Exhibit
10.2


FIRST
SUPPLEMENT

TO THE

MASTER AMENDED AND RESTATED CREDIT AGREEMENT

(Term Loans A & B)


THIS
FIRST SUPPLEMENT TO THE MASTER AMENDED AND RESTATED CREDIT AGREEMENT (“First Supplement”) is made and entered into
as of June     , 2006, by and between EAST KANSAS
AGRI-ENERGY, L.L.C., a Kansas limited
liability company, and HOME
FEDERAL SAVINGS BANK, a federally chartered stock savings bank.  This First Supplement supplements the Master
Amended and Restated Credit Agreement between the Lender and the Borrower dated
as of even date herewith (as the same may be amended, restated, or otherwise
modified (other than by Supplements entered into pursuant to Section 1.02
thereof) from time to time, the “Master Agreement”).


RECITALS:


A.            Pursuant to the Original Credit
Agreement, Lender has made certain loans and other credit accommodations
available to Borrower, including two construction and term loans referred to as
“Loan A” and “Loan B” in the Original Credit Agreement and loan number 2458 and
2459, respectively, in Lender’s records.


B.            Term Loan A and Term Loan B
converted to term loans and began amortization on October 20, 2005 (the “Conversion Date”).


C.            Borrower and Lender wish to
re-document, amend and restate each of the existing loans and credit facilities
by Lender in favor of Borrower, including Term Loan A and Term Loan B, and
document certain new loans and credit facilities, in each case pursuant to the
Master Agreement, the Supplements, and the other Amendment Documents.


D.            As of the date hereof, the principal
amounts outstanding under Term Loan A and Term Loan B are $4,250,000 and
$17,750,000, respectively.


AGREEMENT:


1.             Definitions.  Capitalized terms used and not otherwise
defined in this First Supplement have the meanings attributed to them below or
in the Master Agreement.  Definitions in
this First Supplement control over inconsistent definitions in the Master
Agreement, but only to the extent the defined terms apply to Loans under this
First Supplement.  Definitions set forth
in the Master Agreement control for all other purposes.  As used in this First Supplement, the
following terms have the following meanings:


“Prime Rate” means the
rate of that name as published in the “Money Rates” Section of the Wall Street Journal as of the applicable Determination Date;
provided, if Lender determines 









 



that the foregoing
source is unavailable, Lender will determine the Prime Rate based on a new
index that is based on comparable information.


“Term Loan A” means the Loan
represented by Term Note A and referred to as “Loan A” in the Original Credit
Agreement.


“Term Loan B” means the Loan
represented by Term Note B and referred to as “Loan B” in the Original Credit
Agreement.


“Term Loan A Maturity Date”
means the earlier of (i) October 1, 2015, and (ii) the date on which the
principal amount of Term Loan A has been declared or has automatically become
due and payable, whether by acceleration or otherwise.


“Term Loan B Maturity Date”
means the earlier of (i) October 1, 2010, and (ii) the date on which the principal
amount of Term Loan B has been declared or has automatically become due and
payable, whether by acceleration or otherwise.


“Term Note A” means the Amended and
Restated Term Note A made by Borrower payable to the order of Lender, dated the
date hereof, in the initial aggregate principal amount of $5,000,000 in
substantially the form of Exhibit 1A attached hereto.


“Term Note B” means the Amended and
Restated Term Note B made by Borrower payable to the order of Lender, dated the
date hereof, in the initial aggregate principal amount of $21,000,000 in
substantially the form of Exhibit 1B attached hereto.


2.             Effect of First Supplement.  This First Supplement, along with the Master
Agreement, amends the terms of Term Loan A and Term Loan B effective as of the date
hereof.


3.             Conditions Precedent.  Lender will have no obligation under this
First Supplement, the Agreement, or any Amendment Document until each of the
following conditions precedent is satisfied or waived in accordance with Section
8.02 of the Master Agreement:


(a)                                  The
principal amount outstanding on Term Loan A and Term Loan B is no more than
$4,250,000 and $17,750,000, respectively.


(b)                                 Lender
has received all fees and other amounts due and payable on or prior to the date
hereof, including the fees and amounts for reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by Borrower pursuant
to any Loan Document or any other agreement with Lender;


(c)                                  Lender
has received this First Supplement, Term Note A, and Term Note B, in each case
duly executed and delivered by Borrower;


(d)                                 Lender
has received Borrower’s counterparts of the Master Agreement and all Amendment
Documents contemplated thereby, in each case duly executed and 



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delivered by Borrower, as
well as all other duly executed and delivered instruments, agreements, opinion
letters, and documents as Lender may require;


(e)                                  the
representations and warranties set forth in the Master Agreement are true and
correct in all material respects as of the date hereof;


(f)                                    all
conditions precedent in the Master Agreement and each other Loan Document have
been satisfied or waived; and


(g)                                 no
Default or Event of Default has occurred and is continuing.


4.             Repayment of Loans.


(a)           Term
Loan A.  Term Loan A will be
repaid in monthly installments of principal and interest based on an
amortization schedule of 120 months.  The
monthly amortized payment amount as of the date hereof is $54,226.23.  This amount will be adjusted from time to
time as the Prime Rate is adjusted. 
Lender’s determination of this amount is final and conclusive, absent
manifest error.  Payments on Term Loan A
are due and payable on the twentieth day of each month, beginning on the first
such day following the Conversion Date. 
All remaining principal and accrued interest outstanding on Term Loan A
will be due and payable on the Term Loan A Maturity Date.


(b)           Term
Loan B.  Term Loan B will be
repaid in monthly installments of principal and interest based on an
amortization schedule of 120 months and a balloon payment on the Term Loan B
Maturity Date.  The monthly amortized
payment amount as of the date hereof is $226,474.29.  This amount will be adjusted from time to
time as the Prime Rate is adjusted. 
Lender’s determination of this amount is final and conclusive, absent
manifest error. Payments on Term Loan B are due and payable on the twentieth
day of each month, beginning on the first such day following the Conversion
Date. All remaining principal and accrued interest outstanding on Term Loan B
will be due and payable on the Term Loan B Maturity Date.


(c)           Application
of Payments Upon Default.  Upon the occurrence and during the
continuance of an Event of Default, all payments received by Lender (including
through Lender’s exercise of remedies available under the Loan Documents or
otherwise) will be applied ratably to Term Loan A and Term Loan B based on each
Loan’s respective outstanding balance on the date such payment is received.


4.             Interest.  Interest
on the unpaid principal amount of Term Loan A and Term Loan B will hereafter
accrue on a simple interest basis at the floating Prime Rate in effect from
time to time.


5.             Prepayment Fees.


(a)           Term
Loan A.  Except to the extent
prepaid within the proceeds of operating cash flow, in the event any amount of
Term Loan A is paid prior to the time such amount is due and payable, whether
voluntarily or involuntarily (including any prepayment effected by Lender’s 



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exercise of any
right to accelerate), Borrower agrees to pay to Lender a prepayment fee as
follows, without duplication: (1) five percent (5.00%) of the outstanding
principal balance if prepayment is made within one year following the
Conversion Date; (2) four percent (4.00%) of the outstanding principal balance
if prepayment is made within two years following the Conversion Date; (3) three
percent (3.00%) of the outstanding principal balance if prepayment is made
within three years following the Conversion Date; (4) two percent (2.00%) of
the outstanding principal balance if prepayment is made within four years following
Conversion Date;  or (5) one percent
(1.00%) of the outstanding principal balance if prepayment is made within five
years following the Conversion Date.


(b)           Term
Loan B.  Except to the extent
prepaid with the proceeds of operating cash flow, in the event any amount of
Term Loan B is paid prior to the time such amount is due and payable, whether
voluntarily or involuntarily (including any prepayment effected by Lender’s
exercise of any right to accelerate), Borrower agrees to pay to Lender a
prepayment fee as follows, without duplication: (1) three percent (3.0%) of the
outstanding principal balance if prepayment is made within one year following
Conversion Date; (2) two percent (2.0%) of the outstanding principal balance if
prepayment is made within two years following the Conversion Date; or (3) one
percent (1.0%) of the outstanding principal balance if prepayment is made
within three years following the Conversion Date.


Borrower
agrees that these prepayment fees are paid as a fee for the right to prepay and
that they do not constitute liquidated damages or a penalty.


[SIGNATURE PAGE
FOLLOWS]



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IN WITNESS WHEREOF, the parties have caused
this First Supplement to be duly executed by their respective authorized
officers as of the day and year first written above.


	
  

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  EAST KANSAS AGRI-ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Pracht

  
	
   

  	
  Name:

  	
  William R. Pracht

  
	
   

  	
  Title:

  	
  Chairman and President

  
	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  HOME FEDERAL SAVINGS BANK

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Oftedahl

  
	
   

  	
  Name:

  	
  Eric Oftedahl

  
	
   

  	
  Title:

  	
  Vice President

  



 


[SIGNATURE
PAGE FOR FIRST SUPPLEMENT TO

MASTER AMENDED AND RESTATED CREDIT
AGREEMENT]



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EXHIBIT
1A

AMENDED AND RESTATED

TERM NOTE A


	
  $5,000,000

  	
  Rochester, Minnesota

  
	
   

  	
  June     ,
  2006

  



 


FOR VALUE RECEIVED,
the undersigned, East Kansas Agri-Energy, L.L.C., a Kansas limited liability
company (“Borrower”), hereby promises
to pay to the order of Home Federal Savings Bank (together with any subsequent
holder hereof, “Lender”)
or its successors and assigns, at Post Office Box 6947, 1016 Civic Center Drive
N.W., Rochester, Minnesota 55903-6947, (a) on the Term Loan A Maturity Date (as
defined in the Master Amended and Restated Credit Agreement between Borrower
and Lender dated as of June     , 2006 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”)) and the
First Supplement to the Master Amended and Restated Credit Agreement (Term
Loans A & B) between Borrower and Lender, dated the same date, the
principal sum of Five Million and No/100 Dollars ($5,000,000.00) or so much of
the unpaid principal amount of Term Loan A (as defined in the Credit Agreement)
as has advanced by Lender to Borrower pursuant to the Credit Agreement, and (b)
on each date specified in the Credit Agreement prior to the Term Loan A
Maturity Date, the principal amount of Term Loan A payable to Lender on such
date as specified therein, in lawful money of the United States of America in
immediately available funds, and to pay interest from the Closing Date on the
unpaid principal amount thereof from time to time outstanding, in like funds,
at said office, at the rate or rates per annum and payable on such dates as
provided in the Credit Agreement. Borrower also promises to pay Default
Interest and Additional Interest (each as defined in the Credit Agreement), on
demand, on the terms and conditions set forth in the Credit Agreement. In
addition, should legal action or an attorney-at-law be utilized to collect any
amount due hereunder, Borrower further promises to pay all costs of collection,
including the reasonable attorneys’ fees of Lender.  THIS AMENDED AND RESTATED TERM NOTE A AMENDS
THE ORIGINAL “CONSTRUCTION AND TERM LOAN NOTE A” ISSUED ON NOVEMBER 23, 2004,
BY BORROWER TO LENDER IN THE SAME AMOUNT, AND SHALL NOT BE CONSIDERED A
NOVATION OF SUCH ORIGINAL NOTE.


All borrowings
evidenced by this Amended and Restated Term Note A and all payments and
prepayments of the principal hereof and the date thereof shall be recorded by
Lender in its internal records; provided, that the failure of Lender to
make such a notation or any error in such notation will not affect the
obligations of Borrower to make the payments of principal and interest in
accordance with the terms of this Amended and Restated Term Note A and the
Credit Agreement.


This Amended and
Restated Term Note A is issued in connection with, and is entitled to the
benefits of, the Credit Agreement which, among other things, contains
provisions for the acceleration of the maturity hereof upon the happening of
certain events, and for the amendment or waiver of certain provisions of the
Credit Agreement, all upon the terms and conditions therein specified.


THIS AMENDED AND
RESTATED TERM NOTE A SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF MINNESOTA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.


	
  

  	
  EAST KANSAS AGRI-ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 



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EXHIBIT
1B

AMENDED & RESTATED

TERM NOTE B


	
  $21,000,000

  	
  Rochester, Minnesota

  
	
   

  	
  June
      , 2006

  



 


FOR VALUE RECEIVED, the undersigned, East Kansas
Agri-Energy, L.L.C., a Kansas limited liability company (“Borrower”),
hereby promises to pay to the order of Home Federal Savings Bank (together with
any subsequent holder hereof, “Lender”)
or its successors and assigns, at Post Office Box 6947, 1016 Civic Center Drive
N.W., Rochester, Minnesota 55903-6947, (a) on the Term Loan B Maturity Date (as
defined in the Master Amended and Restated Credit Agreement between Borrower
and Lender dated as of June     , 2006 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”)) and the
First Supplement to the Master Amended and Restated Credit Agreement (Term
Loans A & B) between Borrower and Lender, dated the same date, the
principal sum of Twenty-One Million and No/100 Dollars ($21,000,000.00) or so
much of the unpaid principal amount of Term Loan B (as defined in the Credit
Agreement) as has advanced by Lender to Borrower pursuant to the Credit
Agreement, and (b) on each date specified in the Credit Agreement prior to the
Term Loan B Maturity Date, the principal amount of Term Loan B payable to
Lender on such date as specified therein, in lawful money of the United States
of America in immediately available funds, and to pay interest from the date
hereof on the principal amount thereof from time to time outstanding, in like
funds, at said office, at the rate or rates per annum and payable on such dates
as provided in the Credit Agreement. Borrower also promises to pay Default
Interest and Additional Interest (each as defined in the Credit Agreement), on
demand, on the terms and conditions set forth in the Credit Agreement.  In addition, should legal action or an
attorney-at-law be utilized to collect any amount due hereunder, Borrower
further promises to pay all costs of collection, including the reasonable
attorneys’ fees of Lender.  THIS AMENDED
AND RESTATED TERM NOTE B AMENDS THE ORIGINAL “CONSTRUCTION AND TERM LOAN NOTE B”
ISSUED ON NOVEMBER 23, 2004, BY BORROWER TO LENDER IN THE SAME AMOUNT, AND
SHALL NOT BE CONSIDERED A NOVATION OF SUCH ORIGINAL NOTE.


All borrowings
evidenced by this Amended and Restated Term Note B and all payments and
prepayments of the principal hereof and the date thereof shall be recorded by
Lender in its internal records; provided, that the failure of Lender to
make such a notation or any error in such notation shall not affect the
obligations of the Borrowers to make the payments of principal and interest in
accordance with the terms of this Note B and the Credit Agreement.


This Amended and
Restated Term Note B is issued in connection with, and is entitled to the
benefits of, the Credit Agreement which, among other things, contains
provisions for the acceleration of the maturity hereof upon the happening of
certain events, and for the amendment or waiver of certain provisions of the
Credit Agreement, all upon the terms and conditions therein specified.


THIS AMENDED AND
RESTATED TERM NOTE B SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF MINNESOTA AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.


	
  

  	
  EAST KANSAS AGRI-ENERGY, L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 



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