PRAIRIE CREEK ETHANOL, LLC SUBSCRIPTION AGREEMENT Limited Liability Company Membership Units $5,000 per Unit Minimum Investment of 2 Units ($10,000)
PRAIRIE
CREEK ETHANOL, LLC
Limited
Liability Company Membership Units
$5,000
per Unit
Minimum
Investment of 2 Units ($10,000)
1
Unit Increments Thereafter ($5,000)
The
undersigned subscriber ("Subscriber"), desiring to become a member of Prairie
Creek Ethanol, LLC (“Prairie Creek”), an Iowa limited liability company, with
its principal place of business at 000 X. Xxxxxx Xxxxxx, XX Xxx 000, Xxxxxxxxx,
Xxxx 00000 hereby subscribes for the purchase of membership units of Prairie
Creek, and agrees to pay the related purchase price, identified
below.
A. SUBSCRIBER
INFORMATION. Please
print your individual or entity name and address. If we accept your
subscription, the units will be titled in the name of the subscriber as it
appears below. Joint subscribers should provide both names. Your name and
address will be recorded exactly as printed below. Please provide your home,
business and/or mobile telephone number. If desired, please also provide your
e-mail address.
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1.
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Subscriber's
Printed Name
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_________________________________________________________
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2.
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Title,
if applicable
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_________________________________________________________
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3.
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Subscriber's
Address
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Street
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_________________________________________________________
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City,
State, Zip Code
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_________________________________________________________
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4.
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E-mail
Address (optional)
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_________________________________________________________
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5.
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Home
Telephone Number
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_________________________________________________________
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6.
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Business
Telephone Number
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_________________________________________________________
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7.
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Mobile
Telephone Number
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_________________________________________________________
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B. NUMBER
OF UNITS PURCHASED. You
must
purchase at least 2 units. Your ownership interest may not exceed 30% of our
outstanding membership units. We currently have 1,523 units outstanding.
Accordingly, assuming that we sell the minimum number of 11,800 units in this
offering, you may not purchase more than 3,996 units. The maximum number of
units to be sold in the offering is 27,600.
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units
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C. PURCHASE
PRICE. Indicate
the dollar amount of your investment (minimum investment is
$10,000).
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1.
Total
Purchase Price
($5,000
per unit multiplied
by
number of units)
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=
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(10%
of Total Purchase Price)
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+
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3.
2nd
Installment
(90%
of Total Purchase Price)
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=
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+
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D. GENERAL
INSTRUCTIONS FOR SUBSCRIBERS:
You
should read the Prospectus dated [DATE OF EFFECTIVENESS] (the "Prospectus")
in
its entirety including the exhibits for a complete explanation of an investment
in Prairie Creek.
INSTRUCTIONS
IF YOU ARE SUBSCRIBING PRIOR
TO THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If
you
are subscribing prior to the Company’s release of funds from escrow, you must
follow the instructions contained in paragraphs 1 through 5 below:
1. Complete
all information required in this Subscription Agreement, and date and sign
the
Subscription Agreement on page 6 and the Member Signature Page to our Operating
Agreement attached to this Subscription Agreement as Exhibit A.
1
2. Immediately
provide a personal (or business) check for the first installment of ten percent
(10%) of your investment amount. The check should be made payable to
“Iowa
State Bank of Algona, escrow agent for Prairie Creek Ethanol,
LLC.”
You
will determine this amount in box C.2 on page 1 of
this
Subscription Agreement.
3. Execute
the Promissory Note and Security Agreement on page 7 of
this
Subscription Agreement evidencing your commitment to pay the remaining ninety
percent (90%) due for the units. The Promissory Note and Security Agreement
is
attached to this Subscription Agreement and grant Prairie Creek Ethanol, LLC
a
security interest in your units.
4.
Deliver
the original executed documents referenced in paragraphs 1 and 3 of these
instructions, together with a personal or business check as described in
Paragraph 2 of these instructions to:
Prairie
Creek Ethanol, LLC
000
X.
Xxxxxx Xxxxxx, XX Xxx 000
Xxxxxxxxx,
Xxxx 00000
5. Within
20
days of written notice from Prairie Creek that your subscription has been
accepted, you must remit an additional personal (or business) check for the
second installment of ninety percent (90%) of your investment amount made
payable to “Iowa
State Bank of Algona, escrow agent for Prairie Creek Ethanol,
LLC”
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. You must deliver this check to the same address set
forth above in paragraph 4 within twenty (20) days of the date of Prairie
Creek's written notice. If you fail to pay the second installment pursuant
to
the Promissory Note and Security Agreement, Prairie Creek shall be entitled
to
retain your first installment and to seek other damages, as provided in the
Promissory Note and Security Agreement. This means that if you are unable to
pay
the 90% balance of your investment amount within 20 days of our notice, you
may
have to forfeit the 10% cash deposit.
Your
funds will be placed in Prairie Creek’s escrow account at Iowa State Bank of
Algona. The funds will be released to Prairie Creek or returned to you in
accordance with the escrow arrangements described in the Prospectus. Prairie
Creek may, in its sole discretion, reject or accept any part or all of your
subscription. If Prairie Creek rejects your subscription, your Subscription
Agreement and investment will be promptly returned to you, plus any nominal
interest. Prairie Creek may not consider the acceptance or rejection of your
subscription until a future date near the end of this offering.
INSTRUCTIONS
IF YOU ARE SUBSCRIBING AFTER
THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If
you
are subscribing after the Company’s release of funds from escrow, you must
follow the instructions contained in paragraphs 1 through 3 below:
1. Complete
all information required in this Subscription Agreement, and date and sign
the
Subscription Agreement on page 6 and the Member Signature Page to our Operating
Agreement attached to this Subscription Agreement as Exhibit A.
2. Immediately
provide your personal (or business) check for the entire amount of your
investment (as determined in box C.1 on page 1) made payable to “Prairie
Creek Ethanol, LLC.”
3.
Deliver
the original executed documents referenced in paragraph 1 of these instructions,
together with your personal or business check as described in paragraph 2
to:
Prairie
Creek Ethanol, LLC
000
X.
Xxxxxx Xxxxxx, XX Xxx 000
Xxxxxxxxx,
Xxxx 00000
If
you
are subscribing after we have released funds from escrow and we accept your
investment, your funds will be immediately at-risk as described in the
Prospectus. Prairie Creek may, in its sole discretion, reject or accept any
part
or all of your subscription. If Prairie Creek rejects your subscription, your
Subscription Agreement and investment will be returned to you promptly, plus
any
nominal interest. Prairie Creek may not consider the acceptance or rejection
of
your subscription until a future date near the end of this offering.
You
may
direct your questions to either of our directors listed below or to Prairie
Creek at (000)
000-0000.
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NAME
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POSITION
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PHONE
NUMBER
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Xxxx
Xxxxx
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Senior
Vice President of Project Development
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(000)-000-0000
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Xxxx
Xxxxxx
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Chairman,
President and Director
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(000)-000-0000
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Xxxxxx
Xxxxxx
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Vice
Chairman, Vice President and Director
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(000)-000-0000
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Xxxxx
Xxxxxxxx
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Vice
President of Commodities
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(000)-000-0000
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Xxxx
Nail
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Vice
President of Marketing
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(000)-000-0000
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Xxxx
Xxxxxxxxx
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Vice
President of Development
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(000)-000-0000
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Xxxx
Xxxxxx
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Vice
President of Transportation
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(000)-000-0000
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Xxxx
Xxxxxxx
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Treasurer
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(000)-000-0000
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Xxxx
Xxxxxx
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Secretary
and Director
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(000)-000-0000
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2
E. Additional
Subscriber Information. Subscriber,
named above, certifies the following under penalties of perjury:
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1.
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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.
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o
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Individual
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o
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Joint
Tenants with Right of Survivorship (Both signatures must appear on
page
6.)
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o
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Corporation,
Limited Liability Company or Partnership (Corporate Resolutions,
Operating
Agreement or Partnership Agreement must be
enclosed.)
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o
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Trust
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| Trustee’s Name: __________________________________________ |
| Trust Date: ______________________________________________ |
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o
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Other: Provide detailed information in the space immediately below. |
| _______________________________________________________ |
| _______________________________________________________ |
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2.
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Subscriber's
Taxpayer Information.
Check the appropriate box if you are a non-resident alien, a U.S.
Citizen
residing outside the United States, and/or subject to backup withholding.
All individual subscribers should provide their Social Security Numbers.
Trusts should provide the trust's taxpayer identification number.
Custodians should provide the minor's Social Security Number. Other
entities should provide the entity's taxpayer identification
number.
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o
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Check
box if you are a non-resident alien
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o
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Check
box if you are a U.S. citizen residing outside of the United
States
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o
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Check
this box if you are subject to backup
withholding
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Subscriber's
Social Security No.
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___________________________________ |
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Joint
Subscriber's Social Security No.
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___________________________________ |
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Taxpayer
Identification No.
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___________________________________ |
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3.
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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.
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Address:
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_____________________________________________________________ |
| _____________________________________________________________ |
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4.
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State
of Residence.
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State
of Principal Residence:
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_________________________________________ |
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State
where driver's license is issued:
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_________________________________________ |
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State
where resident income taxes are filed:
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_________________________________________ |
State(s)
in which you have maintained your principal residence during the past three
years:
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a.
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b.
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c.
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5.
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Suitability
Standards.
You cannot invest in Prairie Creek unless you meet one of the following
suitability tests (a or b) set forth below. Please review the suitability
tests and check the box next to the following suitability test that
you
meet. For husbands and wives purchasing jointly, the tests below
will be
applied on a joint basis.
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a. o
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I
(We) have annual income from whatever source of at least $45,000
and
a
net worth of at least $45,000, exclusive of home, furnishings and
automobiles; or
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3
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b. o
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I
(We) have a net worth of at least $100,000, exclusive of home, furnishings
and automobiles;
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c. o
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I
(We) have a net worth of $150,000, exclusive of home, home furnishings,
and automobiles;
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d.
o
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I
(We) reside in Iowa and I (we) have a net worth of $60,000 (exclusive
of
home, auto and furnishings) and annual income of $60,000 or, in the
alternative, a net worth of $150,000 (exclusive of home, auto and
furnishings); or
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e.
o
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I
(We) reside in Kansas and I (we) have a net worth of $60,000 (exclusive
of
home, auto and furnishings) and annual income of $60,000 or, in the
alternative, a net worth of $225,000 (exclusive of home, auto and
furnishings).
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6.
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Agricultural
Producer.
Please indicate below whether the subscribing person or entity meets
the
following definition of an Agricultural Producer: Persons or entities,
including farmers, ranchers, loggers, agricultural harvesters and
fishermen, that engage in the production or harvesting of an agricultural
product. Producers may or may not own the land or other production
resources, but must have majority ownership interest in the agricultural
product to which value is added as a result of the project. Examples
of
agricultural producers include but are not limited to: a cattle or
hog
feeder that has a majority interest in the livestock that is fed,
slaughtered and sold as beef or pork products or corn grower that
has a
majority interest in the corn produced that is then converted into
corn
meal.
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a. o
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I
(we) qualify as an Agricultural Producer based on the above definition.
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b. o
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I
(we) do
not
qualify as an Agricultural Producer based on the above definition.
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7.
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Subscriber's
Representations and Warranties.
You must read and certify your representations and warranties by
placing
your initials where indicated and by signing and dating this Subscription
Agreement. Joint
subscribers are also required to initial and sign as
indicated.
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(Initial
here) (Joint initials) By signing below the subscriber represents and warrants
to Prairie Creek that he, she or it:
| _____ |
_____
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a.
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has
received a copy of Prairie Creek's Prospectus dated [DATE OF
EFFECTIVENESS] and the exhibits thereto or has received notice that
this
sale has been made pursuant to a registration statement in which
a final
prospectus would have been required to have been delivered in the
absence
of Rule 172;
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| _____ |
_____
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b.
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has
been informed that the units of Prairie Creek are offered and sold
in
reliance upon a federal securities registration; state registrations
in
Florida, Illinois, Iowa, Kansas, Missouri, Nebraska, South Dakota
and
Wisconsin; 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;
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| _____ |
_____
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c.
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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 Florida, Illinois, Iowa, Kansas, Missouri, Nebraska, South
Dakota and Wisconsin and that Prairie Creek is relying in part upon
the
representations of the undersigned Subscriber contained
herein;
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| _____ |
_____
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d.
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has
been informed that the securities subscribed for have not been approved
or
disapproved by the SEC, or the Florida, Illinois, Iowa, Kansas, Missouri,
Nebraska, South Dakota and Wisconsin Securities Departments or any
other
regulatory authority, nor has any regulatory authority passed upon
the
accuracy or adequacy of the
Prospectus;
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| _____ |
_____
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e.
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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;
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| _____ |
_____
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f.
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understands
that there is no present market for Prairie Creek'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;
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| _____ |
_____
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g.
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has
been encouraged to seek the advice of his legal counsel and accountants
or
other financial advisers with respect to investor-specific tax and/or
other considerations relating to the purchase and ownership of
units;
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| _____ | _____ |
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h.
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has
received a copy of the Prairie Creek Amended and Restated Operating
Agreement, dated March 13, 2007, and understands that upon closing
the
escrow by Prairie Creek, the subscriber and the membership units
will be
bound by the provisions of the Amended and Restated Operating Agreement
which contains, among other things, provisions that restrict the
transfer
of membership units;
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4
| _____ |
_____
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i.
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understands
that the units are subject to substantial restrictions on transfer
under
certain tax and securities laws along with restrictions in the Prairie
Creek 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 Amended and
Restated
Operating Agreement, and the requirements of the Securities Act of
1933,
as amended, and applicable tax and securities laws;
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| _____ | _____ |
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j.
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meets
the suitability test marked in Item E.5 above and is capable of bearing
the economic risk of this investment, including the possible total
loss of
the investment;
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| _____ |
_____
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k.
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understands
that Prairie Creek 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 Prairie Creek in their
sole
discretion:
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THE
TRANSFERABILITY OF THE MEMBERSHIP UNITS REPRESENTED BY THIS DOCUMENT 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, THE TERMS AND CONDITIONS SET FORTH IN THE OPERATING
AGREEMENT OF THE COMPANY, AS AMENDED FROM TIME TO TIME.
THE
UNITS
REPRESENTED BY THIS DOCUMENT MAY NOT BE SOLD, OFFERED FOR SALE, OR TRANSFERRED
IN ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE
SECURITIES LAWS.
| _____ | _____ | l. | understands that, to enforce the above legend, Prairie Creek may place a stop transfer order with its registrar and stock transfer agent (if any) covering all certificates representing any of the membership units; |
| _____ | _____ |
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m.
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may
not transfer or assign this Subscription Agreement, or any of the
subscriber's interest herein without the prior written consent of
Prairie
Creek;
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| _____ | _____ |
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n.
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has
written his, her, or its correct taxpayer identification number under
Item
E.2 on this Subscription Agreement;
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| _____ | _____ |
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o.
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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 E.2 is checked);
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| _____ |
_____
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p.
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understands
that execution of the attached Promissory Note and Security Agreement
will
allow Prairie Creek 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
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| _____ |
_____
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q.
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acknowledges
that Prairie Creek may retain possession of certificates representing
subscriber’s units to perfect its security interest in those
units.
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5
Signature
of Subscriber/Joint Subscriber:
Date: _______________________________
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Individuals:
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Entities:
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Name
of Individual Subscriber (Please Print)
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Name
of Entity (Please Print)
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||
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Signature
of Individual
|
Print
Name and Title of Officer
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Name of Joint Individual Subscriber (Please Print) |
Signature of Officer |
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Signature of Joint Individual Subscriber |
ACCEPTANCE OF SUBSCRIPTION BY PRAIRIE CREEK ETHANOL, LLC:
Prairie
Creek Ethanol, LLC hereby accepts Subscriber's subscription
for __________
units.
Dated
this ______ day
of
________________________________,
200____.
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PRAIRIE
CREEK ETHANOL, LLC
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| By: | ||
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| Its: | ||
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6
PROMISSORY
NOTE
AND SECURITY AGREEMENT
Date
of
Subscription Agreement: ___________________________________, 200__.
$5,000
per Unit
Minimum
Investment of 2 Units ($10,000); Units Sold in 1 Unit Increments Thereafter
($5,000 each)
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Number
of Units Subscribed
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Total
Purchase Price ($5,000 per unit multiplied by number of units
subscribed)
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(
)
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Less
Initial Payment (10% of Principal Amount)
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Principal
Balance
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FOR
VALUE
RECEIVED, the undersigned hereby promises to pay to the order of Prairie Creek
Ethanol, LLC, an Iowa limited liability company ("Prairie Creek"), at its
principal office located at 000 X. Xxxxxx Xxxxxx, XX Xxx 000, Xxxxxxxxx, Xxxx
00000, or at such other place as required by Prairie Creek, the Principal
Balance set forth above in one lump sum to be paid without interest within
20
days following the call of the Prairie Creek 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
Prairie Creek.
The
undersigned agrees to pay to Prairie Creek on demand, all costs and expenses
incurred to collect any indebtedness evidenced by this Promissory Note and
Security Agreement, including, without limitation, reasonable attorneys' fees.
This Promissory Note and Security Agreement may not be modified orally and
shall
in all respects be governed by, construed, and enforced in accordance with
the
laws of the State of Iowa.
The
provisions of this Promissory Note and Security Agreement shall inure to the
benefit of Prairie Creek 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 Prairie Creek, and its successors and assigns (“Secured
Party”), a purchase money security interest in all of the undersigned’s
membership units of Prairie Creek 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) |
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Officer Title if Obligor is an Entity |
||
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||
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Address
of Obligor
7
Exhibit
A
MEMBERS
SIGNATURE PAGE
ADDENDA
TO
THE
AMENDED
AND RESTATED OPERATING AGREEMENT OF
PRAIRIE
CREEK ETHANOL, LLC
The
undersigned does hereby represent and warrant that the undersigned, as a
condition to becoming a Member of Prairie Creek Ethanol, LLC, has received
a
copy of the Amended and Restated Operating Agreement of Prairie Creek Ethanol,
LLC (“Operating Agreement”), dated March 13, 2007, and, if applicable, all
amendments and modifications thereto, and does hereby agree that the
undersigned, along with the other parties to the Operating Agreement, shall
be
subject to and comply with all terms and conditions of said Operating Agreement
in all respects as if the undersigned had executed said Operating Agreement
on
the original date thereof and that the undersigned is and shall be bound by
all
of the provisions of said Operating Agreement from and after the date of
execution hereof.
| Individuals | Entities | |
|
Name of Individual Member (Please Print)
|
Name of Entity (Please Print) |
|
|
Signature of Individual
|
Print Name and Title of Officer
|
|
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Name of Joint Individual Member (Please
Print)
|
Signature of Officer |
|
|
Signature of Joint Individual Member
|
Agreed
and accepted on behalf of the
Company
and its Members:
PRAIRIE
CREEK ETHANOL, LLC
BY:______________________________________
ITS:______________________________________
