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 Ethanol”), 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 Ethanol, 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 90%
of
our outstanding membership units. We currently have 920 units outstanding.
Accordingly, assuming that we sell the minimum number of 7,200 units in this
offering, you may not hold more than 7,308 units. The maximum number of units
to
be sold in the offering is 17,000.
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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 Ethanol.
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 Second
Amended and Restated 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 grants 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 Ethanol 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 Ethanol's written notice. If
you
fail to pay the second installment pursuant to the Promissory Note and Security
Agreement, Prairie Creek Ethanol 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 Ethanol’s escrow account at Iowa State
Bank of Algona. The funds will be released to Prairie Creek Ethanol or returned
to you in accordance with the escrow arrangements described in the Prospectus.
Prairie Creek Ethanol may, in its sole discretion, reject or accept any part
or
all of your subscription. If Prairie Creek Ethanol rejects your subscription,
your Subscription Agreement and investment will be promptly returned to you,
plus any nominal interest. Prairie Creek Ethanol may not consider the acceptance
or rejection of your subscription until a future date near the end of this
offering. Iowa
State Bank is acting only as an escrow agent in connection with the offering
described herein, and has not endorsed, recommended or guaranteed the purchase,
value or repayment of the units.
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 Second
Amended and Restated Operating Agreement attached to this Subscription Agreement
as Exhibit A.
2. Immediately
provide your personal (or business) check for the entire amount of your
investment (as determined in box C.1 on page 1) made payable to “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 Ethanol may, in its sole discretion, reject or accept
any part or all of your subscription. If Prairie Creek Ethanol rejects your
subscription, your Subscription Agreement and investment will be returned to
you
promptly, plus any nominal interest. Prairie Creek Ethanol may not consider
the
acceptance or rejection of your subscription until a future date near the end
of
this offering.
2
You
may
direct your questions to any of our directors listed below or to Prairie Creek
Ethanol 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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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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_________________________________________________________
_________________________________________________________
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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.
____________________________________
Joint
Subscriber's Social Security No.
____________________________________
Taxpayer
Identification
No.
____________________________________
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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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4.
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State
of Residence.
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State
of
Principal
Residence:
__________________________________
State
where driver's license is
issued:
__________________________________
State
where resident income taxes are filed:
__________________________________
State(s)
in which you have maintained your principal residence during the past three
years:
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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 Ethanol unless you meet one of
the
following suitability tests set forth below. Subscribers residing
in
states other
than
Iowa or Kansas must meet either standard a. or standard b. below.
Subscribers residing in Iowa must meet standard c. below, while
subscribers residing in Kansas must meet standard d. 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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3
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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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b.
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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c.
o
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I
(We) reside in Iowa and I (we) have a net worth of $70,000 (exclusive
of
home, auto and furnishings) and annual income of $70,000 or, in the
alternative, a net worth of $250,000 (exclusive of home, auto and
furnishings); or
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d.
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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Subscriber's
Representations and Warranties.
You must 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 Ethanol that he, she or it:
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______
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______
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a.
has received a copy of Prairie Creek Ethanol'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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______
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b.
has been informed that the units of Prairie Creek Ethanol are offered
and
sold in reliance upon a federal securities registration; state
registrations in Florida, Illinois, Iowa, Kansas, Missouri, 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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______
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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 Florida, Illinois, Iowa, Kansas, Missouri,
South
Dakota and Wisconsin and that Prairie Creek Ethanol is relying
in part
upon the representations of the undersigned Subscriber contained
herein;
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______
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______
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d.
has been informed that the securities subscribed for have not been
approved or disapproved by the SEC, or the Florida, Illinois, Iowa,
Kansas, Missouri, 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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______
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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;
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______
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______
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f.
understands that there is no present market for Prairie Creek Ethanol'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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______
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g.
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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______
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h.
has received a copy of the Prairie Creek Ethanol, LLC Second Amended
and
Restated Operating Agreement, dated May 3, 2007, and understands
that upon
closing the escrow by Prairie Creek Ethanol, the subscriber and
the
membership units will be bound by the provisions of the Second
Amended and
Restated Operating Agreement which contains, among other things,
provisions that restrict the transfer of membership units;
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______
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______
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i.
understands that the units are subject to substantial restrictions
on
transfer under certain tax and securities laws along with restrictions
in
the Prairie Creek Ethanol, LLC Second Amended and Restated 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 Second 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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______
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j.
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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4
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______
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______
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k.
understands that Prairie Creek Ethanol 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 Ethanol 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.
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______
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______
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l. understands
that, to enforce the above legend, Prairie Creek Ethanol 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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______
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______
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m.
may not transfer or assign this Subscription Agreement, or any
of the
subscriber's interest herein without the prior written consent
of Prairie
Creek Ethanol;
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______
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______
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n.
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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______
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o.
is not subject to backup 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 (o) should
be
crossed out if the backup withholding box in Item E.2 is checked);
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______
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______
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p.
understands that execution of the attached Promissory Note and
Security
Agreement will allow Prairie Creek Ethanol 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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______
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q.
acknowledges that Prairie Creek Ethanol may retain possession
of
certificates representing subscriber’s units to perfect its security
interest in those
units.
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______
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______
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r. acknowledges
that Iowa State Bank is acting only as an escrow agent in connection
with
the offering of the units, and has not endorsed, recommended
or guaranteed
the purchase, value or repayment of such
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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| __________________________________________ | __________________________________________ | |
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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
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Print
Name and Title of Officer
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| __________________________________________ | __________________________________________ | |
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Name
of Joint Individual Subscriber (Please Print)
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Signature
of Officer
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| __________________________________________ | ||
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Signature
of Joint Individual Subscriber
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ACCEPTANCE
OF SUBSCRIPTION BY PRAIRIE CREEK ETHANOL, LLC:
Prairie
Creek Ethanol, LLC hereby accepts Subscriber's subscription for
units.
Dated
this _____
day of
_______________________,
200_____.
PRAIRIE
CREEK ETHANOL, LLC
By:
Its:
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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(
)
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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 Ethanol"),
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 Ethanol, 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 Ethanol 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 Ethanol.
The
undersigned agrees to pay to Prairie Creek Ethanol 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 Ethanol 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 Ethanol, and its successors and assigns
(“Secured Party”), a purchase money security interest in all of the
undersigned’s membership units of Prairie Creek Ethanol 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
Exhibit
A
MEMBERS
SIGNATURE PAGE
ADDENDA
TO
THE
SECOND
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 Second Amended and Restated Operating Agreement of Prairie Creek
Ethanol, LLC (“Operating Agreement”), dated May 3, 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.
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Individuals
|
Entities
|
|
| __________________________________________ | __________________________________________ | |
|
Name
of Individual Member (Please Print)
|
Name
of Entity (Please Print)
|
|
| __________________________________________ | __________________________________________ | |
|
Signature
of Individual
|
Print
Name and Title of Officer
|
|
| __________________________________________ | __________________________________________ | |
|
Name
of Joint Individual Member (Please Print)
|
Signature
of Officer
|
|
| __________________________________________ | ||
|
Signature
of Joint Individual Member
|
Agreed
and accepted on behalf of the
Company
and its Members:
PRAIRIE
CREEK ETHANOL, LLC
BY:
ITS:
8
