with the
      laws
      of the State of Iowa. 

     

    The
      provisions of this Promissory Note and Security Agreement shall inure to the
      benefit of SIBE and its successors and assigns, which expressly reserve the
      right to pursue the undersigned for payment of the amount due hereon by any
      legal means in the event that the undersigned defaults on obligations provided
      in this Promissory Note and Security Agreement. 

     

    The
      undersigned waives presentment, demand for payment, notice of dishonor, notice
      of protest, and all other notices or demands in connection with the delivery,
      acceptance, performance or default of this Promissory Note and Security
      Agreement. 

     

    The
      undersigned hereby grants to SIBE, and its successors and assigns (“Secured
      Party”), a purchase money security interest in and to all of the undersigned’s
      Membership Units of SIBE now owned or hereafter acquired. This security interest
      is granted as non-exclusive collateral to secure payment and performance of
      the
      obligation owed to Secured Party from the undersigned pursuant to this
      Promissory Note and Security Agreement. The undersigned further authorizes
      Secured Party to retain possession of certificates representing such Membership
      Units and to take any other actions necessary to perfect the security interest
      granted herein without the need of obtaining any further assent or signature
      from the undersigned. 

     

    
      	
              Dated:                 ,
                2008.

            	 	 
	
              OBLIGOR/DEBTOR:

            	 	
              JOINT
                OBLIGOR/DEBTOR:

            
	 	 	 
	
               Printed
                or Typed Name of Joint Obligor/Debtor

            	 	
              Printed
                or Typed Name of Obligor/Debtor

            
	 	 	 	 	 
	
              By:
                

            	 	 	
              By:  

            	 
	 	
              (Signature)

            	 	 	
              (Signature)

            
	 	 	 
	
              Officer
                Title if Obligor/Debtor is an Entity  

            	 	 
	
               

            	 	 
	
              Address
                of Obligor/Debtor  

            	 	 

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      “A”

    

    MEMBER
      SIGNATURE PAGE

    

    ADDENDUM
      TO THE

    AMENDED
      AND RESTATED OPERATING AGREEMENT 

    OF
      SOUTHERN IOWA BIOENERGY LLC

    

    The
      undersigned does hereby warrant, represent, covenant and agree that: (i) the
      undersigned, as a condition to becoming a Member in Southern Iowa BioEnergy
      LLC,
      has received a copy of the Amended And Restated Operating Agreement dated May
      4,
      2005, and, if applicable, all amendments and modifications thereto; (ii) the
      undersigned shall be subject to and comply with all terms and conditions of
      such
      Amended And Restated Operating Agreement in all respects, as if the undersigned
      had executed said Amended And Restated Operating Agreement on the original
      date
      thereof; and (iii) the undersigned is and shall be bound by all of the
      provisions of said Amended And Restated Operating Agreement from and after
      the
      date of execution of this Addendum.

    

    
      	
              Individuals:

            	 	
              Entities:

            
	 	 	 
	 	 	 
	 	 	 
	
              Name
                of Individual Member (Please Print)

            	 	
              Name
                of Entity (Please Print)

            
	 	 	 
	 	 	 
	 	 	 
	
              Signature
                of Individual

            	 	
              Print
                Name and Title of Officer

            
	 	 	 
	 	 	 
	 	 	 
	
              Name
                of Joint Individual Member (Please Print)

            	 	
              Signature
                of Officer

            
	 	 	 
	 	 	 
	 	 	 
	
              Signature
                of Joint Individual Member

            	 	 

    

    

    Agreed
      to and Accepted on Behalf of the

    Company
      and its Members:

    

    
      	
              SOUTHERN
                IOWA BIOENERGY LLC

            
	 	 
	 	 
	
              By:

            	 

              

            
	 	 
	 	 
	
              Its:

            	 

              

            

    

    

    
      
        
        

      

      
        1EXHIBIT
      4.3

    

    THIRD
      AMENDED AND RESTATED ESCROW
      AGREEMENT

    

    This
      Third Amended and Restated Escrow Agreement (the "Agreement") dated as of April
      25, 2008 is by and between, Southern Iowa BioEnergy LLC, an Iowa limited
      liability company (the “Company”) and Great Western Bank of Omaha, Nebraska (the
“Escrow Agent”), (the “Escrow Agent” and the “Company” may also be hereinafter
      referred to as the “Parties”).

    

    RECITALS

    

    WHEREAS,
      the Parties entered into a Second Amended and Restated Escrow Agreement on
      November 20, 2007; and

    

    WHEREAS,
      Section 15(d) of the Second Amended and Restated Escrow Agreement allows
      modification of the Amended and Restated Escrow Agreement through an amendment;
      and 

    

    WHEREAS,
      the Parties desire to amend and restate the Second Amended and Restated Escrow
      Agreement to revise and to set forth their respective rights, duties, and
      responsibilities with respect to the Second Amended and Restated Escrow
      Agreement; and

    

    WHEREAS,
      the Company proposes to offer a minimum of 9,000 and a maximum of 14,500 of
      its
      Membership Units (the "Units") at a price of $1,000 per Unit, with a required
      minimum investment of 20 Units and in additional increments of 1 Unit, in an
      offering in the states of Alaska, Illinois, Iowa Kansas, Missouri and Colorado,
      and possibly other states, made pursuant to a federal registration under the
      provisions of the Securities Act of 1933, as amended (the "Offering") or an
      available exemption from registration;

    

    WHEREAS,
      the Company has filed a registration statement (as may be amended), (the
      "Registration Statement") registering the Units with the Securities and Exchange
      Commission (the “Commission”) and the states of Alaska, Illinois, Iowa Kansas,
      Missouri and Colorado; 

    

    WHEREAS,
      the Company will allow investors in the Offering to deliver the purchase price
      of the subscribed Units in installments;

    

    WHEREAS,
      the Company desires to comply with the requirements of the Securities Act of
      1933 and of the various state regulatory statutes and regulations, and desires
      to protect the investors in the Offering by providing, under the terms and
      conditions herein set forth, for the return to subscribers (collectively
      referred to herein as the “Subscribers” or individually referred to herein as a
“Subscriber”) of the money which they may pay on account of purchases of Units
      in the Offering if the Minimum Escrow Deposit (hereinafter defined) is not
      deposited with the Escrow Agent; and

    

    NOW,
      THEREFORE, in consideration of the premises the Parties agree as
      follows:

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1. ACCEPTANCE
      OF APPOINTMENT:
      Escrow
      Agent hereby agrees to act as escrow agent under this Agreement. The Escrow
      Agent shall have no duty to enforce any provision hereof requiring performance
      by any other party hereunder.

    

    2. ESTABLISHMENT
      OF ESCROW ACCOUNT:
      An
      escrow account (the "Escrow Account") is hereby established with the Escrow
      Agent for the benefit of the investors in the Offering. Except as specifically
      provided in this Agreement, the Escrow Account shall be created and maintained
      subject to the customary rules and regulations of the Escrow Agent pertaining
      to
      such accounts.

    

    3. OWNERSHIP
      OF ESCROW ACCOUNT:
      Until
      such time as the funds deposited in the Escrow Account (the "Deposited Funds")
      shall equal the Minimum Escrow Deposit (as hereinafter defined), all funds
      deposited in the Escrow Account by the Company shall not become the property
      of
      the Company or be subject to the debts of the Company or any other person but
      shall be held by the Escrow Agent solely for the benefit of the
      Subscribers.

    

    4. ESCROW
      FEES:
      The
      Company hereby agrees to pay the Escrow Agent an advance payment for ordinary
      services rendered hereunder in the amount of $1,000.00 (the "Escrow Fee").
      Notwithstanding the foregoing, no fee paid under this Agreement shall exceed
      the
      amount of interest on the Escrow Account and shall be paid from interest only
      and not from principal. 

    

    5. DEPOSIT
      OF PROCEEDS:
      All
      proceeds from subscriptions for Units in the Offering shall be delivered by
      the
      Company to the Escrow Agent, within forty-eight hours of the receipt thereof
      from Subscribers, endorsed (if appropriate) to the order of the Escrow Agent,
      together with an appropriate written statement setting forth the name, address
      and social security number/taxpayer identification number of each person or
      entity subscribing for Units, the number of Units subscribed for, and the amount
      paid by each such Subscriber. Any such proceeds deposited with the Escrow Agent
      in the form of uncollected checks shall be promptly presented by the Escrow
      Agent for collection through customary banking and clearing house facilities.
      As
      the proceeds of each sale are deposited with the Escrow Agent, the Company
      shall
      reserve the number of Units confirmed to the Subscriber thereof in connection
      with such subscription. All such deposited proceeds are referred to herein
      as
      the "Escrow Funds."

    

    6. INVESTMENT
      OF ESCROW FUNDS:
      The
      Escrow Funds shall be credited by Escrow Agent and recorded in the Escrow
      Account. In accordance with Rule 15c2-4 of the Securities Regulations, the
      Escrow Agent shall be permitted, and is hereby authorized to deposit transfer,
      hold and invest all funds received under this Agreement, including principal
      and
      interest, in savings accounts, bank money market accounts, short term
      certificates of deposit or short term securities issued or guaranteed by the
      U.S. Government. Any
      interest received by Escrow Agent with respect to the Escrow Funds shall be
      paid
      pursuant to the terms of this Agreement.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    7. TERMINATION
      OF ESCROW: This
      Agreement and the Escrow created hereunder shall be terminated as provided
      in
      paragraph 8 hereof or as of the date one year and one day following the date
      upon which the Commission authorizes the Offering (the "Offering's Effective
      Date") or longer if the Commission, upon the request of the Company, extends
      the
      effectiveness of the Offering beyond the initial one year and one day period
      of
      effectiveness (the “Termination Date”), provided; however, if the Company has
      filed for an extension of the offering with the Commission prior to the
      termination date and the application has not been rejected, this Agreement
      shall
      not terminate until such time as the Commission rejects the application for
      extension or for 180 days after the Commission grants such application. Prior
      to
      the Termination Date, the Company has received subscription agreements for
      membership units equal to the minimum offering amount and the Company has
      advised the Subscribers of those membership units to remit to the Escrow Agent
      the balance of the purchase price, then the Escrow may continue beyond the
      Termination Date until all Funds have been paid and the conditions for releasing
      the Funds have been satisfied. In no event shall this date be later than three
      (3) months following the Termination Date. The Company shall notify Escrow
      Agent
      of the Offering's Effective Date or extension thereof, within thirty (30) days
      of the receipt of notice of the Offering's Effective Date or extension from
      the
      Securities and Exchange Commission. 

    

    8. DISPOSITION
      OF ESCROW FUNDS:
      The
      Escrow Agent shall have the following duties and obligations under this
      Agreement:

    

    A. The
      Escrow Agent shall send a written notice acknowledging the receipt of the
      Deposited Funds every seven days to the Company. 

    

    B. The
      Company shall give notice to the Escrow Agent when it has completed a rescission
      offering to its current investors. After the notice from the Company regarding
      the completion of the rescission offering, the Escrow Agent shall give the
      Company prompt written notice when the Deposited Funds equal $900,000 (exclusive
      of interest). Following receipt of such notice, if the Company has received
      subscriptions for at least 9,000 of its membership units in the Registered
      Offering, it will advise the Subscribers to remit to the Escrow Agent the
      balance of the purchase price within thirty (30) days. Thereafter, Escrow Agent
      shall give the Company written notice acknowledging the receipt of the Deposited
      Funds every seven days. The Escrow Agent shall give the Company prompt written
      notice when the Deposited Funds total $9,000,000 (exclusive of interest).

    

    C. At
      the
      time (and in the event) that: (a) the Deposited Funds shall, during the term
      of
      this Agreement, equal or exceed $9,000,000 in subscription proceeds (exclusive
      of interest) (the "Minimum Escrow Deposit"); (b) the Company has given written
      notice to Escrow Agent that it has
      completed a private placement of 11,000 membership units with SAFER Energy,
      LLC
      ("Safer") to perform design, engineering and construction services for certain
      parts of the proposed biodiesel plant as described in the Safer memorandum
      of
      understanding; (c)
      the
      Escrow Agent
      shall
      have received written confirmation from the Company that the Company has
      obtained a written debt financing commitment for debt financing of at least
      $25,850,335; (d) the Company has affirmatively elected in writing to terminate
      this Agreement; and (e) the
      Escrow
      Agent shall have provided the Company an affidavit that the Company may file
      in
      the states in which the Units have been registered stating that the foregoing
      requirements (a), (b), (c) and (d) of this subsection 8C have been satisfied,
      then this Agreement shall terminate, and the Escrow Agent shall promptly
      disburse the funds on deposit, including interest, to the Company to be used
      in
      accordance with the provisions set out in the Registration Statement. The
      Company will deliver a copy of the Registration Statement to the Escrow Agent
      upon execution of this Agreement. The Escrow Agent will have no responsibility
      to examine the Registration Statement with regard to the Escrow Account or
      otherwise, nor shall Escrow Agent have any duty to ensure that Company complies
      with the Registration Statement. Upon the making of such disbursement, the
      Escrow Agent shall be completely discharged and released of any and all further
      responsibilities hereunder.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    D. In
      the
      event the Deposited Funds do not equal or exceed the Minimum Escrow Deposit
      on
      or before the Termination Date or if the Company has not received a written
      debt
      financing commitment or completed a private placement with Safer as described
      herein on or before the Termination Date, the Escrow Agent shall return to
      each
      of the Subscribers, as promptly as possible after such Termination Date and
      on
      the basis of its records pertaining to the Escrow Account: (a) the sum which
      each Subscriber initially paid in on account of subscriptions for the Units
      in
      the Offering and (b) each Subscriber’s portion of the total interest earned on
      the Escrow Account as of the Termination Date, (c) reduced by the transaction
      fees provided in paragraph 10 hereof. Computation of any Subscriber’s share of
      the net interest earned will be a weighted average based on the proportion
      of
      such Subscriber’s deposit in the Escrow Account from the Offering to all such
      Subscribers’ deposits held by the Escrow Agent and upon the length of time in
      days such deposit was held in the Escrow Account as compared to all such
      deposits. All computations with respect to each Subscriber’s allocable share of
      net interest shall be made by the Escrow Agent, which determinations shall
      be
      final and conclusive. Any amount paid or payable to a Subscriber pursuant to
      this paragraph shall be deemed to be the property of such Subscriber, free
      and
      clear of any and all claims of the Company or its agents or creditors; and
      the
      respective subscriptions for the Units made and entered into in the Offering
      shall thereupon be deemed, ipso facto, to be cancelled without any further
      liability of the Subscribers or any of them to pay for the Units. At such time
      as the Escrow Agent shall have made all the payments called for in this
      paragraph, the Escrow Agent shall be completely discharged and released of
      any
      and all further responsibilities hereunder, and the Units reserved (as provided
      in paragraph 5) shall be released from such reservation, except that Escrow
      Agent shall be required to prepare and issue a single IRS Form 1099 to each
      Subscriber in the event that funds are returned to Subscribers.

    

    E. In
      the
      event the Company offers its Subscribers the right to withdraw and terminate
      their subscription agreements pursuant to a rescission offer (“Rescission
      Offer”), upon
      written notice from the Company identifying the Subscribers who have accepted
      the Rescission Offer, the
      Escrow
      Agent shall return to each rescinding Subscriber, as promptly as
      possible on
      the
      basis of its records pertaining to the Escrow Account: (a) the sum which each
      rescinding Subscriber initially paid in on account of subscriptions for the
      Units in the Offering and (b) each rescinding Subscriber's portion of the total
      interest earned on the Escrow Account as of the Rescission Offer termination
      date, (c) reduced by the transaction fees provided in paragraph 10 hereof.
      Computation of any rescinding Subscriber’s share of the net interest earned will
      be a weighted average based on the proportion of such rescinding Subscriber’s
      deposit in the Escrow Account from the Offering to all such rescinding
      Subscribers' deposits held by the Escrow Agent and upon the length of time
      in
      days such deposit was held in the Escrow Account as compared to all such
      deposits. All computations with respect to each rescinding Subscriber’s
      allocable share of net interest shall be made by the Escrow Agent, which
      determinations shall be final and conclusive. Any amount paid or payable to
      a
      rescinding Subscriber pursuant to this paragraph shall be deemed to be the
      property of such rescinding Subscriber, free and clear of any and all claims
      of
      the Company or its agents or creditors; and the respective purchases of the
      Units made and entered into in the Offering shall thereupon be deemed, ipso
      facto, to be cancelled without any further liability of the rescinding
      Subscribers or any of them to pay for the Units. At such time as the Escrow
      Agent shall have made all the payments called for in this paragraph, the Escrow
      Agent shall continue to be bound by the other provisions of this Agreement,
      and
      the Units reserved for each rescinding Subscriber (as provided in paragraph
      5)
      shall be released from such reservation, except that the Escrow Agent shall
      be
      required to prepare and issue a single IRS Form 1099 to each rescinding
      Subscriber. 

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    9. LIABILITY
      OF ESCROW AGENT:
      In
      performing any duties under the Escrow Agreement, the Escrow Agent shall not
      be
      liable to the Company, any Subscriber
      or any
      Party for damages, losses, or expenses, except for gross negligence or willful
      misconduct on the part of the Escrow Agent. The Escrow Agent shall not incur
      any
      such liability for (a) any act or failure to act made or omitted in good faith,
      or (b) any action taken or omitted in reliance upon any instrument, including
      any written statement or affidavit provided for in this Agreement that the
      Escrow Agent shall in good faith believe to be genuine, nor will the Escrow
      Agent be liable or responsible for forgeries, fraud, impersonations, or
      determining the scope of any representative’s authority. In addition, the Escrow
      Agent may consult with legal counsel in connection with the Escrow Agent's
      duties under this Agreement and shall be fully protected in any action taken,
      suffered, or permitted by it in good faith in accordance with the advice of
      counsel. The Escrow Agent is not responsible for determining and verifying
      the
      authority of any person acting or purporting to act on behalf of any party
      to
      this Agreement.

    

    10. FEES
      AND EXPENSES:
      In the
      event the Deposited Funds do not equal or exceed the Minimum Escrow Deposit
      before the Termination Date or the Company does not receive a written debt
      financing commitment as described herein before the Termination Date, or the
      Company offers its Subscribers the right to withdraw and terminate their
      subscription agreements pursuant to a Rescission Offer, the Escrow Agent shall
      be entitled to a fee of $10.00 per Subscriber
      receiving an IRS Form 1099,
      which
      fees shall be paid from the interest on the Escrow Account only and not from
      principal. In the event the Escrow Agent renders any service not provided for
      in
      this Agreement, or if the Company requests a substantial modification of its
      terms, or if any controversy arises, or if the Escrow Agent is made a party
      to,
      or intervenes in, any litigation pertaining to this escrow or its subject
      matter, the Escrow Agent shall be reasonably compensated for such extraordinary
      services and reimbursed for all costs, attorney's fees, including allocated
      costs of in-house counsel, and expenses occasioned by such default, delay,
      controversy or litigation and the Escrow Agent shall have the right to retain
      all documents and/or other things of value at any time held by the Escrow Agent
      in this escrow until such compensation, fees, costs and expenses are paid.
      The
      Company promises to pay these sums upon demand. Unless otherwise provided,
      the
      Company will pay all of the Escrow Agent's usual charges and the Escrow Agent
      may deduct such sums from the interest on the Escrow Account only and not from
      principal deposited to the Escrow Account.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    11. CONTROVERSIES:
      If any
      controversy arises between the Parties to this Agreement, or with any other
      Party, concerning the subject matter of this Agreement, its terms or conditions,
      the Escrow Agent will not be required to determine the controversy or to take
      any action regarding it. The Escrow Agent may hold all documents and funds
      and
      may wait for settlement of any such controversy by final appropriate legal
      proceedings or other means as, in the Escrow Agent's discretion, the Escrow
      Agent may require, despite what may be set forth elsewhere in this Agreement.
      In
      such event, the Escrow Agent will not be liable for interest or damage.
      Furthermore, the Escrow Agent may at its option file an action of interpleader
      requiring the Parties to answer and litigate any claims and rights among
      themselves. The Escrow Agent is authorized to deposit with the clerk of the
      court all documents and funds held in escrow, except all costs, expenses,
      charges and reasonable attorney fees incurred by the Escrow Agent due to the
      interpleader action and which the Company agrees to pay. Upon initiating such
      action, the Escrow Agent shall be fully released and discharged of and from
      all
      obligations and liability imposed by the terms of this Agreement.

    

    12. INDEMNIFICATION
      OF ESCROW AGENT:
      The
      Company and its successors and assigns agree jointly and severally to indemnify
      and hold the Escrow Agent harmless against any and all losses, claims, damages,
      liabilities, and expenses, including reasonable costs of investigation, counsel
      fees, including allocated costs of in-house counsel and disbursements that
      may
      be imposed on the Escrow Agent or incurred by the Escrow Agent in connection
      with the performance of its duties under this Agreement, including but not
      limited to any litigation arising from this Agreement or involving its subject
      matter. The Escrow Agent shall have a first lien on the property and papers
      held
      under this Agreement for such compensation and expenses.

    

    13. RESIGNATION
      OF ESCROW AGENT:
      The
      Escrow Agent may resign at any time upon giving at least (30) days written
      notice to the Company provided, however, that no such resignation shall become
      effective until the appointment of a successor escrow agent which shall be
      accomplished as follows: The Company shall use its best efforts to obtain a
      successor escrow agent within thirty (30) days after receiving such notice.
      If
      the Company fails to agree upon a successor escrow agent within such time,
      the
      Escrow Agent shall have the right to appoint a successor escrow agent authorized
      to do business in the state of Iowa. The successor escrow agent shall execute
      and deliver an instrument accepting such appointment and it shall without
      further acts, be vested with all the estates, properties, rights, powers, and
      duties of the predecessor escrow agent as if originally named as escrow agent.
      The Escrow Agent shall thereupon be discharged from any further duties and
      liability under this Agreement.

    

    14. AUTOMATIC
      SUCCESSION:
      Any
      company into which the Escrow Agent may be merged or with which it may be
      consolidated, or any company to whom the Escrow Agent may transfer a substantial
      amount of its global escrow business, shall be the Successor to the Agent
      without the execution or filing of any paper or any further act on the part
      of
      any of the Parties, anything herein to the contrary
      notwithstanding.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    15. MISCELLANEOUS: 

    

    (a)
      GOVERNING
      LAWS:
      This
      Agreement is to be construed and interpreted according to Iowa law.

    

    (b)
      COUNTERPART:
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument. The exchange of copies of this Agreement and of signature pages
      by
      facsimile transmission shall constitute effective execution and delivery of
      this
      Agreement as to the parties and may be used in lieu of the original Agreement
      for all purposes. Signatures of the parties transmitted by facsimile shall
      be
      deemed to be their original signatures for all purposes.

    

    (c)
      NOTICES:
      All
      instructions, notices and demands herein provided for shall be in writing and
      shall be deemed to have been duly given (a) on the date of service if served
      personally on the party to whom notice is to be given; (b) on the day of
      transmission if sent by facsimile transmission to the facsimile number given
      below and telephonic confirmation of receipt is promptly obtained after
      completion of transmission; (c) on the next day on which such deliveries are
      made to the respective party, when delivery is to Federal Express or similar
      overnight courier or the Express Mail service maintained by the United States
      Postal Service; or (d) on the fifth day after mailing if mailed to the party
      to
      whom notice is to be given, by first class mail, registered or certified,
      postage prepaid and properly addressed, return receipt requested, to the party
      as follows: 

     

    
      	
              If
                to the Company:

            	
              If
                to the Escrow Agent:

            
	 	 
	
              Southern
                Iowa BioEnergy

            	
              Great
                Western Bank

            
	
              Attention:
                President

            	
              ATTN:
                Trust Department

            
	
              115
                South Linden Street

            	
              P.O.
                Box 4070

            
	
              Lamoni,
                Iowa 50140

            	
              Omaha,
                NE 68107

            
	
               

            	Fax:
              (402) 554-7346

    

    

    With
      a
      required copy to:

    

    Christopher
      R. Sackett

    Brown,
      Winick, Graves, Gross, Baskerville   

    and
      Schoenebaum, P.L.C.    

    666
      Grand
      Avenue, Suite 2000   

    Des
      Moines, IA 50309    

    Fax:
      (515) 283-0231     

    Telephone:
      (515) 242-2400    

     

    (d) AMENDMENTS:
      This
      Agreement may be amended or modified and any of the terms, covenants,
      representations, warranties or conditions hereof may be waived, only by a
      written instrument executed by the parties hereto, or in the case of a waiver,
      by the party waiving compliance. Any waiver by any party of any condition or
      of
      the breach of any provision, term, covenant, representation or warranty
      contained in the Agreement, in any one or more instances, shall not be deemed
      to
      be nor construed as further or continuing waiver of any such conditions or
      of
      the breach of any other provision, term, covenant, representation or warranty
      of
      this Agreement. 

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (e) ENTIRE
      AGREEMENT:
      This
      Agreement contains the entire understanding among the parties hereto with
      respect to the escrow contemplated hereby and supersedes and replaces all prior
      and contemporaneous agreements and understandings, oral or written, with regard
      to such escrow.

    

    (f) NON-ENDORSEMENT: The
      Company represents and agrees that it has not made nor will it in the future
      make any representation that states or implies that the Escrow Agent has
      endorsed, recommended or guaranteed the purchase, value, or repayment of the
      Securities offered for sale by the Company. 

     

    The
      undersigned acknowledges that Great Western Bank is acting only as an escrow
      agent in connection with the offering of the Securities described herein, and
      has not endorsed, recommended or guaranteed the purchase, value or repayment
      of
      such Securities.

     

    IN
      WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures
      as of
      the day and year first above written.

    

      
        	
                The
                  Company

              	 	
                Escrow
                  Agent

              
	 	 	 	 	 
	
                By:

              	
                /s/
                  William T. Higdon

              	 	
                By:

              	
                /s/
                  Thomas Van Robays

              
	 	 	 	 	 
	
                Its:

              	
                President

              	 	
                Its:

              	
                VP
                  & Trust Officer

              

      

    

     

    
      
        
        

      

      
        8

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