Document:

exv4w2

 

Exhibit 4.2

AGASSIZ
ENERGY, LLC 

SUBSCRIPTION AGREEMENT

Limited Liability Company Membership Units

$1.00 per Unit

Minimum
Investment of 20,000 Units ($20,000), Subject to Waiver

5,000 Unit Increments Thereafter ($5,000)

The undersigned subscriber, desiring to become a member of Agassiz Energy, LLC (“Agassiz
Energy”), a Minnesota limited liability company, with its principal place of business at 510 County
Road 71, Valley Technology Park, Crookston, Minnesota 56716, hereby subscribes for the purchase of
the membership interests of Agassiz Energy, 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.
Subscribers’ Printed Name        
                                                                               

2.
Title, if applicable:    
                                                                                                 

3. Subscriber’s Address:

                    Street 
                                                                                                        

                    City,
State, Zip Code 
                                                                              

4.
Telephone: 
                                                                                                              

5.
Email Address: 
                                                                                                        

B. NUMBER OF UNITS PURCHASED. You must purchase at least 20,000 units. We
presently have 4,636,500 units outstanding. The maximum number of units to be sold is
58,500,000.

 

C. PURCHASE PRICE. Indicate the dollar amount of your investment (minimum investment
is $20,000).

	 	 	 	 	 	 	 	 	 
	1 . Total Purchase Price

	 	=
	 	2. 1st Installment
	 	+
	 	 3. 2nd Installment
	 

	 	 	 	 
	 	 	 	 
	($1.00 Per Unit multiplied by
the number in box B above)

	 	 	 	(10% of the Total Purchase
Price)
	 	 	 	(90% of the Total
	 
	 	 	 	 	 	 	 	 
	 

	 	=
	 	 

	 	+
	 	 

 

 

D. GENERAL INSTRUCTIONS FOR SUBSCRIBERS:

You should read the Prospectus dated [Date of Effectiveness] (the “Prospectus”) in its
entirety including exhibits for a complete explanation of an investment in Agassiz Energy, LLC. To
subscribe, you must:

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 Steps 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 Amended and Restated Member
Control Agreement attached to this Subscription Agreement as Exhibit A.

     2. Immediately provide your personal (or business) check for the first installment of
ten percent (10%) of your investment amount made payable to
“(Escrow Name).”

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
that is attached to this Subscription Agreement and grant Agassiz Energy a security interest in
your Units.

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

                                                                 

                                                                 

                                                                 

     5. Upon written notice from Agassiz Energy stating that its sales of Units have
exceeded the Minimum Offering amount of $42,500,000, you must, within
thirty (30) days,
secure an additional personal (or business) check for the second installment of ninety percent
(90%) of your investment amount made payable to “(Escrow Name)” 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 Instruction 4 within thirty (30) days of the date of Agassiz
Energy’s written notice. If you fail to pay the second installment pursuant to the Promissory Note and
Security Agreement, Agassiz Energy 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
Agassiz Energy’s escrow account at                 . The
funds will be released to Agassiz Energy or returned to you in accordance with the escrow
arrangements described in the Prospectus. Agassiz Energy may, in its sole discretion, reject or
accept any part or all of your subscription. If Agassiz Energy rejects your subscription, your

 

 

Subscription
Agreement and investment will be promptly returned to you, plus
accrued nominal interest,
minus escrow fees. Agassiz Energy may not consider the acceptance or rejection of your subscription
until a future date near the end of this offering.

INSTRUCTIONS IF YOU ARE SUBSCRIBING AFTER THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If
you are subscribing after the Company’s release of funds from escrow, you must follow Steps 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 Amended and Restated Member
Control 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 “Agassiz Energy,
LLC.”

     3. Deliver the original executed documents referenced in Item 1 of these
Instructions, together with your personal or business check described in Item 2 of these
Instructions to the following:

                                                            

                                                            

                                                            

     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. Agassiz Energy may, in its
sole discretion, reject or accept any part or all of your subscription. If Agassiz Energy rejects
your subscription, your Subscription Agreement and investment will be returned to you promptly,
plus nominal interest, minus escrow fees. Agassiz Energy 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 governors listed below or to Agassiz
Energy at 218-281-8442.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Governor
	 	Cell Number	 	 
	 

	 	 
	 	 	 	 
	 

	 	Donald Sargeant
	 	218-281-8442	 	 
	 

	 	Wayne Wagner
	 	218-281-6914	 	 
	 

	 	JohnVallager
	 	218-281-3789	 	 

     If
you are a North Dakota resident or entity, you should contact:

          Gary
Bridgeford at 701-775-8480 or Larry Altringer at 218-281-6911.

E.  Agassiz
Energy Disclosures

	 	1.	 	The Units of Agassiz Energy are offered and sold in
reliance upon a federal securities registration; South Dakota, North Dakota and
Minnesota securities registrations; and exemptions from securities registrations in
various other states, and the Units to be issued pursuant to this
subscription agreement can only be sold to a person meeting requirements of
suitability;
	 
	 	2.	 	The securities purchased pursuant to this
Subscription Agreement have not been registered under the securities laws of any state other
than the States of South Dakota, North Dakota and Minnesota, and Agassiz
Energy is relying in part upon the representations of the undersigned Subscriber
contained herein;
	 
	 	3.	 	The securities subscribed for have not been approved
or disapproved by the South Dakota, North Dakota or Minnesota Securities
Departments or any other regulatory authority, nor has any regulatory authority
passed upon the accuracy or adequacy of the Prospectus;
	 
	 	4.	 	To enforce transfer restrictions, Agassiz Energy may place a stop transfer
order with its registrar and stock transfer agent (if any) covering all certificates
representing any of the membership units;

F.  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.

 

 

	 	 	 	 	 
	 

	 	o
	 	Individual
	 

	 	o
	 	Joint Tenants with Right of Survivorship (Both signatures must appear on
Page 6.)
	 

	 	o
	 	Corporation, Limited Liability Company or Partnership (Corporate Resolutions,
Operating Agreement or Partnership Agreement must be enclosed.)
	 

	 	o
	 	Trust
	 

	 	 	 	               Trustee’s
Name: 
                                                            
	 

	 	 	 	               Trust
Date: 
                                                            
	 

	 	o
	 	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. Trusts should provide their taxpayer identification number. Custodians
should provide the minor’s Social Security Number. All individual subscribers should
provide their Social Security Number. Other entities should provide their taxpayer
identification number.

o Check box if you are a non-resident alien

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

o 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 resident income taxes are filed: 
                                                                                

 

 

     State(s) in which you have maintained your principal residence during the past three years:

                                                                                                                                                 

                                                                                                                                                 

	 	5.	 	Suitability Standards. You cannot invest in Agassiz Energy unless you meet one, or more,
of the following suitability tests (a or b) 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 below will be
applied on a joint basis:

	 	 	 	 	 	 	 
	 

	 	a.
	 	o
	 	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
	 
	 	 	 	 	 	 
	 

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

	 	c.
	 	o
	 	I am a North Dakota resident and my
total investment does not exceed 10% of my net worth, exclusive of my
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 Agassiz Energy that he, she or it:

	 	a.	 	has received a copy of Agassiz Energy’s Prospectus dated
[effective date] and the exhibits thereto;

 

 

	 	b.	 	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;
	 
	 	c.	 	understands that there is no present market for Agassiz Energy’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;
	

	 
	 	d.	 	has received a copy of the Agassiz Energy Second Amended and Restated Member Control Agreement, dated
August __, 2006, and understands that upon closing the escrow by Agassiz
Energy, the subscriber and the membership units will be bound by the provisions of the Member
Control Agreement which contains, among other things, provisions that restrict the transfer of
membership units;
	 
	 	e.	 	understands that the Units are subject to substantial restrictions on transfer under
state securities laws along with restrictions in the Agassiz Energy Member Control 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 Member
Control Agreement, and the requirements of the Securities Act of 1933, as amended, and
applicable state securities laws;
	 
	 	f.	 	meets the suitability test marked in Item 5 above;
	 
	 	g.	 	understands that Agassiz Energy will place a restrictive legend on any certificate
representing any unit containing substantially the following language as the same may be
amended by the Governors of Agassiz Energy in their sole discretion:
	

THE TRANSFERABILITY OF THE MEMBERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED. SUCH UNITS MAY NOT BE SOLD, ASSIGNED, OR
TRANSFERRED, AND NO ASSIGNEE, VENDEE, TRANSFEREE OR ENDORSEE THEREOF WILL
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
FEDERAL AND STATE LAW AND THE TERMS AND CONDITIONS SET FORTH IN THE
MEMBER CONTROL AGREEMENT OF THE COMPANY, AS AMENDED FROM TIME TO TIME.

 

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, OFFERED
FOR SALE OR TRANSFERRED IN THE 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.

	

	 
	 	h.	 	may not transfer or assign this subscription agreement, or any of the subscriber’s interest
herein;
	 
	 	i.	 	 has written his, her, or its correct taxpayer identification number under Item E.2 on this
subscription agreement;
	 
	 	j.	 	is not subject to back up withholding either because he, she or it has not been notified by
the Internal Revenue Service (“IRS”) that he, she or it is subject to backup withholding as a
result of a failure to report all interest or dividends, or the IRS has notified him, her or
it that he is no longer subject to backup withholding (Note this clause (p) should be crossed
out if the backup withholding box in Item E.2 is checked);
	 
	 	k.	 	understands that execution of the attached Promissory Note and Security Agreement will allow
Agassiz Energy 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
	 
	 	l.	 	acknowledges that Agassiz Energy may retain possession of certificates representing
subscriber’s Units to perfect its security interest in those Units.
	

 

 

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

AGASSIZ ENERGY, LLC:

Agassiz Energy, LLC hereby accepts the subscription for the above Units.

Dated this                                          day of                                          , 200                    

AGASSIZ ENERGY, LLC

By:                                                                                

Its:                                                                                

If you are
a Minnesota resident, Agassiz Energy cannot complete a sale of the
Units to you until at least five business days after you receive the
Prospectus.

 

 

PROMISSORY NOTE AND SECURITY AGREEMENT

Date of Subscription Agreement:                                         , 200                     .

$1.00 per Unit

Minimum
Investment of 20,000 Units ($20,000), 20,000 Unit, Subject to Waiver

Increments
Thereafter
($5,000)                 
     
         
           

                                                             Number of Units subscribed

                                                            Total Purchase Price ($1.00 per Unit multiplied by number of units
Subscribed)

(                                                            ) Initial Payment (10% of Principal Amount)

                                                             Principal Balance

FOR VALUE RECEIVED, the undersigned hereby promises to pay to the order of Agassiz Energy, LLC, a
Minnesota limited liability company (“Agassiz Energy”), at its principal office located 510 County
Road 71, Technology Park, Crookston, MN 56716, or at such other place as required by Agassiz
Energy, the Principal Balance set forth above in one lump sum to be paid without interest within 30
days following the call of the Agassiz Energy Board of Governors, 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 Agassiz Energy.

The undersigned agrees to pay to Agassiz Energy 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 Minnesota.

The provisions of this Promissory Note and Security Agreement shall inure to the benefit of Agassiz
Energy 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 Agassiz Energy, and its successors and assigns (“Secured Party”), a
purchase money security interest in all of the undersigned’s Membership Units of Agassiz Energy 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

 

 

EXHIBIT “A”

MEMBER SIGNATURE PAGE ADDENDA

TO THE AMENDED AND RESTATED

MEMBER CONTROL AGREEMENT OF AGASSIZ ENERGY, LLC

     The undersigned does hereby represent and warrant that the undersigned, as a condition to
becoming a Member in Agassiz Energy, LLC, has received a copy of the Amended and Restated Member
Control Agreement, dated, 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 Member
Control Agreement, shall be subject to and comply with all terms and conditions of said Amended and
Restated Member Control Agreement in all respects as if the undersigned had executed said Amended
and Restated Member Control Agreement on the original date thereof and that the undersigned is and
shall be bound by all of the provisions of said Amended and Restated Member Control Agreement from
and after the date of execution hereof.

	 	 	 	 	 
	 

	 	 	 	 
	Individuals:

	 	Entities:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Name of individual Member (Please Print)

	 	Name of Entity (Please Print)	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Signature of Individual

	 	Print Name and Title of Officer	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	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:

AGASSIZ ENERGY, LLC

By:         
                                                                        

Its:exv4w3

 

EXHIBIT 4.3

ESCROW AGREEMENT

     This Escrow Agreement
(the “Agreement”) dated as of      , 2006 is by
and between Agassiz Energy, LLC, a Minnesota limited liability company (the “Company”) and
Bremer Bank, N.A. (the “Escrow Agent”), (the “Escrow Agent” and the “Company” may
 also be
hereinafter referred to as the “Parties”).

RECITALS

     WHEREAS, the Company intends to conduct an offering of a minimum of 42,500,000 and a maximum
of 58,500,000 of its membership units (the “Units”) at a price of $1.00 per Unit, in minimum blocks
of twenty thousand (20,000) Units, subject to waiver, with a 5,000
additional Unit minimum purchase requirement, in an offering
in the States of North Dakota, South Dakota, Minnesota and possibly other states, made pursuant to
a federal registration under the provisions of the Securities Act of 1933, as amended (the
“Offering”);

     WHEREAS, the Company
desires to retain the Escrow Agent to act as escrow agent and to hold the
cash proceeds received in the Offering pursuant to the terms hereof.

     NOW, THEREFORE, in consideration of the premises the Parties agree as follows:

     1. ACCEPTANCE OF APPOINTMENT: Escrow Agent 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 cash proceeds deposited in the Escrow
Account (the “Deposited Funds”) shall equal the Minimum Escrow Deposit (as hereinafter defined),
all cash proceeds deposited in the Escrow Account by the Company shall not become the property of the
Company or be subject to the debts of the Company 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. ESCROW FEES: The Company hereby agrees to pay the Escrow Agent an advance payment
for ordinary services rendered hereunder in the amount of $___(the “Escrow Fee”). Thereafter,
Company shall pay to Escrow Agent a monthly fee during the term of this Agreement in the amount of
___% of the balance of the Escrow Account on the eighth day of each month divided by twelve (the
“Monthly Fee”). Notwithstanding the foregoing, the Monthly Fee shall in no event exceed the amount
of interest on the Escrow Account and shall be paid from interest only and not from principal.

 

 

     5. DEPOSIT OF PROCEEDS: All proceeds from sales of Units in the Offering shall be
delivered by the Company 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 the name, address and social security number/taxpayer
identification number of each person or entity 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.
Checks are not considered full payment until the fund collection,
as the proceeds of each sale are deposited with
the Escrow Agent, the Company shall reserve the number of Units confirmed to the purchaser thereof
in connection with such sale. All such deposited proceeds are referred to herein as the “Escrow
Funds.”

     6. INVESTMENT OF ESCROW FUNDS: The Escrow 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 short term certificates of deposits by the Escrow Agent or
short term securities issued by the United States government, at the Escrow Agent’s reasonable discretion. Any interest
received by Escrow Agent with respect to the Escrow Funds shall be paid pursuant to the terms of
this Agreement.

     7. TERMINATION OF ESCROW: This Agreement and the Escrow created hereunder shall be
terminated as provided in paragraph 8 hereof or as of the date (the “Termination Date”) one year
and one day following the date upon which the Securities and Exchange Commission authorizes the
Offering (the “Offering’s Effective Date”), provided; however, that if prior to Termination Date,
the Company has sold membership units equal to the minimum offering amount and the Company has
advised the purchasers of those membership units to remit to the Escrow Agent the balance of the
purchase price, then the Escrow may continue beyond the Termination Date until all Funds have been
paid and the conditions for releasing the Funds have been satisfied. In no event shall this date be
later than three (3) months following the Termination Date and
shall not exceed one year from the Offering’s Effective Date in any
event. The Company 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.

     8. DISPOSITION OF ESCROW 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 the Company.

	 	B.	 	The Escrow Agent shall give the Company prompt written notice when the
Deposited Funds equal $4,250,000 (exclusive of interest). Following receipt of such
notice, the Company 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 the Company written notice acknowledging the receipt of the Deposited Funds
every seven days. The Escrow Agent shall give the Company prompt written notice when the Deposited Funds total $42,500,000
(exclusive of interest).

 

 

	

	 	C.	 	At the time (and in the event) that: (a) the Deposited Funds shall, during the
term of this Agreement, equal $42,500,000 in subscription proceeds (exclusive of
interest) (the “Minimum Escrow Deposit”); (b) the Escrow Agent shall have received
written confirmation from the Company that the Company has obtained
(i)  a written debt
financing commitment for debt financing ranging from a minimum of approximately
$50,000,000 to a maximum of $66,000,000 (ii) an executed
construction agreement; and (iii) confirmation of the finalized
EAW process from the
Minnesota Pollution Control Agency; (c) the Company has affirmatively elected in
writing to terminate this Agreement; and (d) the Escrow Agent shall have provided the
states in which the Company has registered an affidavit stating that the foregoing
requirements (a), (b) and (c) of this subsection 8C have
been satisfied, and has provided to the Minnesota Department of
Commerce a copy of the documents listed in (b) above, then this
Agreement shall terminate, and the Escrow Agent shall promptly disburse the funds on
deposit, including interest, to the Company to be used in accordance with the
provisions set out in the Registration Statement. The Company 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, nor shall Escrow Agent have any duty to
ensure that Company complies with the Registration Statement. Upon the making of such
disbursement, the Escrow Agent shall be completely discharged and released of any and
all further responsibilities hereunder.
	 
	 	D.	 	In the event the Deposited Funds do not equal or exceed the Minimum Escrow
Deposit on or before the Termination Date or if the Company has not
received the agreement as described in Section 8.C.(b) above 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) each purchaser’s portion of
the total interest earned on the Escrow Account as of the Termination Date, (c) reduced
by the transaction fees provided in paragraph 10 hereof. 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 the Company 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 5) shall be released from such reservation, except that
Escrow Agent shall be required to prepare and issue a single IRS Form 1099 to each
investor in the event that funds are returned to investors.

     9. LIABILITY OF ESCROW AGENT: In performing any duties under the Escrow Agreement, the
Escrow Agent shall not be liable to the Company, any subscriber/purchaser or any Party for damages,
losses, or expenses, except for gross negligence or willful misconduct on the part of the Escrow
Agent. The Escrow Agent shall not incur any such liability for (I) any act or failure to act made
or omitted in good faith, or (II) any action taken or omitted in reliance upon any instrument,
including any written statement or affidavit provided for in this Agreement that the Escrow Agent
shall in good faith believe to be genuine, nor will the Escrow Agent be liable or responsible for
forgeries, fraud, impersonations, or determining the scope of any representative’s authority. In
addition, the Escrow Agent may consult with legal counsel in connection with the Escrow Agent’s
duties under this Agreement and shall be fully protected in any action taken, suffered, or
permitted by it in good faith in accordance with the advice of counsel. The Escrow Agent is not
responsible for determining and verifying the authority of any person acting or purporting to act
on behalf of any party to this Agreement.

     10. FEES AND EXPENSES: In the event the Deposited Funds do not equal or exceed the
Minimum Escrow Deposit before the Termination Date or the Company does not receive a written debt
financing commitment as described herein before the Termination Date, the Escrow Agent shall be
entitled to a fee of $10.00 per purchaser, which fees shall be paid from the interest on the Escrow
Account only and not from principal. In the event the Escrow Agent renders any service not provided
for in this Agreement, or if the Company requests a substantial modification of its terms, or if
any controversy arises, or if the Escrow Agent is made a party to, or intervenes in, any litigation
pertaining to this escrow or its subject matter, the Escrow Agent shall be reasonably compensated
for such extraordinary services and reimbursed for all costs, attorney’s fees, including allocated
costs of in-house counsel, and expenses occasioned by such default, delay, controversy or
litigation and the Escrow Agent shall have the right to retain all documents and/or other things of
value at any time held by the Escrow Agent in this escrow until such compensation, fees, costs and
expenses are paid. The Company promises to pay these sums upon demand. Unless otherwise provided,
the Company will pay all of the Escrow Agent’s usual
charges and the Escrow Agent may deduct such sums from the interest on the Escrow Account only and
not from principal deposited to the Escrow Account.

     11. CONTROVERSIES: If any controversy arises between the Parties to this Agreement, or
with any other Party, concerning the subject matter of this Agreement, its terms or conditions, the
Escrow Agent will not be required to determine the controversy or to take any action regarding it.
The Escrow Agent may hold all documents and funds and may wait for settlement of any such
controversy by final appropriate legal proceedings or other means as, in the Escrow Agent’s
discretion, the Escrow Agent may require, despite what may be set forth elsewhere in this
Agreement. In such event, the Escrow Agent will not be liable for interest or damage. Furthermore,
the Escrow Agent may at its option file an action of interpleader requiring the Parties to answer
and litigate any claims and rights among themselves. The Escrow Agent is

 

 

authorized to deposit with the clerk of the court all documents and funds held in escrow, except
all costs, expenses, charges and reasonable attorney fees incurred by the Escrow Agent due to the
interpleader action and which the Company agrees to pay. Upon initiating such action, the Escrow
Agent shall be fully released and discharged of and from all obligations and liability imposed by
the terms of this Agreement.

     12. INDEMNIFICATION OF ESCROW AGENT: The Company and its successors and assigns agree
jointly and severally to indemnify and hold the Escrow Agent harmless against any and all losses,
claims, damages, liabilities, and expenses, including reasonable costs of investigation, counsel
fees, including allocated costs of in-house counsel and disbursements that may be imposed on the
Escrow Agent or incurred by the Escrow Agent in connection with the performance of its duties under
this Agreement, including but not limited to any litigation arising from this Agreement or
involving its subject matter. The Escrow Agent shall have a first lien on the property and papers
held under this Agreement for such compensation and expenses.

     13. RESIGNATION OF ESCROW AGENT: The Escrow Agent may resign at any time upon giving
at least (30) days written notice to the Company provided, however, that no such resignation shall
become effective until the appointment of a successor escrow agent which shall be accomplished as
follows: The Company shall use its best efforts to obtain a successor escrow agent within thirty
(30) days after receiving such notice. If the Company fails to agree upon a successor escrow agent
within such time, the Escrow Agent shall have the right to appoint a successor escrow agent
authorized to do business in the state of Minnesota. The successor escrow agent shall execute and
deliver an instrument accepting such appointment and it shall without further acts, be vested with
all the estates, properties, rights, powers, and duties of the predecessor escrow agent as if
originally named as escrow agent. The Escrow Agent shall thereupon be discharged from any further
duties and liability under this Agreement.

     14. AUTOMATIC SUCCESSION: Any company into which the Escrow Agent may be merged or
with which it may be consolidated, or any company to whom the Escrow Agent may transfer a
substantial amount of its global escrow business, shall be the Successor to the Agent without the
execution or filing of any paper or any further act on the part of any of the Parties, anything
herein to the contrary notwithstanding.

15. MISCELLANEOUS:

	 	(a)	 	GOVERNING LAWS: This Agreement is to be construed and interpreted
according to Minnesota law.

	 	(b)	 	COUNTERPART: 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. The exchange of copies of this Agreement
and of signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties

 

 

	 	 	 	transmitted by facsimile shall be deemed to be their original signatures for all
purposes.

	 	(c)	 	NOTICES: All instructions, notices and demands herein provided for
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 promptly obtained after completion of
transmission; (c) on the next day on which such deliveries are
made in Crookston, Minnesota, 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 the Company:

	 	If to the Escrow Agent:
	 
	 	 
	Agassiz Energy, LLC
	 	 
	510 County Road 71
	 	 
	Valley Technology Park
	 	 
	Crookston, MN 56716
	 	 
	(218) 281-8442
	 	 
	 
	 	 
	With a required copy to:
	 	 
	 
	 	 
	Todd A. Taylor, Esq.
	 	 
	Leonard, O’Brien
	 	 
	Spencer, Gale & Sayre, Ltd.
	 	 
	100 South Fifth Street
	 	 
	Suite 2500
	 	 
	Minneapolis, MN 55402
	 	 
	(612) 332-1030
	 	 

	 	(d)	 	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.

	 	(e)	 	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.

 

 

	 	(f)	 	NON-ENDORSEMENT: The Company represents and agrees that it has not made
nor will it in the future make any representation that states or implies that the
Escrow Agent has endorsed, recommended or guaranteed the purchase, value, or repayment
of the Securities offered for sale by the Company. The Company further agrees that it
will insert in any prospectus, offering circular, advertisement, subscription agreement
or other document made available to prospective purchasers of the Securities the
following statement in bold face type: “Bremer Bank, N.A. 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 such Securities,” and
will furnish to the Escrow Agent a copy of each such prospectus, offering circular,
advertisement, subscription agreement or other document at least 5 business days prior
to its distribution to prospective Subscribers.

The undersigned acknowledges that Bremer Bank, N.A.
 is acting only as an escrow agent in
connection with the offering of the Securities described herein, and has not endorsed, recommended
or guaranteed the purchase, value or repayment of such Securities.

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

	 	 	 	 	 	 	 
	The Company	 	Escrow Agent
	 
	 	 	 	 	 	 
	Agassiz Energy, LLC	 	Bremer Bank, N.A.
	 
	 	 	 	 	 	 
	By:

	 	 
 

	 	By:
	 	 
 

	 

	 	Donald Sargeant, President	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its:

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