Document:

GOLDEN GRAIN ENERGY,
    L.L.C.

	
      SUBSCRIPTION
  AGREEMENT

	
      Membership Units

	
       

	
      $1.00 per Class A Membership
      Unit

	
       

	
      10,000 Unit Minimum Purchase
      ($10,000),

	
      1,000 Unit Blocks Thereafter
      ($1,000)

	
       

	
      The undersigned subscriber, desiring to become a member of
      Golden Grain Energy, L.L.C. ("GGE"), an Iowa limited liability company,
      with its principal place of business at 951 N. Linn Avenue, P.O. Box 435,
      New Hampton, Iowa 50659, hereby subscribes for the purchase of the
      membership interests of GGE, 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 10,000 units and additional blocks of at least 1,000 units
      thereafter.  Your ownership interest may not exceed 40% of all of our
      outstanding membership units.  Accordingly, assuming that we sell the
      minimum number of 19,250,000 Units in this Offering, you may not purchase
      more than 7,700,000 Units.

	 	 	 

	 	 ________________________________ 

	
       

	
       

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

	
       

	
      1. Total Purchase Price

      ($1.00 Per Unit multiplied by the number in box B
      above.)
	
      =
	
      2. Ten Percent (10%) 1st
      Installment

      (10% of the Total Purchase Price)
	
      +
	
      3. Ninety Percent (90%) 2nd
      Installment

      (90% of the Total Purchase Price)

	
       
	
       
	
       
	
       
	
       

	
      _________________________
	
      =
	
      _________________________
	
      +
	
      _________________________

	
       

	
      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
      GGE.  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
      "State Bank of Lawler -- Escrow Agent for GGE, LLC." 
      You will determine this amount in box C.2 on page 1 of this Subscription
      Agreement.

	 

	 	1	 

	 
      

    

	
       
    

	
       

	
                  
      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 GGE 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:

	
       

	
      State Bank of
Lawler

	
      Golden Grain Energy, LLC Escrow
      Account

	
      P.O. Box 269

	
      Lawler, IA 
  53212

	
       

	
                  
      6.           
      Secure an additional personal (or business) check for the second
      installment of ninety percent (90%) of your investment amount made payable
      to "State Bank of Lawler -- Escrow Agent for GGE" 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 thirty (30) days of the date of GGE's written notice
      that its sales of Units have exceeded the Minimum Escrow Deposit of
      $19,250,000.  If you fail to pay the second installment pursuant to
      the Promissory Note and Security Agreement, GGE shall be entitled to
      retain your first installment and to seek other damages, as provided in
      the Promissory Note and Security Agreement.

	
       

	
      Your funds will be placed in GGE's escrow account at State
      Bank of Lawler, and the funds will be released to GGE or returned to you
      in accordance with the escrow arrangements described in the
      Prospectus.  If GGE 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.  GGE 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 GGE at (641)
  394-4059.

	
       

	
      Director
	
      Telephone Number
	
       
	
      Director
	
      Telephone Number

	
      Walter Wendland
	
      (563) 237-5901
	
       
	
      Randy Liddle
	
      (319) 231-5590

	
      Stanley Laures
	
      (641) 394-4059
	
       
	
      Jim Boeding
	
      (563) 382-3000

	
      Dave Sovereign
	
      (563) 547-5033
	
       
	
      Stephen Eastman
	
      (641) 985-2147

	
      Ron Pumphrey
	
      (641) 394-3052
	
       
	
      Willis Hansen
 	
      (800) 328-3312

	
       

	
       

	
      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:
      ______________________________________________

	 

	 	2	 

	 

	
      

       
    

	
       
	
       
	
      [  ]
	
      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 backup 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:

	
                     
      

	
      a. ________________________
	
      b. ________________________
	
      c. ________________________

	
       

	
       

	
       
	
      5.
	
      Suitability Standards.  To be able to invest
      in GGE, you must (i) meet at least one of the five suitability tests set
      forth under the heading "Farming/Income/Net Worth Suitability"
      below, and (ii) have qualifying net worth as defined under the heading
      "Net Worth Qualification" 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.

	
       

	
       	
       	
      Farming/Income/Net

      
	
       
	
       
	
      [  ]
	
      I (We) am (are) a natural person(s) or a fiduciary for a
      natural person(s) who regularly participate(s) in physical labor,
      operation, or management in a farming operation and file(s) a schedule F as
      part of my (our) annual form 1040 or 1041 filing with Internal Revenue
      Service;

	
       

	
       	
       	
      [  ]	
      I (We) am (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;
	
       	
       	
       	
       
	
      3

      

    
	
       	
       	
       	
       
	
       	
       	
      [  ]	
      I (We) am (are) a natural person(s) (or a general
      partnership in which all partners are natural persons) owning agricultural
      land and receiving as rent a  share of the crops or the animals
      raised on the land;
	
       	
       	
       	
       
	
       	
       	
      [  ]	
      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
	
       	
       	
       	
       
	
       
	
       
	
      [  ]
	
      I (We) have a net worth of at least $100,000, exclusive of
      home, furnishings and automobiles.

	
       

	
       	
       	
      You must also be able to attest to the first of the two
      statements below regarding net worth qualification, by checking the
      appropriate box below, to be eligible to invest in this offering. No
      investor(s) may invest more that 10% of his or her net worth (exclusive of
      home, furnishings and automobiles) in GGE. 
	
       	
       	
       
	
       	
       	
      Net Worth Qualification
	
       	
       	
       	
       
	
       	
       	
      [  ]	
      My (Our) net worth exclusive of home, furnishings and
      automobiles exceeds 10 times the amount of my (our) investment in GGE.
	
       	
       	
       	
       
	
       	
       	
      [  ]	
      My (Our) net worth  exclusive of home, furnishings and
      automobiles does not exceed 10 times the amount of my (our) investment in
      GGE.
	
       	
       	
       	
       
	
       
	
      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 GGE that he, she or it:

	 

	
       
	
       
	
      a.
	
      has received a copy of GGE's
  Prospectus;

	
       
	
       
	
      b.
	
      has been informed that the Units of GGE are offered and
      sold in reliance upon a federal securities registration, an Iowa  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 State of Iowa ,
      and that GGE 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 Iowa  Securities Department 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 GGE'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 received a copy of the GGE Operating Agreement, and
      understands that upon closing the escrow by GGE, 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; 

	
       	
       	
       	
       
	
      4

      

    
	
       	
       	
       	
       
	
       
	
       
	
      h.
	
      understands that the Units are subject to substantial
      restrictions on transfer under state securities laws along with
      restrictions in the GGE 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;
  

	
       
	
       
	
      i.
	
      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;

	
       
	
       
	
      j.
	
      understands that GGE 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 GGE 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  APPLICABLE STATE SECURITIES LAWS, OR AN
      OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION IS
      EXEMPT FROM REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS.

	
       
	
       
	
      k.
	
      understands that, to enforce the above legend, GGE may
      place a stop transfer order with its registrar and stock transfer agent
      (if any) covering all certificates representing any of the membership
      units;

	
       
	
       
	
      l.
	
      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;
  

	
       
	
       
	
      m.
	
      may not transfer or assign this subscription agreement, or
      any of the subscriber's interest herein; 

	
       
	
       
	
      n.
	
      has written his, her, or its correct taxpayer
      identification number under Item E.2 on this subscription agreement;
      

	
       
	
       
	
      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); 

	
       
	
       
	
      p.
	
      understands that execution of the attached Promissory Note
      and Security Agreement will allow GGE 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

	
       
	
       
	
      q.
	
      acknowledges that GGE may retain possession of
      certificates representing subscriber's Units to perfect its security
      interest in those Units.

	
       

      5

      

    

 

	
      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 

	
       

	
       

	
      ACCEPTANCE OF SUBSCRIPTION BY GOLDEN
      GRAIN ENERGY, L.L.C.:

	
       

	
      Golden Grain Energy, L.L.C. hereby accepts the
      subscription for the above Units.

	
       

	
      Dated this
                  day
      of
                                                  ,
      200      
.

	
       

	
       

	
      GOLDEN GRAIN ENERGY,
L.L.C.

	
       

	
       

	
      By:
  _____________________________________

	
       

	
       

	
      Its:
  _____________________________________

	 

	 	6	 

	 
      

    

	
      

    

 

	
PROMISSORY NOTE AND SECURITY AGREEMENT

	
 

	
Date of Subscription Agreement: ___________________________________, 200__.

	 

	
$1.00 per Class A Membership Unit

	 

	
10,000 Unit Minimum Purchase ($10,000), 1,000 Unit Blocks Thereafter ($1,000)

	
 

	
                             
	
Number of Units subscribed

	 

	
                             
	
Total Purchase Price ($1.00 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 Golden Grain Energy, L.L.C., an Iowa limited liability company ("GGE"), at its principal office located 951 N. Linn Avenue, P.O. Box 435, New Hampton, Iowa 50659, or at such other place as required by GGE, the Principal Balance set forth above in one lump sum to be paid without interest within 30 days following the call of the GGE 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 GGE. 

	 

	
The undersigned agrees to pay to GGE 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 GGE 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 GGE, and its successors and assigns ("Secured Party"), a purchase money security interest in all of the undersigned's Membership Units of GGE 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 Joint Obligor	
 
	Printed or Typed Name of  Obligor
	 	
 
	
	 	
 
	
	
By:
	

(Signature)	

 
	
By:
	

(Signature)

	 	
 
	
	

Officer Title if Obligor is an Entity

	

 
	
 

	

 
	

 
	
 

	

Address of Obligor

	

 
	
 

						

	 

	 	7	 

	 

	

	
MEMBER SIGNATURE PAGE

	
 

	
ADDENDA

	
TO THE

	
GOLDEN GRAIN 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 Golden Grain Energy, L.L.C. (the "Company"), has received a copy of the Amended and Restated Operating Agreement, dated August 21, 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:

	
 

	
GOLDEN GRAIN ENERGY, L.L.C.

	
 

	
 

	
By: _________________________________________

	
 

	
 

	
Its: _________________________________________ESCROW AGREEMENT

	
 

	
 

	
            THIS ESCROW AGREEMENT (this "Agreement") is made this 7th day of
May, 2003, by and between Golden Grain Energy, L.L.C., an Iowa limited liability company, with its principal offices in New Hampton, Iowa, ("GGE"), and State Bank of Lawler, with its principal offices in Lawler, Iowa, as escrow agent (the “Escrow Agent”).  

	
 

	
W I T N E S S E T H:

	
 

	
           
WHEREAS, GGE and Escrow Agent desire to amend and restate the agreement made on
November 7, 2002 as set forth herein:
	
 
	
            WHEREAS, GGE proposes to offer at least 19,250,000 of its Membership Units (the "Units") at a price of $1.00 per Unit, in minimum blocks of ten-thousand (10,000) Units in an offering in the
state of Iowa and possibly other states, made pursuant to an registration under the provisions of the Securities Act of 1933, as amended (the "Offering"); 

	
 

	
            WHEREAS, GGE will file a registration statement (as may be amended) (the "Registration Statement") to register the Units with the Securities and Exchange Commission, the
state of Iowa,  and possibly other states; 

	
 

	
            WHEREAS, GGE will allow investors in the Offering to deliver the purchase price of the subscribed Units in ten percent (10%) and ninety percent (90%) installments; and 

	
 

	
            WHEREAS, GGE desires to comply with the requirements of the Securities Act of 1933 and of the various state regulatory statutes and regulations, and desires to protect the investors in the Offering by providing, under the terms and conditions herein set forth, for the return to subscribers of the money which they may pay on account of purchases of Units in the Offering if the Minimum Escrow Deposit (hereinafter defined) is not deposited with the Escrow Agent.

	
 

	
            NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows:

	
 

	
            1.         Acceptance of Appointment.  State Bank of Lawler hereby agrees to act as escrow agent under this Agreement.  The Escrow Agent shall have no duty to enforce any provision hereof requiring performance by any other party hereunder.

	
 

	
            2.         Establishment of Escrow Account.  An escrow account (the "Escrow Account") is hereby established with the Escrow Agent for the benefit of the investors in the Offering.  Except as specifically provided in this Agreement, the Escrow Account shall be created and maintained subject to the customary rules and regulations of the Escrow Agent pertaining to such accounts.

	
 

	
            3.         Ownership of Escrow Account.  Until such time as the funds deposited in the Escrow Account (the "Deposited Funds") shall equal the Minimum Escrow Deposit (as hereinafter defined), all funds deposited in the Escrow Account by GGE shall not become the property of GGE or be subject to the debts of GGE or any other person but shall be held by the Escrow Agent solely for the benefit of the investors who have purchased Units in the Offering.

	 

	
            4.         Deposit of Proceeds.  All proceeds from sales of Units in the Offering shall be delivered by 

	 

	 	1	 

	 

	

	
GGE to the Escrow Agent, within forty-eight hours of the receipt thereof from investors, endorsed (if appropriate) to the order of the Escrow Agent, together with an appropriate written statement setting forth name, address and social security number of each person purchasing Units, the number of Units purchased, and the amount paid by each such purchaser.  Any such proceeds deposited with the Escrow Agent in the form of uncollected checks shall be promptly presented by the Escrow Agent for collection through customary banking and clearing house facilities.  As the proceeds of each sale are deposited with the Escrow Agent, GGE shall reserve the number of Units confirmed to the purchaser thereof in connection with such sale.    

	
 

	
            5.         Investment of Escrow Account.  The Deposited Funds shall be credited by Escrow Agent and recorded in the Escrow Account.  The Escrow Agent shall be permitted, and is hereby authorized to deposit transfer, hold and invest all funds received under this Agreement, including principal and interest, in the  Goldman Sachs Financial Square Treasury Obligations Fund -- Administration Shares (CUSIP # 38141W315)  (the "Fund") at Escrow Agent to yield rates of return as set forth in the Fund's prospectus.  Any interest income received by Escrow Agent from the fund shall be reinvested and shall become part of the Deposited Funds.  Escrow Agent shall pay interest on termination of this Agreement as provided in paragraphs 7 and 10 hereof.   

	
 

	
            6.         Termination of Escrow.  This Agreement and the Escrow created hereunder shall be terminated as provided in paragraph 7 hereof or as of the date (the "Termination Date") one year following the date upon which the Securities and Exchange Commission authorizes the Offering (the "Offering's Effective Date").  GGE shall notify Escrow Agent of the Offering's Effective Date within thirty (30) days of the receipt of notice of the Offering's Effective Date from the Securities and Exchange Commission.    In no event shall the Termination Date be later than June 30, 2005.

	
 

	
            7.         Disposition of Deposited Funds.  The Escrow Agent shall have the following duties and obligations under this Agreement:

	
 

	
            A.        The Escrow Agent shall send a written notice acknowledging the receipt of the Deposited Funds every seven days to GGE.  The Escrow Agent shall give GGE prompt written notice when the Deposited Funds total $500,000,  $1.0 million, $1.5 million, and $1.9 million.

	
 

	
            B.         The Escrow Agent shall give GGE prompt written notice when the Deposited Funds equal $1.925 million.  Following receipt of such notice, GGE will advise the purchasers of Units to remit to the Escrow Agent the balance of the purchase price within thirty (30) days.  Thereafter, Escrow Agent shall give GGE prompt written notice when the Deposited Funds total  $5.0 million,  $10.0 million, $15.0 million, $19.0 million, and $19.25 million. 

	
 

	
            C.         At the time (and in the event) that: (a) the Deposited Funds shall, during the term of this Agreement, equal $19.25 million in subscription proceeds (exclusive of interest) (the "Minimum Escrow Deposit"), (b) the Escrow Agent shall have received written confirmation from GGE that GGE has obtained a written debt financing commitment
for a minimum of $26,135,000 and a maximum of $36,690,000 term debt, and (c) the Escrow Agent shall have provided the Iowa Securities Bureau with an affidavit stating that the foregoing requirements (a) and (b) of this subsection 7C have been satisfied, then this Agreement shall terminate, and the Escrow Agent shall promptly disburse the funds on deposit, including interest, to GGE to be used in accordance with the provisions set out in the Registration Statement.  GGE will deliver a copy of the Registration Statement to the Escrow Agent upon execution of this Agreement.  The Escrow Agent will have no responsibility to examine the Registration Statement with regard to the Escrow Account or otherwise.  Upon the making of such disbursement, the Escrow Agent shall be completely discharged and released of any and all further responsibilities hereunder.

	 

	 	2	 

	 

	

	
            D.        In the event the Deposited Funds do not equal or exceed the Minimum Escrow Deposit on or before the Termination Date, the Escrow Agent shall return to each of the purchasers of the Units in the Offering, as promptly as possible after such Termination Date and on the basis of its records pertaining to the Escrow Account:  (a) the sum which each purchaser initially paid in on account of purchases of the Units in the Offering and (b) subject to paragraph 10 hereof, each purchaser's portion of the total interest earned on the Escrow Account as of the Termination Date, (c) reduced by a processing fee paid to Escrow Agent of Ten Dollars ($10.00) per purchaser.  Computation of any purchaser's share of the net interest earned will be a weighted average based on the proportion of such purchaser's deposit in the Escrow Account from the Offering to all such purchasers'

deposits held by the Escrow Agent and upon the length of time in days such deposit was held in the Escrow Account as compared to all such deposits.  All computations with respect to each purchaser's allocable share of net interest shall be made by the Escrow Agent, which determinations shall be final and conclusive.  Any amount paid or payable to a purchaser pursuant to this paragraph shall be deemed to be the property of such purchaser, free and clear of any and all claims of GGE or its agents or creditors; and the respective purchases of the Units made and entered into in the Offering shall thereupon be deemed, ipso facto, to be cancelled without any further liability of the purchasers or any of them to pay for the Units purchased.  At such time as the Escrow Agent shall have made all the payments called for in this paragraph, the Escrow Agent shall be completely discharged and released of any and all further responsibilities hereunder, and the Units reserved (as provided in paragraph 4) sha

ll be released from such reservation, except that Escrow Agent shall be required to prepare and issue IRS Forms 1099 to each investor in the event that an IRS Form 1099 filing requirement arises with respect to interest earned on the escrow account.

	
 

	
            8.         Agreement with Escrow Agent.  To induce Escrow Agent to act hereunder, it is agreed by GGE that:

	
 

	
            A.        The sole duty of the Escrow Agent, other than as herein specified, shall be to receive the Deposited Funds and hold them subject to release, in accordance herewith, and the Escrow Agent shall be under no duty to determine whether GGE is complying with requirements of this Agreement in tendering to the Escrow Agent said proceeds of the sale of said Units.  The Escrow Agent may conclusively rely upon and shall be protected in acting upon any statement, certificate, notice, request, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.  The Escrow Agent shall have no duty or liability to verify any such statement, certificate, notice, request, consent, order or other document, and its sole responsibility shall be to act only as expressly set forth in this Agreement.  The Escrow Age

nt shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its satisfaction.  The Escrow Agent may consult counsel in respect of any question arising under this Agreement and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice of such counsel.

	
 

	
            B.         GGE hereby indemnifies and holds harmless the Escrow Agent from and against any and all loss, liability, cost, damage and expense, including, without limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur by reason of any action, claim or proceeding brought against the Escrow Agent arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates unless such action, claim or proceeding is the result of the gross negligence or willful misconduct of the Escrow Agent.  

	 

	 	3	 

	 

	

	
            9.         Resignation and Removal of Escrow Agent Successors.  The Escrow Agent may resign upon thirty (30) days advance written notice to GGE.  If a successor Escrow Agent is not appointed within the 30-day period following such notice, Escrow Agent may petition any court of competent jurisdiction to name a successor Escrow Agent.  Any commercial banking institution or trust company with which Escrow Agent may merge or consolidate, and any commercial banking institution or trust company to which Escrow Agent transfers all or substantially all of its corporate trust business shall be the successor Escrow Agent without further act.

	
 

	
            10.        Fees and Expenses of Escrow Agent.  The Escrow Agent shall be entitled to fees upon termination of the escrow as stated in paragraph 7(D), which fees shall be paid from interest on the escrow account only and not from principal.  The fee agreed upon in the event of termination of the escrow without the required minimum escrow deposit is intended as full consideration for the Escrow Agent’s services as contemplated by this Agreement; provided, however, that in the event the Escrow Agent renders any material service not contemplated in this Agreement or there is any assignment of interest in the subject matter of this Agreement, or any material modification hereof; or if any material controversy arises hereunder, or the Escrow Agent is made a party to any litigation pertaining to this Agreement, or the subject matter hereof, then the

Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney’s fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from GGE, but not from the escrow account.

	
 

	
            11.        Notices.  All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the day of transmission if sent by facsimile transmission to the facsimile number given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission, (c) on the next day on which such deliveries are made in New Hampton, Iowa when delivery is to Federal Express or similar overnight courier or the Express Mail service maintained by the United states Postal Service, or (d) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return receipt requested, to the

 party as follows: 

	
 

	
                         If to Escrow Agent:

	
 

	
                                    State Bank of Lawler 

	
                                    Attn: Willis M. Hansen

	
                                    P.O. Box 269

	
                                    Lawler, IA 52154

	
                                    Fax:  (563) 238-3404

	
 

	
                        If to GGE:

	
 

	
                                    Golden Grain Energy, L.L.C.

	
                                    Attn:  Mr. Walter Wendland, President

	
                                    951 N. Linn Avenue

	
                                    P.O. Box 435

	
                                    New Hampton, IA 50659

	
                                    Fax:  (641) 394-4514

	 

	 	4	 

	 

	

	
                        with a required copy to:

	
 

	
                                    Brown, Winick, Graves, Gross, Baskerville and Schoenebaum, P.L.C.

	
                                    Attn:  Bill Hanigan

	
                                    Suite 2000, Ruan Center

	
                                    666 Grand Avenue

	
                                    Des Moines, IA  50309

	
                                    Fax:  (515) 283-0231

	
 

	
            12.        Governing Law.  This Agreement shall be construed, performed, and enforced in accordance with, and governed by, the internal laws of the State of Iowa. 

	
 

	
            13.        Successors and Assigns.  Except as otherwise provided in this Agreement, no party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent to the other parties hereto and any such attempted assignment without such prior written consent shall be void and of no force and effect.  This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto.

	
 

	
            14.        Severability.  In the event that any part of this Agreement is declared by any court or other judicial or administrative body to be null, void, or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect.

	
 

	
            15.        Further Assurances.  Each of the parties shall execute such documents and other papers and take such further actions, as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby.

	
 

	
            16.        Amendments.  This Agreement may be amended or modified, and any of the terms, covenants, representations, warranties, or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance.  Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation, or warranty contained in the Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such conditions, or of the breach of any other provision, term, covenant, representation, or warranty of this Agreement.

	
 

	
            17.        Entire Agreement.  This Agreement contains the entire understanding among the parties hereto with respect to the escrow contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such escrow.

	
 

	
            18.        Paragraph Headings.  The paragraph headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

	
 

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

	
 

	
            IN WITNESS WHEREOF, the parties hereto have hereunto affixed their signatures as of the day and year first written above.

	 

	 	5	 

	 

	

	
GGE:

	
 

	
GOLDEN GRAIN ENERGY, L.L.C.

	
 

	
 

	
            /s/  Walter Wendland                 

	
Walter Wendland, President

	
            

	
 

	
ESCROW AGENT:

	
 

	
State Bank of Lawler

	
 

	
 

	
            /s/  Willis M. Hansen                 

	
Willis M. Hansen, President

	 

	 	6

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