Exhibit

    

    
      	
              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.

            	
               

              Line
                of Credit No. 272982

              Date
                12-24-2007

              Max.
                Credit Amt. 50,000.00

              Loan
                Ref. No. 272982

            


    

    


    You
      have
      extended to me a line of credit in the 

    AMOUNT
      of
FIFTY
      THOUSAND FORTY AND NO/100 $50,000.00.
      

     

    You
      will
      make loans to me from time to tome until 12:00
      P.m. on 02-16-2008.
      Although
      the line of credit expires on that date, I will remain obligated to perform
      all
      my duties under this agreement so long as I owe you any money advanced according
      to the terms of this agreement, as evidenced by any note or notes I have signed
      promising to repay these amounts.

     

    This
      line
      of credit is an agreement between you and me. It is not intended that any third
      party receive any benefit from this agreement, whether by direct payment,
      reliance for future payment or in any other manner. This agreement is not a
      letter of credit.

     

    1.
      AMOUNT:
      This
      line of credit is:

     ̈
      OBLIGATORY: You may not refuse to make a loan to me under this line of credit
      unless one of the following occurs:

      


    
      
        
          	
                	a.	
                  I
                    have borrowed the maximum amount available to
                    me;

                


        

      

      
        
          	
                	b.	
                  This
                    line of credit has
                    expired;

                


        

      

    

    
      
        
          	
                	c.	
                  I
                    have defaulted on the not (or notes) which show my indebtedness
                    under this
                    line of credit;

                


        

      

    

    
      
        
          	
                	d.	
                  I
                    have violated any term of this line of credit or any note or
                    other
                    agreement entered into in connection with this line of
                    credit;

                


          	 	e.	 
                  _____________________________________________________________________________________________


          	 	 	
                   
                    _____________________________________________________________________________________________

                


          	 	 	
                   
                    _____________________________________________________________________________________________.

                


        

        
        

      

    

    x
      DISCRETIONARY: You may refuse to make a loan to me under this line of credit
      once the aggregate outstanding advances equal or exceed ZERO
      AND NO/100 $0.00.

     

    Subject
      to the obligatory or discretionary limitations above, this line of credit
      is:

     

    x
      OPEN-END
      (Business or Agricultural only): I may borrow up to the maximum amount of
      principal more than one time.

     ̈
      CLOSED-END: I may borrow up to the maximum only one. time.

     

    2.
      PROMISSORY NOTE:
      I will
      repay any advances made according to this line of credit agreement as set out
      in
      the promissory note, I signed on 12-24-2007 ,
      or any
      note(s) I sign at a later time which represent advances under this agreement.
      The note(s) set(s) out the terms relating to maturity, interest rate, repayment
      and advances. If indicated on the promissory note, the advances will be made
      as
      follows:

    
      _______________________________________________________________________________________________

    

    
       

      _______________________________________________________________________________________________

    

     

    _______________________________________________________________________________________________

     

    3.
      RELATED DOCUMENTS:
      I have
      signed the following documents in connection with this line of credit and
      note(s) entered into in accordance with this line of credit:

     

    
      
        	 ̈	security agreement dated
                ___________	 ̈	___________________
	 ̈	mortgage
                dated ___________________	 ̈	___________________
	 ̈	guaranty dated ___________________	 ̈	___________________


      

    

     

    4.
      REMEDIES:
      If I am
      in default on the note(s) you may:

     

    a. take
      any
      action as provided in the related documents;

    b. without
      notice to me, terminate this line of credit.

     

    By
      selecting any of these remedies you do not give up your right to later use
      any
      other remedy. By deciding not to use any remedy should I default, you do not
      waive your right to later consider the event a default, if it happens again.
      

     

    5.
      COSTS AND FEES:
      If you
      hire an attorney to enforce this agreement I will pay your reasonable attorney's
      fees, where permitted by law. I will also pay your court costs and costs of
      collection, where permitted by law.

     

    6.
      COVENANTS:
      For as
      long as this line of credit is in effect or I owe you money for advances made
      in
      accordance with the line of credit, I will do the following: 

     

    a.
      maintain books and records of my operations relating to the need for this line
      of credit;

    b.
      permit
      you or any of your representatives to inspect and/or copy these
      records;

    c.
      provide to you any documentation requested by you which support the reason
      for
      making any advance under this line of credit;

    d.
      permit
      you to make any advance payable to the seller (or seller and me) of any items
      being purchased with that advance;

    e.
      SEE
      PROMISSORY NOTE FOR COVENANTS .

     

    
      
        

      

       

    

    
      
 

    7.
      NOTICES:
      All
      notices or other correspondence with me should be sent to my address stated
      above. The notice or correspondence shall be effective when deposited in the
      mail, first class, or delivered to me in person.

     

    8.
      MISCELLANEOUS:
      This
      line of credit may not be changed except by a written agreement signed by you
      and me. The law of the state in which you are located will govern this
      agreement. Any term of this agreement which is contrary to applicable law will
      not be effective, unless the law permits you and me to agree to such a
      variation. 

     

    
      	FOR THE
              LENDER	 	SIGNATURES:
              I
              AGREE TO THE TERMS OF THIS LINE OF CREDIT. I HAVE RECEIVED A COPY ON
              TODAY'S DATE.
	 	 	 	 
	/s/ Kevin W. Klemesrud	 	/s/ Alan Elefson	
              /s/
                J.R. Cornett

            
	
              
KEVIN
              W. KLEMESRUD	 	
              
ALAN
              ELEFSON, TREASURER;	
              
J.R.
              CORNETT, PERSONALLY
	Title PRESIDENT	 	 	
            
	 	 	 	 
	 	 	/s/ William Higdon	/s/ Leon
              Kessel
	 	 	
              
WILLIAM
              HIGDON, PERSONALLY;	
              
LEON
              KESSEL, PERSONALLY
	 	 	
            	
            
	 	 	 	 
	 	 	/s/
              Jack Cooley	/s/
              William Morain
	 	 	
              
JACK
              COOLEY, PERSONALLY;	
              

              WILLIAM
                MORAIN, PERSONALLY