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Exhibit 10.1  

 
  EMPLOYMENT AGREEMENT    
    

        This Employment Agreement (the "Agreement") is entered into this 6th day of April, 2005 (the
"Effective Date"), by and among Coastal Banking Company, Inc. (the "Company"), First National
Bank of Nassau County, a national bank organized under the laws of the United States (the "Bank") (the Company and the Bank are collectively referred to
herein as the "Employer"), and Michael G. Sanchez (the "Executive"). 

        WHEREAS,
pursuant to the agreement and plan of merger (the "Merger Agreement") dated as of April 6, 2005 by and between the Company
and First Capital Bank Holding Corporation ("First Capital"), First Capital will merge with and into the Company. 

        WHEREAS,
the Executive is currently a party to an employment agreement dated April 14, 2004 (the "Original Agreement") with First
Capital and the Bank; 

        WHEREAS,
the Executive is willing to terminate his interests and rights under the Original Agreement with First Capital and the Bank in consideration for entering into an employment
agreement with the Employer; 

        WHEREAS,
the Employer desires to secure the continued services of the Executive in accordance herewith, effective upon the date of the consummation of the Merger pursuant to the Merger
Agreement (the "Merger Effective Date"); 

        NOW,
THEREFORE, in consideration of the foregoing, the mutual covenants contained herein including without limitation Section 5(a)(v), $10.00, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree that on the Merger Effective Date: 

        1.    Interpretation with Other Agreements.    This Agreement supersedes the Original Agreement in its entirety and is
the only agreement between Executive and Employer with respect to the terms and conditions of Executive's employment with Employer and supersedes the Original Agreement in its entirety. However, the
following other agreements (or portions of other agreements) shall remain in effect between Employer and Executive: (i) the Stock Option Agreement (as amended) between Executive and First
Capital dated May 26, 1999; and (ii) the Stock Purchase Warrant (as amended) between Executive and First Capital to purchase shares of First Capital's common stock dated May 26,
1999. 

        2.    Employment.    The Employer shall employ the Executive, and the Executive shall serve the Employer, as President
of the Company and President and Chief Executive Officer of the Bank upon the terms and conditions set forth herein. The Executive shall have such authority and responsibilities as are consistent with
his position and which may be set forth in this Agreement or assigned by the Board of Directors of the Company or the Bank (each a "Board of Directors")
from time to time. The Executive shall devote his full business time, attention, skill and efforts to the performance of his duties hereunder, except during periods of illness or periods of vacation
and leaves of absence consistent with the Employer's policy. The Executive may devote reasonable periods of time to perform charitable and other community activities and to manage his personal
investments; provided, however, that such activities will not materially interfere with the performance
of his duties hereunder and will not be in conflict or competitive with, or adverse to, the interests of the Employer. Under no circumstances will the Executive work for any competitor or have any
financial interest in any competitor of the Employer; provided, however, that the Executive may invest in up to 1% of the publicly-traded stock or securities of any company whose stock or securities
are traded on a national exchange. 

        3.    Term.    Unless earlier terminated as provided herein, the Executive's employment under this Agreement shall
commence on the Merger Effective Date and be for a term (the "Term") of five years. Upon the expiration of the Term (and successive one year terms), if
this Agreement is not terminated by either party at least 90 days before it would expire, it shall automatically renew for successive one year extensions until terminated as set forth in this
paragraph or elsewhere in this Agreement. 

 

        4.    Compensation and Benefits.    

        a.    Salary.    Employer shall pay the Executive a base salary at a rate of $160,000 per annum. The Board (or an
appropriate committee of the Board) shall review the Executive's base salary at least annually, focusing primarily upon the Bank's size and performance, and the Board may increase the Executive's base
salary if the Board determines in its sole discretion that an additional increase is appropriate 

        b.    Bonus.    For a given fiscal year during the Term, the Executive shall be eligible to receive a cash bonus
equaling up to 5% of the net pretax income of the Bank for that fiscal year (determined in accordance with generally accepted accounting principals), provided that, (i) the overall condition of
the Bank must be "satisfactory" in the most recent report of the Bank released by the Office of the Comptroller of the Currency; (ii) the Bank's most recent Uniform Financial Institution Rating
shall be at least "2"; and (iii) the Bank shall be "well capitalized" (the "Bonus Plan"). Any bonus payable for a fiscal year pursuant to this
Section 4(b) shall be paid as soon as practicable after April 1 of the succeeding fiscal year. So long as Employer continues the deferred compensation plan for Executive that is
currently in place, then any bonus paid under the Bonus Plan as set forth in this paragraph shall not exceed 50% of Executive's then current base salary. 

        c.    Insurance.    During the Term, Employer shall pay for the premiums necessary to maintain the Executive's life
insurance policy identified as policy number            , in the amount of $1,000,000, with Executive's estate being the beneficiary of 50% of the proceeds and Employer being the beneficiary
of
50% of the proceeds. Additionally, Employer shall pay for the premiums on Executive's Long Term Disability insurance policy in existence on the date hereof identified as policy
number                        . 

        d.    Company Car.    During the Term, Executive shall be entitled to the use of an automobile supplied by Employer.
The automobile shall be of a size and quality mutually agreed upon by the parties and consistent with the make and quality of the automobile used by the Executive on the date hereof. The Employer
shall make a new automobile available for the use of the Executive no less frequently than every three years. 

        e.    Stock Options.    The Executive shall continue to be eligible to participate in the Bank's
long-term equity incentive program and be eligible for the grant of stock options, restricted stock, and other awards thereunder or under any similar plan adopted by the Company, provided
that the grant of any such awards is not required by this Agreement. Nothing herein shall be deemed to preclude the granting to the Executive of warrants or options under a director option plan in
addition to the options granted hereunder. 

        f.    Other Benefits.    In addition to the benefits set forth in Sections 4 (c) through (e) above, the
Executive shall participate in any other retirement, welfare, deferred compensation, life and health insurance, and other benefit plans or programs of the Employer now or hereafter applicable to the
Executive or applicable generally to employees of the Employer, as determined by the Board of Directors of the Company. 

        g.    Expenses.    The Employer shall continue to reimburse the Executive for reasonable travel and other expenses
related to the Executive's duties which are incurred and accounted for in accordance with the Employer's standard business practices. 

        5.    Termination.    

        a.     The
Executive's employment under this Agreement may be terminated prior to the end of the Term only as follows: 

	(i)
	upon
the death of the Executive; 

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	(ii)
	upon
the disability of the Executive for a period of 90 days which, in the opinion of the Board of Directors, renders him unable to perform the essential
functions of his job and for which reasonable accommodation is unavailable. For purposes of this Agreement, a "disability" is defined as a physical or mental impairment that substantially limits one
or more major life activities, and a "reasonable accommodation" is one that does not impose an undue hardship on the Employer;

	(iii)
	upon
the determination of Cause for termination, in which event such employment may be terminated by written notice at the election of the Employer. For purposes of
this Agreement, "Cause" shall consist of any of (A) the commission by the Executive of a willful act (including, without limitation, a dishonest
or fraudulent act) or a grossly negligent act, or the willful or grossly negligent omission to act by the Executive, which is intended to cause, causes, or is reasonably likely to cause material harm
to the Employer (including harm to its business reputation); (B) the indictment of the Executive for the commission or perpetration by the Executive of any felony or any crime involving
dishonesty, moral turpitude or fraud; (C) the material breach by the Executive of this Agreement that, if susceptible of cure, remains uncured 10 days following written notice to the
Executive of such breach; (D) the exhibition by the Executive of a standard of behavior within the scope of his employment that is materially disruptive to the orderly conduct of the Employer's
business operations (including, without limitation, substance abuse or sexual misconduct) to a level which, in the Board of Directors' good faith and reasonable judgment, is materially detrimental to
the Employer's best interest, that, if susceptible of cure, remains uncured 10 days following written notice to the Executive of such specific inappropriate behavior; (E) the receipt of
any form of notice, written or otherwise, that any regulatory agency having jurisdiction over the Employer intends to institute any form of formal or informal
(e.g., a memorandum of understanding which relates to the Executive's performance) regulatory action against the Executive or the Employer if the Board
of Directors in good faith determines that the subject matter of such action involves acts or omissions by or under the supervision of the Executive or that termination of the Executive would advance
the Employer's compliance with the purpose of the action or would assist the Employer in avoiding or reducing the restrictions or adverse effects to the Employer related to the regulatory action; or
(F) the failure of the Executive to render the services hereunder in accordance with an appropriate performance standard determined in the sole discretion of the Board of Directors;

	(iv)
	by
the Executive for Good Reason at any time;

	(v)
	by
the Executive for any reason during the one year period beginning on the second anniversary of the Merger Effective Date,

	(vi)
	by
written notice by the Employer for any reason other than Cause (termination "Without Cause"), or

	(vii)
	by
written notice by the Executive for any reason (a "Resignation"). 

        b.     If
the Executive's employment is terminated because of the Executive's death, the Executive's estate shall receive any sums due him as base salary and/or reimbursement of
expenses through the end of the month during which death occurred, plus any bonus earned or accrued under the Bonus Plan through the date of death (including any amounts awarded for previous years but
which were not yet vested) and a pro rata share of any bonus with respect to the current fiscal year which had been earned as of the date of the
Executive's death. 

        c.     During
the period of any incapacity leading up to the termination of the Executive's employment as a result of disability, the Employer shall continue to pay the
Executive his full base 

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salary
at the rate then in effect and all perquisites and other benefits (other than any bonus) until the Executive becomes eligible for benefits under any long-term disability plan or
insurance program applicable to the Executive (regardless of whether the policy is maintained by the Employer), provided that the amount of any such payments to the Executive shall be reduced by the
sum of the amounts, if any, payable to the Executive for the same period under such disability benefit or pension plan. Furthermore, the Executive shall receive any bonus earned or accrued under the
Bonus Plan through the date of incapacity (including any amounts awarded for previous years but which were not yet vested) and a pro rata share of any
bonus with respect to the current fiscal year which had been earned as of the date of the Executive's incapacity. If Employer does not maintain the policy for Executive pursuant to Section 4.c
above, then although Employer may relieve Executive of his duties due to incapacity or disability, Employer must compensate Executive as if Executive were performing his duties to their fullest
extent, including bonus and increases in compensation. 

        d.     If
the Executive's employment is terminated for Cause as provided above, or in the event of a Resignation (excepting in each instance the circumstances in
Section 5(f)), the Executive shall receive any sums due him as base salary and/or reimbursement of expenses through the date of such termination, but Executive will thereby forfeit any rights
in any unpaid bonus, including, without limitation, any bonus amounts awarded for previous years which were not yet vested and any share of any bonus with respect to the current fiscal year which had
been earned as of the date of such termination or resignation. 

        e.     If
the Executive's employment is terminated Without Cause, the Employer shall: (i) pay to the Executive severance compensation in an amount equal to 100% of his
then-current monthly base salary each month for 24 months from the date of termination, plus any bonus earned or accrued under the Bonus Plan through the date of termination and a  pro rata share of any
bonus with respect to the current fiscal year which had been earned as of the date of the Executive's termination; and
(ii) convey to Executive the vehicle then provided to him pursuant to this Agreement free of any liens. 

        f.      If
Executive's employment is terminated (a) Upon a Change in Control, for any reason upon delivery of notice by Executive to the Employer within a 12 month
period after the occurrence of a Change in Control; (b) for Good Reason pursuant to Section 5(a)(iv); (c) Without Cause or pursuant to a Resignation after a Change in Control; or
(d) if the Executive terminates this Agreement pursuant to Paragraph 5(a)(v), then, in addition to other rights and remedies available in law or equity, the Executive shall be entitled
to the following (i) the Employer shall pay the Executive in cash within 15 days of such termination date any sums due him as base salary and/or reimbursement of expenses through the
date of such termination, plus any bonus earned or accrued under the Bonus Plan through the date of termination (including any amounts awarded for previous years but which were not yet vested) and a  pro rata share of any bonus with respect to the current fiscal year which had been earned as of the date of the Executive's termination (and any
forfeiture in other restrictive provisions applicable to each award shall not apply); (ii) the Employer shall pay the Executive in cash within 15 days of such termination date one lump
sum payment in an amount equal to 2.99 times the sum of (1) the Executive's then current annual base salary, and (2) the average bonuses paid to Executive during the three preceding
fiscal years pursuant to Section 4(b); (iii) the Employer shall immediately convey to Executive the vehicle then provided to him pursuant to this Agreement free of any liens; and
(iv) as soon as possible, but in no event later than 90 days after such termination, the Employer shall cause Executive's accrued benefits under the deferred compensation plan available
to Executive pursuant to Section 4(b) to be paid to Executive. 

        g.     With
the exceptions of the provisions of this Section 5, and the express terms of any benefit plan under which the Executive is a participant, upon termination of
the Executive's 

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employment,
the Employer shall have no obligation to the Executive for, and the Executive waives and relinquishes, any further compensation or benefits (exclusive of COBRA benefits). At the time of
termination of employment, the Executive shall enter into a form of release acknowledging such remaining obligations and discharging the Employer, as well as the Employer's officers, directors and
employees with respect to their actions for or on behalf of the Employer, from any other claims or obligations arising out of or in connection with the Executive's employment by the Employer,
including the circumstances of such termination. 

        h.     Notwithstanding
Section 5(g) of this Agreement, if the Executive's employment is terminated in accordance with Section 5(e) or (f) of this Agreement,
Employer shall at its expense continue for a period of 12 months (the "Continuation Period") on behalf of Executive the benefits provided
(x) to Executive at any time during the 90-day period prior to the Change in Control or at any time thereafter or (y) to other similarly situated employees who continue in
the employ of Employer during the Continuation Period. The coverage and benefits (including deductibles and costs) provided during the Continuation Period shall be no less favorable to Executive than
the most favorable of such coverages and benefits during any of the periods referred to in clauses (x) and (y) above. Employer's obligation with respect to the foregoing benefits shall
be limited to the extent that Executive obtains any such benefits pursuant to a subsequent employer's benefit plans, in which case Employer may reduce the coverage of any benefits it is required to
provide Executive as long as the aggregate coverages and benefits of the combined benefit plans is no less favorable to Executive than the coverages and benefits required to be provided under this
provision. This section shall not be interpreted so as to limit any benefits to which Executive may be entitled under any of Employer's employee benefit plans, programs or practices following
Executive's termination of employment, including without limitation, retiree medical and life insurance benefits. Employer shall not, by virtue of this provision, be under any obligation to continue
to maintain any particular plan or program. 

        i.      In
the event that the Executive's employment is terminated for any reason and the Executive serves as a director of the Company, the Employer, or any other subsidiary of
the Company, the Executive shall (and does hereby) tender his resignation from such positions effective as of the date of termination. 

        j.      The
parties intend that the severance payments and other compensation provided for herein are reasonable compensation for the Executive's services to the Employer and
shall not constitute "excess parachute payments" within the meaning of Section 280G(b) of the Internal Revenue Code of 1986 and any regulations thereunder. In the event that the Employer's
independent accountants acting as auditors for the Employer on the date of a Change in Control determine that the payments provided for herein constitute "excess parachute payments," then the
Executive's compensation payable hereunder shall be decreased, so as to equal an amount that is $1.00 less than three times the Executive's "base amount," as that term is defined in
Section 280G(b) of the Internal Revenue Code. 

        k.     Notwithstanding
anything to the contrary herein, if the Executive is suspended or temporarily prohibited from participating in the conduct of the Employer's affairs by a
notice served under section 8(e)(3) or (g)(1) of Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), the Employer's obligations under this Agreement shall be suspended as of the
date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Employer may in its discretion (i) pay the Executive all or part of the compensation
withheld while the obligations under this Agreement were suspended and (ii) reinstate (in whole or in part) any of such obligations which were suspended. 

        l.      Notwithstanding
anything to the contrary herein, if the Executive is removed or permanently prohibited from participating in the conduct of the Employer's affairs by an
order 

5

 

issued
under section 8 (e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(4) or (g)(1)), all obligations of the Executive under this Agreement shall terminate as of the
effective date of the order, but any vested rights of the parties hereto shall not be affected. 

        m.    Notwithstanding
anything to the contrary herein, if the Employer is in default (as defined in section 3(x)(1) of the Federal Deposit Insurance Act), all
obligations under this Agreement shall terminate as of the date of default, but this paragraph 5(m) shall not affect any vested rights of the parties hereto. 

        n.     Any
payments made to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k)
and any regulations promulgated thereunder. 

        6.    Ownership of Work Product.    The Employer shall own all Work Product arising during the course of the
Executive's employment (prior, present or future). For purposes hereof, "Work Product" shall mean all intellectual property rights, including all Trade
Secrets, U.S. and international copyrights, patentable inventions, and other intellectual property rights, in any programming, documentation, technology, work of authorship or other work product that
relates to the Employer, its business or its customers and that Executive conceives, develops, or delivers to the Employer or that otherwise arises out of the services provided by the Executive to the
Employer hereunder, at any time during his employment, during or outside normal working hours, in or away from the facilities of the Employer, and whether or not requested by the Employer. If the Work
Product contains any materials, programming or intellectual property rights that the Executive conceived or developed prior to, and independent of, the Executive's work for the Employer, the Executive
agrees to identify the pre-existing items to the Employer, and the Executive grants the Employer a worldwide, unrestricted, royalty-free right, including the right to
sublicense such items. The Executive agrees to take such actions and execute such further acknowledgments and assignments as the Employer may reasonably request to give effect to this provision. 

        7.    Protection of Trade Secrets.    The Executive agrees to maintain in strict confidence and, except as necessary
to perform his duties for the Employer, the Executive agrees not to use or disclose any Trade Secrets of the Employer during or after his employment. For the purposes hereof,
"Trade Secret" means information, including, without limitation, technical or non-technical data, a formula, a pattern, a compilation, a
program, a device, a method, a technique, a process, a drawing, financial data, financial plans, product plans, information on customers or a list of actual or potential customers or suppliers, which:
(i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its
disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 

        8.    Protection of Other Confidential Information.    In addition, the Executive agrees to maintain in strict
confidence and, except as necessary to perform his duties for the Employer, not to use or disclose any Confidential Business Information of the Employer during his employment and for a period of
24 months following termination of the Executive's employment. "Confidential Business Information" shall mean any internal,
non-public information (other than Trade Secrets already addressed above) concerning the Employer's financial position and results of operations (including revenues, assets, net income,
etc.); annual and long-range business plans; product or service plans; marketing plans and methods; training, educational and administrative manuals; customer and supplier information and
purchase histories; and employee lists. The provisions of Sections 6 and 7 above shall also apply to protect Trade Secrets and Confidential Business Information of third parties provided to the
Employer under an obligation of secrecy. 

        9.    Return of Materials.    The Executive shall surrender to the Employer, promptly upon its request and in any
event upon termination of the Executive's employment, all media, documents, notebooks, 

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computer
programs, handbooks, data files, models, samples, price lists, drawings, customer lists, prospect data, or other material of any nature whatsoever (in tangible or electronic form) in the
Executive's possession or control, including all copies thereof, relating to the Employer, its business, or its customers. Upon the request of the Employer, Executive shall certify in writing
compliance with the foregoing requirement. 

        10.    Restrictive Covenants.    

        a.    No Solicitation of Customers.    During the Executive's employment with the Employer and for a period of
12 months thereafter, the Executive shall not (except on behalf of or with the prior written consent of the Employer), either directly or indirectly, on the Executive's own behalf or in the
service or on behalf of others, solicit or attempt to solicit Customers to induce or encourage them to acquire or obtain from anyone other than the Employer or its subsidiaries any product or service
competitive with or as a substitute for any of the Employer's Products. For purposes of this Section, "Customer" refers to any person or group of
persons with whom the Executive had direct material contact with regard to
the selling, delivery, or support of the Employer's Products, including servicing such person's or group's account, during the period of 12 months preceding the termination date of Executive's
employment. The "Employer's Products" refers to the products and services that the Employer or any of its subsidiaries or affiliates offered or sold
within six months of the he termination date of Executive's employment. This restriction does not apply after a Change in Control. 

        b.    No Recruitment of Personnel.    During the Executive's employment with the Employer and for a period of
12 months thereafter, the Executive shall not, either directly or indirectly, on the Executive's own behalf or in the service or on behalf of others, solicit or induce any employee of or
consultant to the Employer or any of its subsidiaries or affiliates to leave his or her position with the Employer (or the subsidiary or affiliate) for the purpose of providing banking services to
another business, or recruit or attempt to recruit such persons to accept employment or any other position with another business that is providing banking services. This restriction does not apply
after a Change in Control. 

        c.    Non-Competition Agreement.    During the Executive's employment with the Employer and for a period
of 12 months thereafter, the Executive shall not (without the prior written consent of the Employer) compete with the Employer or any of its affiliates by, directly or indirectly, forming,
serving as an organizer, director, officer or employee of, or consultant to, or acquiring or maintaining more than a 1% passive investment in, a depository financial institution or holding company
therefor if such depository institution or holding company has one or more offices or branches located within a radius of 35 miles from the Employer's headquarters. 

        d.    Independent Provisions.    The provisions in each of the above Sections 10(a), 10(b), and 10(c) are independent,
and the unenforceability of any one provision shall not affect the enforceability of any other provision. 

        11.    Successors; Binding Agreement.    This Agreement shall be binding upon and shall inure to the benefit of the
Employer and its successors and assigns. Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives,
except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative. 

        12.    Notice.    For the purposes of this Agreement, notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective
addresses last given by each party to the other; provided, however, that all notices to the Employer
shall be directed to the attention of the Employer with a copy to the Secretary of the 

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Employer.
All notices and communications shall be deemed to have been received on the date of delivery thereof. 

        13.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Florida without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in State of Florida. 

        14.    Non-Waiver.    Failure of the Employer to enforce any of the provisions of this Agreement or any
rights with respect thereto shall in no way be considered to be a waiver of such provisions or rights, or in any way affect the validity of this Agreement. 

        15.    Enforcement.    The Executive agrees that in the event of any breach or threatened breach by the Executive of
any covenant contained in Section 7, 8, 10(a), 10(b), or 10(c) hereof, the resulting injuries to the Employer would be difficult or impossible to estimate accurately, even though irreparable
injury or damages would certainly result. Accordingly, an award of legal damages, if without other relief, would be inadequate to protect the Employer. The Executive, therefore, agrees that in the
event of any such breach, the Employer shall be entitled to obtain from a court of competent jurisdiction an injunction to restrain the breach or anticipated breach of any such covenant, and to obtain
any other available legal, equitable, statutory, or contractual relief. Should the Employer have cause to seek such relief, no bond shall be required from the Employer, and the Executive shall pay all
attorney's fees and court costs which the Employer may incur to the extent the Employer prevails in its enforcement action. 

        16.    Saving Clause.    The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision or clause of this Agreement, or portion thereof, shall be held by any
court or other tribunal of competent jurisdiction to be illegal, void, or unenforceable in such jurisdiction, the remainder of such provision shall not be thereby affected and shall be given full
effect, without regard to the invalid portion. It is the intention of the parties that, if any court construes any provision or clause of this Agreement, or any portion thereof, to be illegal, void,
or unenforceable because of the duration of such provision or the area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision, and, in its reduced form,
such provision shall then be enforceable and shall be enforced. 

        17.    Certain Definitions.    

        a.     "Change in Control" shall mean the occurrence during the Term of any of the following events (except for the consummation
of the transactions contemplated by the Merger Agreement which shall not be deemed to be a "Change in Control"), unless such event is a result of a Non-Control Transaction: 

	(i)
	The
individuals who, as of the Merger Effective Date, are members of the Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least 50% of the Board of Directors of the Company; provided,  however, that if the
election, or nomination for election by the Company's shareholders, of any new director was approved in advance by a vote of at
least 50% of the Incumbent Board, such new director shall, for purposes of this Agreement, be considered as a member of the Incumbent Board; provided,  further, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an
actual or threatened election contest, or other actual or threatened solicitation of proxies, proxy contest, or consents by or on behalf of any person other than the Board of Directors of the Company,
including by reason of any agreement intended to avoid or settle any election contest or proxy contest. 

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	(ii)
	An
acquisition (other than directly from the Company) of any voting securities of the Company (the "Voting Securities")
by any "Person" (as the term "person" is used for purposes of Section 13(d) or 14(d) of the Exchange Act) immediately after which such Person has
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting
power of the Company's then outstanding Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities which are acquired in a Non-Control Acquisition shall not constitute an acquisition which would cause a Change in Control.

	(iii)
	Consummation
of: (i) a merger, consolidation, or reorganization involving the Company; (ii) a complete liquidation or dissolution of the Company; or
(iii) the sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary).

	(iv)
	A
notice of an application is filed with the Office of Comptroller of the Currency (the "OCC") or the Federal Reserve
Board or any other bank or thrift regulatory approval (or notice of no disapproval) is granted by the Federal Reserve, the OCC, the Federal Deposit Insurance Corporation, or any other regulatory
authority for permission to acquire control of the Company or any of its banking subsidiaries; provided that if the application is filed in connection with a transaction which has been approved by the
Board, then the Change in Control shall not be deemed to occur until consummation of the transaction. 

        b.     "Good Reason" shall mean the occurrence after a Change in Control of any of the events or conditions described in
subsections (i) through (viii) hereof: 

	(i)
	a
change in the Executive's status, title, position or responsibilities (including reporting responsibilities) which, in the Executive's reasonable judgment, represents
an adverse change from his status, title, position or responsibilities as in effect at any time within ninety days preceding the date of a Change in Control or at any time thereafter; the assignment
to the Executive of any duties or responsibilities which, in the Executive's reasonable judgment, are inconsistent with his status, title, position or responsibilities as in effect at any time within
ninety days preceding the date of a Change in Control or at any time thereafter; any removal of the Executive from or failure to reappoint or reelect him to any of such offices or positions, except in
connection with the termination of his employment for disability or Cause, as a result of his death, or by the Executive other than for Good Reason, or any other change in condition or circumstances
that in the Executive's reasonable judgment makes it materially more difficult for the Executive to carry out the duties and responsibilities of his office than existed at any time within ninety days
preceding the date of Change in Control or at any time thereafter;

	(ii)
	a
reduction in the Executive's base salary or any failure to pay the Executive any compensation or benefits to which he is entitled within 10 days of the date
due;

	(iii)
	the
Employer's requiring the Executive to be based at any place outside a 30-mile radius from the executive offices occupied by the Executive immediately
prior to the Change in Control, except for reasonably required travel on the Employer's business which is not materially greater than such travel requirements prior to the Change in Control;

	(iv)
	the
failure by the Employer to (A) continue in effect (without reduction in benefit level and/or reward opportunities) any material compensation or employee
benefit plan in which the Executive was participating at any time within 90 days preceding the date of a Change in Control or at any time thereafter, unless such plan is replaced with a plan
that provides substantially equivalent compensation or benefits to the Executive, or 

9

 

(B) provide
the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each other
employee benefit plan, program and practice in which the Executive was participating at any time within 90 days preceding the date of a Change in Control or at any time thereafter; 

	(v)
	the
insolvency or the filing (by any party, including the Company or the Employer) of a petition for bankruptcy of the Company or the Employer, which petition is not
dismissed within 60 days;

	(vi)
	any
material breach by the Employer of any material provision of this Agreement;

	(vii)
	any
purported termination of the Executive's employment for Cause by the Employer which does not comply with the terms of this Agreement; or

	(viii)
	the
failure of the Employer to obtain an agreement, satisfactory to the Executive, from any successor or assign to assume and agree to perform this Agreement, as
contemplated in Section 11 hereof. 

        Any
event or condition described in clause (i) through (viii) above which occurs prior to a Change in Control but which the Executive reasonably demonstrates (A) was
at the request of a third party, or (B) otherwise arose in connection with, or in anticipation of, a Change in Control which actually occurs, shall constitute Good Reason for purposes of this
Agreement, notwithstanding that it occurred prior to the Change in Control. The Executive's right to terminate his employment for Good Reason shall not be affected by his incapacity due to physical or
mental illness. 

        c.     "Non-Control Transaction" shall mean a transaction described below: 

	(i)
	the
shareholders of the Company, immediately before such merger, consolidation or reorganization, own, directly or indirectly, immediately following such merger,
consolidation or reorganization, at least 50% of the combined voting power of the outstanding voting securities of the corporation resulting from such merger, consolidation or reorganization (the
"Surviving Corporation") in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation
or reorganization; and

	(ii)
	immediately
following such merger, consolidation or reorganization, the number of directors on the board of directors of the Surviving Corporation who were members of
the Incumbent Board shall at least equal the number of directors who were affiliated with or appointed by the other party to the merger, consolidation or reorganization. 

        d.     "Notice of Termination" shall mean a written notice of termination from the Employer or the Executive which specifies an
effective date of termination, indicates the specific termination provision in this Agreement relied upon, and, in the case of a termination for Good Reason or for Cause, sets
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. 

        18.    Entire Agreement.    This Agreement constitutes the entire agreement between the parties hereto and supersedes
all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. 

        19.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument. 

10

 

        IN
WITNESS WHEREOF, the Employer has caused this Agreement to be executed and its seal to be affixed hereunto by its officers thereunto duly authorized, and the Executive has signed and
sealed this Agreement, effective as of the date first above written. 

	 	 	EMPLOYER
	

 	
 	

COASTAL BANKING COMPANY, INC.
	

 	
 	

By:	
 	

 
	 	 	 	 	
 Name:

Title:
	

 	
 	
FIRST NATIONAL BANK OF NASSAU COUNTY
	

 	
 	

By:	
 	

/s/  SUELLEN RODEFFER GARNER      
 Name: Suellen Rodeffer Garner

Title: Chairman of the Board
	

 	
 	
EXECUTIVE
	

 	
 	

/s/  MICHAEL G. SANCHEZ      
 Name: Michael G. Sanchez

11

QuickLinks

EMPLOYMENT AGREEMENT<Page>

                                                                     EXHIBIT 4.2

                         EAST KANSAS AGRI-ENERGY, L.L.C.
                             SUBSCRIPTION AGREEMENT
                                Membership Units
                                 $1,100 PER UNIT

                    MINIMUM INVESTMENT OF 10 UNITS ($11,000)
                      1 UNIT INCREMENTS THEREAFTER ($1,100)

The undersigned subscriber, desiring to become a member of East Kansas
Agri-Energy, L.L.C. ("EKAE"), a Kansas limited liability company, with its
principal place of business at 210 1/2 East 4th Avenue, P.O. Box 225, Garnett,
Kansas 66032, hereby subscribes for the purchase of the membership interests of
EKAE, 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       _______________________________________
             Home Telephone              _______________________________________
             Business Telephone          _______________________________________
             Email                       _______________________________________

B.   NUMBER OF UNITS PURCHASED. You must purchase at least 10 units and
additional increments of at least 1 unit thereafter.

          -------------------

          -------------------

C.   PURCHASE PRICE. Indicate the dollar amount of your investment.

<Table>
<S><C>
   1. TOTAL PURCHASE PRICE          =        2. TEN PERCENT (10%)          +      3. NINETY PERCENT (90%)
($1,100 Per Unit multiplied by                 1ST INSTALLMENT                         2ND INSTALLMENT
the number in box B above.)            (10% of the Total Purchase Price)      (90%  of the Total Purchase Price)
----------------------------------     ----------------------------------     ----------------------------------
                                    =                                      +
----------------------------------     ----------------------------------     ----------------------------------
</Table>

D.   GENERAL INSTRUCTIONS FOR SUBSCRIBERS:

You should read the Prospectus dated [Date of Effectiveness] (the "Prospectus")
in its entirety including financial statements and exhibits for a complete
explanation of an investment in EKAE. To subscribe, you must:

     1.   Complete all information required in this Subscription Agreement, and
date and sign this Subscription Agreement at page 5.

     2.   Complete all information required by the Member Signature Page of the
Operating Agreement, and date and sign the Member Signature Page (the last page
attached to this Subscription Agreement).

     3.   Immediately provide your personal (or business) check for the first
installment of ten percent (10%) of your investment amount made payable to "The
Mission Bank -- ESCROW AGENT FOR EKAE, LLC." You will determine this amount in
box C.2 on page 1 of this Subscription Agreement. If, prior to your initial
investment, we have obtained sufficient equity proceeds to release funds from
escrow and EKAE has issued its demand notice, the full purchase price of the
units (Box C.1 on page 1) will be due immediately at the time of your
investment. You should make your check out for the amount indicated in Box C.1.,
payable to EKAE and you can skip to Item 7 below.

                                       1
<Page>

     4.   Execute the Promissory Note and Security Agreement on page 7 of this
Subscription Agreement evidencing your commitment to pay the remaining ninety
percent (90%) due for the Units that is attached to this Subscription Agreement
and your agreement to grant EKAE a security interest in your membership units.

     5.   Deliver each of the original executed documents referenced in Items 1,
2, and 4 of these Instructions, together with your personal check described in
Item 3 of these Instructions to:

                                The Mission Bank
                 East Kansas Agri-Energy, L.L.C. Escrow Account
                               5201 Johnson Drive
                                Mission KS 66205

     6.   Secure an additional personal (or business) check for the second
installment of ninety percent (90%) of your investment amount made payable to
"THE MISSION BANK -- ESCROW AGENT FOR EKAE" in satisfaction of the Promissory
Note and Security Agreement. You will determine this amount in box C.3 on
page 1 of this Subscription Agreement. Deliver this check to the same address
set forth above in Instruction 5 within twenty (20) days of the date of
EKAE's written notice that its sales of Units have exceeded the Minimum
Escrow Deposit of $2,000,900. If you fail to pay the second installment
pursuant to the Promissory Note and Security Agreement, EKAE 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 investing
after EKAE has issued its demand notice, you do not need to complete the
Promissory Note and Security Agreement and the amount of your personal or
business check completed pursuant to Item 3 should be for the full amount of
the purchase price in Box C.1.

Your funds will be placed in EKAE's escrow account at The Mission Bank, and
the funds will be released to EKAE or returned to you in accordance with the
escrow arrangements described in the Prospectus. If EKAE rejects your
subscription, your Subscription Agreement and investment will be returned to
you within 30 days of such rejection, plus nominal interest, minus escrow
fees. EKAE may not consider the acceptance or rejection of your subscription
until a future date near the end of this Offering.

     7.   Deliver each of the original executed documents referenced in Items 1
and 2, along with your personal or business check described in Item 3 of these
Instructions to EKAE at 210 1/2 East 4th Avenue, P.O. Box 225, Garnett, Kansas
66032. If, at the time of your initial investment, EKAE has already issued its
demand notice and/or has released funds from escrow, your funds will be
immediately released to EKAE upon EKAE's acceptance of this subscription
agreement and receipt of your check.

YOU MAY DIRECT YOUR QUESTIONS TO WILLIAM R. PRACHT, PRESIDENT OF EKAE AT (785)
448-2888.

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.
          (__) Individual
          (__) Joint Tenants with Right of Survivorship (Both signatures must
               appear in Item 7)
          (__) Corporation or Partnership (Corporate Resolutions or Partnership
               Agreement must be enclosed)
          (__) IRA
          (__) KEOGH
          (__) Pension or Profit Sharing Plan
          (__) Trust
               Trustee's Name: __________________________________________

               Trust Date: ______________________________________________
          (__) Other: Provide detailed information in the space immediately
               below.

                                       2
<Page>

     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 back up withholding. KEOGHS should provide the
          taxpayer identification number of the account and the social security
          number of the accountholder. Trusts should provide their taxpayer
          identification number. Custodians should provide the minor's social
          security number. All individual subscribers and IRA subscribers should
          provide their social security number. Other entities should provide
          their taxpayer identification number.

          (__) Check box if you are a non-resident alien

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

          (__) Check this box if you are subject to backup withholding

          Subscriber's Name and Social Security No.
                                                   ----------------------------

          Joint Subscriber's  Name and Social Security No.
                                                          ---------------------

          Taxpayer Identification No.
                                               ---------------------------

     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 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 EKAE unless you meet one,
          or more, of the suitability tests 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 above will be applied on a joint basis.

          (__) I (We) participate in physical labor, operations or management of
               a farming operation and file a Schedule F as part of our annual
               Form 1040 or 1041 filing with the Internal Revenue Service;

          (__) I (We) are a duly authorized officer of a family farm
               corporation, member or manager of a family farm limited liability
               company, general manager of a family farm limited partnership or
               trustee of a family trust actively engaged in farming;

          (__) I (We) own agricultural land and receive, as rent, a share of the
               crops or animals raised on the land;

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

          (__) I (We) have a net worth of at least $150,000, exclusive of home,
               furnishings and automobiles.

                                       3
<Page>

     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 EKAE that
          he, she or it:
          a.   has received a copy of EKAE's Prospectus;
          b.   has been informed that the Units of EKAE are offered and sold in
               reliance upon a federal securities registration, a Kansas and a
               Missouri securities registrations, and exemptions from securities
               registrations in various other states, and understands that the
               Units to be issued pursuant to this subscription agreement can
               only be sold to a person meeting requirements of suitability;
          c.   has been informed that the securities purchased pursuant to this
               Subscription Agreement have not been registered under the
               securities laws of any state other than the States of Missouri
               and Kansas, and that EKAE is relying in part upon the
               representations of the undersigned Subscriber contained herein;
          d.   has been informed that the securities subscribed for have not
               been approved or disapproved by the Kansas or Missouri Securities
               Departments or any other regulatory authority, nor has any
               regulatory authority passed upon the accuracy or adequacy of the
               Prospectus;
          e.   intends to acquire the Units for his/her/its own account without
               a view to public distribution or resale and that he/she/it 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;
          f.   understands that there is no present market for EKAE's membership
               units, that the membership 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 membership units;
          g.   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;
          h.   has received a copy of the EKAE Operating Agreement, and
               understands that upon closing the escrow by EKAE, the subscriber
               and the membership units will be bound by the provisions of the
               Operating Agreement which contains, among other things,
               provisions that restrict the transfer of membership units;
          i.   understands that the Units are subject to substantial
               restrictions on transfer under state securities laws along with
               restrictions in the EKAE Operating Agreement and agrees that if
               the membership units or any part thereof are sold or distributed
               in the future, the subscriber shall sell or distribute them
               pursuant to the terms of the Operating Agreement, and the
               requirements of the Securities Act of 1933, as amended, and
               applicable state securities laws;
          j.   meets the suitability test marked in Item 5 above and is capable
               of bearing the economic risk of this investment, including the
               possible total loss of the investment;
          k.   understands that EKAE will place a restrictive legend on any
               certificate representing any unit containing substantially the
               following language as the same may be amended by the Directors of
               EKAE in their sole discretion:

                    THE TRANSFERABILITY OF THE UNITS REPRESENTED BY THIS
                    CERTIFICATE IS RESTRICTED. SUCH UNITS MAY NOT BE SOLD,
                    ASSIGNED, OR TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE,
                    TRANSFEREE, OR ENDORSEE THEREOF 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 STATE AND FEDERAL LAW AND THE TERMS AND
                    CONDITIONS SET FORTH IN THE AMENDED AND RESTATED OPERATING
                    AGREEMENT AS AGREED TO BY EACH MEMBER.

                    THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                    SOLD, OFFERED FOR SALE, OR TRANSFERRED IN THE ABSENCE OF
                    EITHER AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF
                    1933, AS AMENDED, AND UNDER APPLICABLE STATE

                                       4
<Page>

                    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.

          l.   understands that, to enforce the above legend, EKAE may place a
               stop transfer order with its registrar and stock transfer agent
               (if any) covering all certificates representing any of the
               membership units;
          m.   has knowledge and experience in business and financial matters 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 can bear the economic risk of the purchase of
               Units including the total loss of the undersigned's investment;
          n.   may not transfer or assign this subscription agreement, or any of
               the subscriber's interest herein;
          o.   has written his, her, or its correct taxpayer identification
               number under Item 3 on this subscription agreement;
          p.   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 (p) should be crossed out if the
               backup withholding box in Item 2 is checked);
          q.   understands that execution of the attached Promissory Note and
               Security Agreement will allow EKAE or its assigns to pursue the
               obligor for payment of the amount due thereon by any legal means,
               including, but not limited to, acquisition of a judgment against
               the obligor in the event that the subscriber defaults on that
               Promissory Note and Security Agreement; and
          r.   Acknowledges that EKAE may retain possession of certificates
               representing subscriber's Units to perfect its security interest
               in those Units.

SIGNATURE OF SUBSCRIBER/JOINT SUBSCRIBER:

DATE:
             ------------------------------

<Table>
<Caption>
INDIVIDUALS:                                            ENTITIES:
<S>                                                     <C>

----------------------------------------------------    --------------------------------------------------
  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
</Table>

                                       5
<Page>

         ACCEPTANCE OF SUBSCRIPTION BY EAST KANSAS AGRI-ENERGY, L.L.C.:

East Kansas Agri-Energy, L.L.C. hereby accepts the subscription for the above
Units.

Dated this           day of                        , 200    .
           ---------        -----------------------     ----

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

By:
    -------------------------------------

Its:
    -------------------------------------

                                       6
<Page>

                     PROMISSORY NOTE AND SECURITY AGREEMENT

Date of Subscription Agreement:                                    , 200  .
                                -----------------------------------     --

                                 $1,100 PER UNIT
 MINIMUM INVESTMENT OF 10 UNITS ($11,000), 1 UNIT INCREMENTS THEREAFTER ($1,100)

                      Number of Units subscribed
---------------------

                      Total Purchase Price ($1,100 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 East
Kansas Agri-Energy, L.L.C., a Kansas limited liability company ("EKAE"), at its
principal office located 210 1/2 East 4th Avenue, PO Box 225, Garnett, Kansas
66032, or at such other place as required by EKAE, the Principal Balance set
forth above in one lump sum to be paid without interest within 20 days following
the call of the EKAE Board of Directors, as described in the 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 EKAE.

The undersigned agrees to pay to EKAE 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 Kansas.

The provisions of this Promissory Note and Security Agreement shall inure to the
benefit of EKAE and its successors and assigns, which expressly reserves the
right to pursue the undersigned for payment of the amount due thereon 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 grants to EKAE, and its successors and assigns ("Secured
Party"), a purchase money security interest in all of the undersigned's
Membership Units of EKAE now owned or hereafter acquired. This security interest
is granted as non-exclusive collateral to secure payment and performance on the
obligation owed Secured Party from the undersigned evidenced by 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.

Dated:              , 200  .
OBLIGOR/DEBTOR:                           JOINT OBLIGOR/DEBTOR:

--------------------------------------    --------------------------------------
Printed or Typed Name of Obligor          Printed or Typed Name of Joint Obligor

By:                                       By:
    ----------------------------------    --------------------------------------
    [Signature)                           (Signature)

--------------------------------------
Officer Title if Obligor is an Entity

--------------------------------------

--------------------------------------
Address of Obligor

                                       7
<Page>

                              MEMBER SIGNATURE PAGE

                                     ADDENDA
                                     TO THE
                         EAST KANSAS AGRI-ENERGY, L.L.C.
                    AMENDED AND RESTATED OPERATING AGREEMENT

     The undersigned does hereby represent and warrant that the undersigned, as
a condition to becoming a Member in East Kansas Agri-Energy, L.L.C. (the
"Company"), has received a copy of the Amended and Restated Operating Agreement,
dated March 13, 2002, and, if applicable, all amendments and modifications
thereto, and does hereby agree that the undersigned, along with the other
parties to the Amended and Restated Operating Agreement, shall be subject to and
comply with all terms and conditions of said 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 that the
undersigned is and shall be bound by all of the provisions of said Agreement
from and after the date of execution hereof.

<Table>
<Caption>
INDIVIDUALS:                                            ENTITIES:
<S>                                                     <C>

----------------------------------------------------    --------------------------------------------------
  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
</Table>

Agreed and accepted on behalf of the
Company and its Members:

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

By:
    ------------------------------------------------

Its:
    ------------------------------------------------

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