EAST KANSAS AGRI-ENERGY, L.L.C.
SUBSCRIPTION AGREEMENT
Membership Units
BEFORE [DATE], 2002 AFTER [DATE], 2002 AND BEFORE AFTER [DATE], 2002
[DATE], 2002
OFFERING PRICE $1,000 $1,100 $1,200
PER UNIT
10 UNIT MINIMUM
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 20477 S.W. Florida Road, Westphalia, Kansas
66093, 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 _______________________________________
B. NUMBER OF UNITS PURCHASED. You must purchase at least 10 units. Your
ownership interest may not exceed 30% of all of our outstanding membership
units. Accordingly, assuming that we sell the minimum number of 9,000 Units in
this Offering, you may not purchase more than 3,066 Units. We presently have
1220 Units outstanding.
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C. PURCHASE PRICE. Indicate the dollar amount of your investment.
1. TOTAL PURCHASE PRICE = 2. TEN PERCENT (10%) 1ST + 3. NINETY PERCENT (90%) 2ND
(The Offering Price Per Unit from INSTALLMENT INSTALLMENT
the appropriate time period above (10% of the Total Purchase Price) (90% of the Total Purchase
multiplied by the number in box B Price)
above.)
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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 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
"GARNETT STATE SAVINGS BANK -- ESCROW AGENT FOR EKAE." You will determine this
amount in box C.2 on page 1 of this Subscription Agreement.
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4. Execute the Promissory Note 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.
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:
Garnett State Savings Bank
5th and Oak
P.O. Box 329
Garnett, Kansas 66032
6. Secure an additional personal (or business) check for the
second installment of ninety percent (90%) of your investment amount made
payable to "GARNETT STATE SAVINGS BANK -- ESCROW AGENT FOR EKAE" in satisfaction
of the Promissory Note. 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
$9,000,000. If you fail to pay the second installment pursuant to the Promissory
Note, EKAE shall be entitled to retain your first installment and to seek other
damages, as provided in the Promissory Note.
Your funds will be placed in EKAE's escrow account at Garnett State Savings
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.
YOU MAY DIRECT YOUR QUESTIONS TO ONE OF OUR DIRECTORS LISTED BELOW OR TO EKAE AT
(785) 448-9697.
DIRECTOR TELEPHONE NUMBER DIRECTOR TELEPHONE NUMBER
-------- ---------------- -------- ----------------
William R. Pracht (785) 489-2413 Roger Brummel (785) 448-2995
Daniel V. Morgan (785) 867-2318 Jill A. Zimmerman (785) 448-5968
Scott A. Burkdoll (785) 869-3860 Glenn A. Caldwell (785) 448-4174
Daniel L. Guetterman (913) 533-2443 Donald S. Meats (620) 964-2642
Douglas L. Strickler (620) 365-2739 James Westagard (785) 835-6496
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: _________________________________________
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/ / Other: Provide detailed information in the space
immediately below.
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 Social Security No. _____________________________
Joint Subscriber's 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:
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a. b. c.
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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) have annual income from whatever source of at
least $30,000 and a net worth of at least $30,000,
exclusive of home, furnishings and automobiles; or
/ / I (We) have a net worth of at least $75,000,
exclusive of home, furnishings and automobiles.
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:
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a. has received a copy of and is familiar with and
understands EKAE's Prospectus, and all modifications or
supplements thereto;
b. has relied solely upon the Prospectus in evaluating the
purchase of the Units;
c. has been informed that the Units of EKAE are offered
and sold in reliance upon a federal securities
registration, Kansas and 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;
d. 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 Kansas and Missouri, and that EKAE is relying
in part upon the representations of the undersigned
Subscriber contained herein;
e. has been informed that the securities subscribed for
have not been approved or disapproved by the Securities
and Exchange Commission or 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;
f. 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;
g. 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;
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 6 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 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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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 3 is checked); and
q. understands that execution of the attached Promissory
Note will allow EKAE or its assigns to pursue the
obligor for payment of the amount due thereon by any
legal means in the event that the subscriber defaults on
that Promissory Note.
SIGNATURE OF SUBSCRIBER/JOINT SUBSCRIBER:
DATE: _______________________________
INDIVIDUALS: ENTITIES:
______________________________________________________ _________________________________________
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
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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: _____________________________________
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PROMISSORY NOTE
Date of Subscription Agreement: ___________________________________, 200__.
IF BEFORE [DATE], 2002 IF AFTER [DATE], 2002 AND IF AFTER [DATE], 2002
BEFORE [DATE], 2002
OFFERING PRICE $1,000 $1,100 $1,200
PER UNIT
Number of Units subscribed for at / / $1,000 per Unit,
/ / $1,100 Per Unit, / / $1,200 Per Unit (check box
preceding price corresponding to purchase date)
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Total Purchase Price (price per Unit multiplied by number
- --------------------- of Units subscribed)
( ) 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 East
Kansas Agri-Energy, L.L.C., a Kansas limited liability company ("EKAE"), at its
principal office located at 20477 S.W. Florida Road, Westphalia, Kansas 66093,
or at such other place as required by EKAE, the Principal Balance set forth
above, either in installments or 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 Promissory
Note 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 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, including,
without limitation, reasonable attorneys' fees. This Promissory Note 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 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.
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.
Dated: , 200 .
OBLIGOR: JOINT OBLIGOR:
_______________________________________________ __________________________________________
Printed or Typed Name of Joint Obligor Printed or Typed Name of Obligor
By: ___________________________________________ By: _____________________________________
(Signature) (Signature)
_______________________________________________
Officer Title if Obligor is an Entity
_______________________________________________
_______________________________________________
Address of Obligor
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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.
INDIVIDUALS: ENTITIES:
__________________________________________________________ ___________________________________________
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
Agreed and accepted on behalf of the
Company and its Members:
EAST KANSAS AGRI-ENERGY, L.L.C.
By: _________________________________________
Its: ________________________________________