EAST COAST ETHANOL, LLC FORM OF SUBSCRIPTION AGREEMENT (for North Carolina, Maryland and Virginia investors only) Limited Liability Company Membership Units $15,000 per Unit Minimum Investment of 1 Unit ($15,000) 1/3 Unit Increments Thereafter ($5,000)
EX-4.2 17 v126914_ex4-2.htm
EAST COAST ETHANOL, LLC
FORM OF SUBSCRIPTION AGREEMENT
(for North Carolina, Maryland and Virginia investors only)
Limited Liability Company Membership Units
$15,000 per Unit
Minimum Investment of 1 Unit ($15,000)
1/3 Unit Increments Thereafter ($5,000)
The undersigned subscriber ("Subscriber"), desiring to become a member of East Coast Ethanol, LLC (“East Coast”), a Delaware limited liability company, with its principal place of business at 1907 Thurmond Mall Post Office Box 2226, Columbia, South Carolina 29202 hereby subscribes for the purchase of membership units of East Coast, and agrees to pay the related purchase price, identified below.
A. SUBSCRIBER INFORMATION. Please print your individual or entity name and address. IF WE ACCEPT YOUR SUBSCRIPTION, THE UNITS WILL BE TITLED IN THE NAME OF THE SUBSCRIBER AS IT APPEARS BELOW. Joint subscribers should provide both names. Your name and address will be recorded exactly as printed below. Please provide your home, business and/or mobile telephone number. If desired, please also provide your e-mail address.
| 1. | Subscriber's Printed Name | _____________________________________________________ |
| 2. | Date of Birth (Natural Persons only) | _____________________________________________________ |
| 2. | Title, if applicable | _____________________________________________________ |
| 3. | Subscriber's Address | |
| Street | _____________________________________________________ | |
| City, State, Zip Code | _____________________________________________________ | |
| Province and Country | _____________________________________________________ | |
| 4. | E-mail Address (optional) | _____________________________________________________ |
| 5. | Home Telephone Number | _____________________________________________________ |
| 6. | Business Telephone Number | _____________________________________________________ |
| 7. | Mobile Telephone Number | _____________________________________________________ |
B. NUMBER OF UNITS PURCHASED. You must purchase at least 1 unit. The minimum number of units to be sold in the offering is 16,910 units and the maximum number of units to be sold is 39,455.
| units |
C. PURCHASE PRICE. Indicate the dollar amount of your investment (minimum investment is $15,000).
| 1. Total Purchase Price ($15,000 per unit multiplied by number of units) | = | 2. 1st Installment (10% of Total Purchase Price) | + | 3. 2nd Installment (90% of Total Purchase Price) |
| = | + |
D. GENERAL INSTRUCTIONS FOR SUBSCRIBERS:
You should read the Prospectus dated [DATE OF EFFECTIVENESS] (the "Prospectus") in its entirety including the exhibits for a complete explanation of an investment in East Coast. Thomas Securities, LLC, as registered broker-dealer for East Coast, will not complete a sale of securities until at least 5 business days from the date you have received East Coast’s final prospectus. For purposes of this delivery requirement, filing of the final prospectus with the SEC on EDGAR pursuant to Rule 424 shall constitute access equaling delivery in accordance with Rule 172.
INSTRUCTIONS IF YOU ARE SUBSCRIBING PRIOR TO THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If you are unsure as to whether the Company has release funds from escrow, please contact Thomas Securities, LLC at ###-###-####, the Company at ###-###-#### or visit the Company's website at www.eastcoastethanol.us. If you are subscribing prior to the Company’s release of funds from escrow, you must follow the instructions contained in paragraphs 1 through 5 below:
1. Complete all information required in this Subscription Agreement, and date and sign the Subscription Agreement on pages 6-7 and the Member Signature Page to our Operating Agreement attached to this Subscription Agreement as Exhibit A.
2. Immediately provide a personal (or business) check for the first installment of 10% of your investment amount. The check should be made payable to “BB&T Corp., escrow agent for East Coast Ethanol, LLC.” You will determine this amount in box C.2 on page 1 of this Subscription Agreement.
3. Execute the Promissory Note on page 8 of this Subscription Agreement evidencing your commitment to pay the remaining 90% due for the units. The Promissory Note is attached to this Subscription Agreement and grants East Coast Ethanol, LLC legal recourse to recover the 90% balance from you in the event you fail to pay the balance when due.
4. For U.S. persons, please complete Form W-9, Request for Taxpayer Identification Number and Certification or for non-U.S. persons, please complete Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.
5. Deliver the original executed documents referenced in paragraphs 1, 3 and 4 of these instructions, together with a personal or business check as described in Paragraph 2 of these instructions to:
| Thomas Securities, LLC, |
| registered broker-dealer for East Coast Ethanol, LLC |
| 3414 Peachtree Road, NE, Suite 656 |
| Atlanta, GA 30326 |
| (678) 539-1701 (fax) |
| (888) 507-5300 or ###-###-#### |
If you intend to wire transfer funds rather than provide a check for your subscription amount, please contact East Coast directly for wire transfer instructions.
6. Within 20 days of written notice from East Coast that your subscription has been accepted, you must remit an additional personal (or business) check for the second installment of 90% of your investment amount made payable to “BB&T Corp., escrow agent for East Coast Ethanol, LLC” in satisfaction of the Promissory Note. You will determine this amount in box C.3 on page 1 of this Subscription Agreement. You must deliver this check to the same address set forth above in paragraph 4 within 20 days of the date of East Coast's written notice. If you fail to pay the second installment pursuant to the Promissory Note, East Coast shall be entitled to retain your first installment and to seek other damages, as provided in the Promissory Note. This means that if you are unable to pay the 90% balance of your investment amount within 20 days of our notice, you may have to forfeit the 10% cash deposit.
Your funds will be placed in East Coast’s escrow account at BB&T Corp. If East Coast rejects your subscription, your Subscription Agreement and investment will be promptly returned to you, plus any nominal interest. We do not expect to release funds from the escrow account until the following conditions are satisfied: (1) cash proceeds from unit sales deposited in the escrow account equals or exceeds the minimum offering amount of $253,650,000, exclusive of interest; (2) we obtain a written debt financing commitment for debt financing ranging from approximately $269,875,000 to $608,050,000, less any grants and/or tax increment financing we are awarded; (3) we elect, in writing, to terminate the escrow agreement; 4) an affidavit prepared by our escrow agent has been sent to the states in which we have registered units stating that the conditions set out in (1), (2) and (3) have been met; and (5) in each state in which consent is required, the state securities commissioner has consented to release of the funds on deposit. Upon satisfaction of these conditions, we expect that the escrow agreement will terminate, and the escrow agent will disburse the funds on deposit, including interest, to us to be used in accordance with the provisions set out in this prospectus. If we have not satisfied these conditions for releasing funds from escrow by the 12 month anniversary of the effective date of this registration statement, we will return all equity proceeds to investors and terminate the escrow agreement. In that event, investors will receive the entire amount of their paid-in investment being held in escrow plus any allocable interest earned during the escrow period.
2
INSTRUCTIONS IF YOU ARE SUBSCRIBING AFTER THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If you are subscribing after the Company’s release of funds from escrow, you must follow the instructions contained in paragraphs 1 through 3 below:
1. Complete all information required in this Subscription Agreement, and date and sign the Subscription Agreement on pages 6-7 and the Member Signature Page to our Operating Agreement attached to this Subscription Agreement as Exhibit A.
2. Immediately provide your personal (or business) check for the entire amount of your investment (as determined in box C.1 on page 1) made payable to “East Coast Ethanol, LLC.”
3. For U.S. persons, please complete Form W-9, Request for Taxpayer Identification Number and Certification or for non-U.S. persons, please complete W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.
4. Deliver the original executed documents referenced in paragraphs 1 and 3 of these instructions, together with your personal or business check as described in paragraph 2 to:
| Thomas Securities, LLC, |
| registered broker-dealer for East Coast Ethanol, LLC |
| 3414 Peachtree Road, NE, Suite 656 |
| Atlanta, GA 30326 |
| (678) 539-1701 (fax) |
| (888) 507-5300 |
If you intend to wire transfer funds rather than provide a check for your subscription amount, please contact East Coast directly for wire transfer instructions.
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. East Coast may, in its sole discretion, reject or accept any part or all of your subscription. If East Coast rejects your subscription, your Subscription Agreement and investment will be returned to you promptly, plus any nominal interest. East Coast may not consider the acceptance or rejection of your subscription until a future date near the end of this offering. If East Coast accepts your subscription, Thomas Securities, LLC, will provide you with a confirmation of your purchase.
You may direct your questions to our registered broker-dealer, Thomas Securities, LLC at ###-###-####.
E. Additional Subscriber Information. Subscriber, named above, certifies the following under penalties of perjury:
3
| 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 7.) |
| o | Corporation, Limited Liability Company or Partnership (Corporate Resolutions, Operating Agreement or Partnership Agreement must be enclosed.) |
| o | Trust |
Trustee’s Name: ________________________________________
Trust Date: ____________________________________________
| ¨ | 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, and/or subject to backup withholding. All individual subscribers should provide their Social Security Numbers. Trusts should provide the trust's taxpayer identification number. Custodians should provide the minor's Social Security Number. Other entities should provide the entity's taxpayer identification number. |
| ¨ | 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 resident 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. Investors (except North Carolina residents) cannot invest in East Coast unless they meet one of the following suitability tests (a or b) set forth below. Residents of North Carolina cannot invest in East Coast unless they meet one of the following suitability tests (c or d) set forth below. Please review the suitability tests and check the box next to the following suitability test that you meet. For husbands and wives purchasing jointly, the tests below will be applied on a joint basis. |
4
| For investors except residents of North Carolina: |
| a. ¨ | 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. ¨ | I (We) have a net worth of $150,000, exclusive of home, home furnishings, and automobiles. |
For North Carolina residents only:
| c. ¨ | I (We) have net worth of at least $70,000 exclusive of home, home furnishings, and automobiles, and minimum annual gross income of $70,000; or |
| d. ¨ | I (We) have a net worth of $250,000, exclusive of home, home furnishings, and automobiles. |
| 6. | Subscriber's Representations and Warranties. You must certify your representations and warranties by placing your initials where indicated and by signing and dating this Subscription Agreement. Joint subscribers are also required to initial and sign as indicated. |
(Initial here) (Joint initials) By signing below the subscriber represents and warrants to East Coast that he, she or it:
| ____ | ____ | a. has received a copy of East Coast's Prospectus dated [DATE OF EFFECTIVENESS] and the exhibits thereto or has received notice that this sale has been made pursuant to a registration statement in which a final prospectus would have been required to have been delivered in the absence of Rule 172; | ||
| ____ | ____ | b. has been informed that the units of East Coast are offered and sold in reliance upon a federal securities registration; state registrations in Florida, Maryland, New York, South Carolina, North Carolina, Virginia and Georgia; and exemptions from securities registrations in various other states and jurisdictions, 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 Florida, Maryland, New York, South Carolina, North Carolina, Virginia and Georgia and that East Coast 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 SEC, or the Florida, Maryland, New York, South Carolina, North Carolina, Virginia and Georgia Securities Departments 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 East Coast'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 been encouraged to seek the advice of his legal counsel and accountants or other financial advisers with respect to investor-specific tax and/or other considerations relating to the purchase and ownership of units; |
5
| ____ | ____ | h. has received a copy of the East Coast Operating Agreement, dated July 27, 2007, and understands that upon closing the escrow by East Coast, 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 certain tax and securities laws along with restrictions in the East Coast 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 tax and securities laws; | ||
| ____ | ____ | j. meets the suitability test marked in Item E.5 above and is capable of bearing the economic risk of this investment, including the possible total loss of the investment; | ||
| ____ | ____ | k. understands that East Coast 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 East Coast in their sole discretion: |
THE TRANSFERABILITY OF THE MEMBERSHIP UNITS REPRESENTED BY THIS DOCUMENT IS RESTRICTED. SUCH UNITS MAY NOT BE SOLD, ASSIGNED, OR TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE, TRANSFEREE OR ENDORSEE THEREOF BE RECOGNIZED AS HAVING ACQUIRED ANY SUCH UNITS FOR ANY PURPOSES, UNLESS AND TO THE EXTENT SUCH SALE, TRANSFER, HYPOTHECATION, OR ASSIGNMENT IS PERMITTED BY, AND IS COMPLETED IN STRICT ACCORDANCE WITH, THE TERMS AND CONDITIONS SET FORTH IN THE OPERATING AGREEMENT OF THE COMPANY, AS AMENDED FROM TIME TO TIME.
THE UNITS REPRESENTED BY THIS DOCUMENT MAY NOT BE SOLD, OFFERED FOR SALE, OR TRANSFERRED IN ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS.
| ____ | ____ | l. understands that, to enforce the above legend, East Coast 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. may not transfer or assign this Subscription Agreement, or any of the subscriber's interest herein without the prior written consent of East Coast; | ||
| ____ | ____ | n. has written his, her, or its correct taxpayer identification number under Item E.2 on this Subscription Agreement; | ||
| ____ | ____ | o. 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 (o) should be crossed out if the backup withholding box in Item E.2 is checked); and |
6
| ____ | ____ | p. understands that execution of the attached Promissory Note will allow East Coast 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. |
| 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 EAST COAST ETHANOL, LLC:
East Coast Ethanol, LLC hereby accepts Subscriber's subscription for _____ units.
Dated this ___ day of _________________________ , 200 __.
| EAST COAST ETHANOL, LLC |
| By: ___________________________________________ |
| Its: ___________________________________________ |
7
PROMISSORY NOTE
Date of Subscription Agreement: ___________________________________, 200_.
$15,000 per Unit
Minimum Investment of 1 Unit ($15,000); Units Sold in 1/3 Unit Increments Thereafter ($5,000 each)
| ____________________ | Number of Units Subscribed | |
| ____________________ | Total Purchase Price ($15,000 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 East Coast Ethanol, LLC, a Delaware limited liability company ("East Coast"), at its principal office located at 1907 Thurmond Mall Post Office Box 2226, Columbia, South Carolina 29202, or at such other place as required by East Coast, the Principal Balance set forth above in one lump sum to be paid without interest within 20 days following the call of the East Coast 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 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 East Coast.
The undersigned agrees to pay to East Coast 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 South Carolina.
The provisions of this Promissory Note shall inure to the benefit of East Coast 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/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 |
8
Exhibit A
MEMBERS SIGNATURE PAGE
ADDENDA
TO THE
OPERATING AGREEMENT OF
EAST COAST ETHANOL, LLC
The undersigned does hereby represent and warrant that the undersigned, as a condition to becoming a Member of East Coast Ethanol, LLC, has received a copy of the Operating Agreement of East Coast Ethanol, LLC (“Operating Agreement”), dated July 27, 2007, and, if applicable, all amendments and modifications thereto, and does hereby agree that the undersigned, along with the other parties to the Operating Agreement, shall be subject to and comply with all terms and conditions of said Operating Agreement in all respects as if the undersigned had executed said Operating Agreement on the original date thereof and that the undersigned is and shall be bound by all of the provisions of said Operating Agreement from and after the date of execution hereof.
| Individuals | Entities | |
| _______________________________________ | _____________________________________________ | |
| Name of Individual Member (Please Print) | Name of Entity (Please Print) | |
| _______________________________________ | ____________________________________________ | |
| Signature of Individual | Print Name and Title of Officer | |
| _______________________________________ | ____________________________________________ | |
| 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: | ||
| EAST COAST ETHANOL, LLC | ||
| BY:______________________________________________ | ||
| ITS:______________________________________________ |
9
EAST COAST ETHANOL, LLC
FORM OF SUBSCRIPTION AGREEMENT
Limited Liability Company Membership Units
$15,000 per Unit
Minimum Investment of 1 Unit ($15,000)
1/3 Unit Increments Thereafter ($5,000)
The undersigned subscriber ("Subscriber"), desiring to become a member of East Coast Ethanol, LLC (“East Coast”), a Delaware limited liability company, with its principal place of business at 1907 Thurmond Mall Post Office Box 2226, Columbia, South Carolina 29202 hereby subscribes for the purchase of membership units of East Coast, and agrees to pay the related purchase price, identified below.
A. SUBSCRIBER INFORMATION. Please print your individual or entity name and address. IF WE ACCEPT YOUR SUBSCRIPTION, THE UNITS WILL BE TITLED IN THE NAME OF THE SUBSCRIBER AS IT APPEARS BELOW. Joint subscribers should provide both names. Your name and address will be recorded exactly as printed below. Please provide your home, business and/or mobile telephone number. If desired, please also provide your e-mail address.
| 1. | Subscriber's Printed Name | _____________________________________________________ |
| 2. | Date of Birth (Natural Persons only) | _____________________________________________________ |
| 2. | Title, if applicable | _____________________________________________________ |
| 3. | Subscriber's Address | |
| Street | _____________________________________________________ | |
| City, State, Zip Code | _____________________________________________________ | |
| Province and Country | _____________________________________________________ | |
| 4. | E-mail Address (optional) | _____________________________________________________ |
| 5. | Home Telephone Number | _____________________________________________________ |
| 6. | Business Telephone Number | _____________________________________________________ |
| 7. | Mobile Telephone Number | _____________________________________________________ |
B. NUMBER OF UNITS PURCHASED. You must purchase at least 1 unit. The minimum number of units to be sold in the offering is 16,910 units and the maximum number of units to be sold is 39,455.
| units |
C. PURCHASE PRICE. Indicate the dollar amount of your investment (minimum investment is $15,000).
| 1. Total Purchase Price ($15,000 per unit multiplied by number of units) | = | 2. 1st Installment (10% of Total Purchase Price) | + | 3. 2nd Installment (90% of Total Purchase Price) |
| = | + |
D. GENERAL INSTRUCTIONS FOR SUBSCRIBERS:
You should read the Prospectus dated [DATE OF EFFECTIVENESS] (the "Prospectus") in its entirety including the exhibits for a complete explanation of an investment in East Coast.
INSTRUCTIONS IF YOU ARE SUBSCRIBING PRIOR TO THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If you are unsure as to whether the Company has release funds from escrow, please contact the Company at ###-###-#### or visit the Company's website at www.eastcoastethanol.us. If you are subscribing prior to the Company’s release of funds from escrow, you must follow the instructions contained in paragraphs 1 through 5 below:
1. Complete all information required in this Subscription Agreement, and date and sign the Subscription Agreement on pages 6-7 and the Member Signature Page to our Operating Agreement attached to this Subscription Agreement as Exhibit A.
2. Immediately provide a personal (or business) check for the first installment of 10% of your investment amount. The check should be made payable to “BB&T Corp., escrow agent for East Coast Ethanol, LLC.” You will determine this amount in box C.2 on page 1 of this Subscription Agreement.
3. Execute the Promissory Note on page 8 of this Subscription Agreement evidencing your commitment to pay the remaining 90% due for the units. The Promissory Note is attached to this Subscription Agreement and grants East Coast Ethanol, LLC legal recourse to recover the 90% balance from you in the event you fail to pay the balance when due.
4. For U.S. persons, please complete Form W-9, Request for Taxpayer Identification Number and Certification or for non-U.S. persons, please complete Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.
5. Deliver the original executed documents referenced in paragraphs 1, 3 and 4 of these instructions, together with a personal or business check as described in Paragraph 2 of these instructions to:
East Coast Ethanol, LLC
1907 Thurmond Mall Post Office Box 2226
Columbia, South Carolina 29202
If you intend to wire transfer funds rather than provide a check for your subscription amount, please contact East Coast directly for wire transfer instructions.
6. Within 20 days of written notice from East Coast that your subscription has been accepted, you must remit an additional personal (or business) check for the second installment of 90% of your investment amount made payable to “BB&T Corp., escrow agent for East Coast Ethanol, LLC” in satisfaction of the Promissory Note. You will determine this amount in box C.3 on page 1 of this Subscription Agreement. You must deliver this check to the same address set forth above in paragraph 4 within 20 days of the date of East Coast's written notice. If you fail to pay the second installment pursuant to the Promissory Note, East Coast shall be entitled to retain your first installment and to seek other damages, as provided in the Promissory Note. This means that if you are unable to pay the 90% balance of your investment amount within 20 days of our notice, you may have to forfeit the 10% cash deposit.
Your funds will be placed in East Coast’s escrow account at BB&T Corp. If East Coast rejects your subscription, your Subscription Agreement and investment will be promptly returned to you, plus any nominal interest. We do not expect to release funds from the escrow account until the following conditions are satisfied: (1) cash proceeds from unit sales deposited in the escrow account equals or exceeds the minimum offering amount of $253,650,000, exclusive of interest; (2) we obtain a written debt financing commitment for debt financing ranging from approximately $269,875,000 to $608,050,000, less any grants and/or tax increment financing we are awarded; (3) we elect, in writing, to terminate the escrow agreement; 4) an affidavit prepared by our escrow agent has been sent to the states in which we have registered units stating that the conditions set out in (1), (2) and (3) have been met; and (5) in each state in which consent is required, the state securities commissioner has consented to release of the funds on deposit. Upon satisfaction of these conditions, we expect that the escrow agreement will terminate, and the escrow agent will disburse the funds on deposit, including interest, to us to be used in accordance with the provisions set out in this prospectus. If we have not satisfied these conditions for releasing funds from escrow by the 12 month anniversary of the effective date of this registration statement, we will return all equity proceeds to investors and terminate the escrow agreement. In that event, investors will receive the entire amount of their paid-in investment being held in escrow plus any allocable interest earned during the escrow period.
2
INSTRUCTIONS IF YOU ARE SUBSCRIBING AFTER THE COMPANY’S RELEASE OF FUNDS FROM ESCROW: If you are subscribing after the Company’s release of funds from escrow, you must follow the instructions contained in paragraphs 1 through 3 below:
1. Complete all information required in this Subscription Agreement, and date and sign the Subscription Agreement on pages 6-7 and the Member Signature Page to our Operating Agreement attached to this Subscription Agreement as Exhibit A.
2. Immediately provide your personal (or business) check for the entire amount of your investment (as determined in box C.1 on page 1) made payable to “East Coast Ethanol, LLC.”
3. For U.S. persons, please complete Form W-9, Request for Taxpayer Identification Number and Certification or for non-U.S. persons, please complete Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.
4. Deliver the original executed documents referenced in paragraphs 1 and 3 of these instructions, together with your personal or business check as described in paragraph 2 to:
| East Coast Ethanol, LLC |
| 1907 Thurmond Mall Post Office Box 2226 |
| Columbia, South Carolina 29202 |
If you intend to wire transfer funds rather than provide a check for your subscription amount, please contact East Coast directly for wire transfer instructions.
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. East Coast may, in its sole discretion, reject or accept any part or all of your subscription. If East Coast rejects your subscription, your Subscription Agreement and investment will be returned to you promptly, plus any nominal interest. East Coast may not consider the acceptance or rejection of your subscription until a future date near the end of this offering.
You may direct your questions to either of our officers/directors listed below or to East Coast at ###-###-####.
| NAME | POSITION | PHONE NUMBER | ||
| Randall Dean Hudson | President/CEO & Director | 229 ###-###-#### | ||
| D. Keith Parrish | Vice President/Operations & Director | 918 ###-###-#### | ||
| John F. Long | Treasurer/Chief Financial Officer & Director | 803 ###-###-#### | ||
| Leon Dupree Hatch Jr. | Director | 386 ###-###-#### | ||
| Julius P. Thompson III | Corporate Secretary/Director | 803 ###-###-#### | ||
| Brian Howell | Director | 912 ###-###-#### | ||
| Roy Laurence Smith III | Director | 912 ###-###-#### | ||
| Kenneth Dasher | Director | 386 ###-###-#### | ||
| Carlie McLamb, Jr. | Director | 910 ###-###-#### |
E. Additional Subscriber Information. Subscriber, named above, certifies the following under penalties of perjury:
3
| 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 7.) |
| o | Corporation, Limited Liability Company or Partnership (Corporate Resolutions, Operating Agreement or Partnership Agreement must be enclosed.) |
| o | Trust |
Trustee’s Name: ________________________________________
Trust Date: ____________________________________________
| ¨ | 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, and/or subject to backup withholding. All individual subscribers should provide their Social Security Numbers. Trusts should provide the trust's taxpayer identification number. Custodians should provide the minor's Social Security Number. Other entities should provide the entity's taxpayer identification number. |
| ¨ | 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 resident 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. Investors (except North Carolina residents) cannot invest in East Coast unless they meet one of the following suitability tests (a or b) set forth below. Residents of North Carolina cannot invest in East Coast unless they meet one of the following suitability tests (c or d) set forth below. Please review the suitability tests and check the box next to the following suitability test that you meet. For husbands and wives purchasing jointly, the tests below will be applied on a joint basis. |
4
| For investors except residents of North Carolina: |
| a. ¨ | 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. ¨ | I (We) have a net worth of $150,000, exclusive of home, home furnishings, and automobiles. |
For North Carolina residents only:
| c. ¨ | I (We) have net worth of at least $70,000 exclusive of home, home furnishings, and automobiles, and minimum annual gross income of $70,000; or |
| d. ¨ | I (We) have a net worth of $250,000, exclusive of home, home furnishings, and automobiles. |
| 6. | Subscriber's Representations and Warranties. You must certify your representations and warranties by placing your initials where indicated and by signing and dating this Subscription Agreement. Joint subscribers are also required to initial and sign as indicated. |
(Initial here) (Joint initials) By signing below the subscriber represents and warrants to East Coast that he, she or it:
| ____ | ____ | a. has received a copy of East Coast's Prospectus dated [DATE OF EFFECTIVENESS] and the exhibits thereto or has received notice that this sale has been made pursuant to a registration statement in which a final prospectus would have been required to have been delivered in the absence of Rule 172; | ||
| ____ | ____ | b. has been informed that the units of East Coast are offered and sold in reliance upon a federal securities registration; state registrations in Florida, Maryland, New York, South Carolina, North Carolina, Virginia and Georgia; and exemptions from securities registrations in various other states and jurisdictions, 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 Florida, Maryland, New York, South Carolina, North Carolina, Virginia and Georgia and that East Coast 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 SEC, or the Florida, Maryland, New York, South Carolina, North Carolina, Virginia and Georgia Securities Departments 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 East Coast'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 been encouraged to seek the advice of his legal counsel and accountants or other financial advisers with respect to investor-specific tax and/or other considerations relating to the purchase and ownership of units; |
5
| ____ | ____ | h. has received a copy of the East Coast Operating Agreement, dated July 27, 2007, and understands that upon closing the escrow by East Coast, 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 certain tax and securities laws along with restrictions in the East Coast 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 tax and securities laws; | ||
| ____ | ____ | j. meets the suitability test marked in Item E.5 above and is capable of bearing the economic risk of this investment, including the possible total loss of the investment; | ||
| ____ | ____ | k. understands that East Coast 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 East Coast in their sole discretion: |
THE TRANSFERABILITY OF THE MEMBERSHIP UNITS REPRESENTED BY THIS DOCUMENT IS RESTRICTED. SUCH UNITS MAY NOT BE SOLD, ASSIGNED, OR TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE, TRANSFEREE OR ENDORSEE THEREOF BE RECOGNIZED AS HAVING ACQUIRED ANY SUCH UNITS FOR ANY PURPOSES, UNLESS AND TO THE EXTENT SUCH SALE, TRANSFER, HYPOTHECATION, OR ASSIGNMENT IS PERMITTED BY, AND IS COMPLETED IN STRICT ACCORDANCE WITH, THE TERMS AND CONDITIONS SET FORTH IN THE OPERATING AGREEMENT OF THE COMPANY, AS AMENDED FROM TIME TO TIME.
THE UNITS REPRESENTED BY THIS DOCUMENT MAY NOT BE SOLD, OFFERED FOR SALE, OR TRANSFERRED IN ABSENCE OF AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER APPLICABLE STATE SECURITIES LAWS.
| ____ | ____ | l. understands that, to enforce the above legend, East Coast 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. may not transfer or assign this Subscription Agreement, or any of the subscriber's interest herein without the prior written consent of East Coast; | ||
| ____ | ____ | n. has written his, her, or its correct taxpayer identification number under Item E.2 on this Subscription Agreement; | ||
| ____ | ____ | o. 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 (o) should be crossed out if the backup withholding box in Item E.2 is checked); and |
6
| ____ | ____ | p. understands that execution of the attached Promissory Note will allow East Coast 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. |
| 7. | Form W-9 or Form W-8BEN. Please provide a completed copy of IRS Form W-9, Request for Taxpayer Identification Number and Certification for U.S. persons or IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding for non U.S. persons. |
| 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 EAST COAST ETHANOL, LLC:
East Coast Ethanol, LLC hereby accepts Subscriber's subscription for _____ units.
Dated this ___ day of _________________________ , 200 __.
| EAST COAST ETHANOL, LLC |
| By: ___________________________________________ |
| Its: ___________________________________________ |
7
PROMISSORY NOTE
Date of Subscription Agreement: ___________________________________, 200_.
$15,000 per Unit
Minimum Investment of 1 Unit ($15,000); Units Sold in 1/3 Unit Increments Thereafter ($5,000 each)
| ____________________ | Number of Units Subscribed | |
| ____________________ | Total Purchase Price ($15,000 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 East Coast Ethanol, LLC, a Delaware limited liability company ("East Coast"), at its principal office located at 1907 Thurmond Mall Post Office Box 2226, Columbia, South Carolina 29202, or at such other place as required by East Coast, the Principal Balance set forth above in one lump sum to be paid without interest within 20 days following the call of the East Coast 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 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 East Coast.
The undersigned agrees to pay to East Coast 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 South Carolina.
The provisions of this Promissory Note shall inure to the benefit of East Coast 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/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 |
8
Exhibit A
MEMBERS SIGNATURE PAGE
ADDENDA
TO THE
OPERATING AGREEMENT OF
EAST COAST ETHANOL, LLC
The undersigned does hereby represent and warrant that the undersigned, as a condition to becoming a Member of East Coast Ethanol, LLC, has received a copy of the Operating Agreement of East Coast Ethanol, LLC (“Operating Agreement”), dated July 27, 2007, and, if applicable, all amendments and modifications thereto, and does hereby agree that the undersigned, along with the other parties to the Operating Agreement, shall be subject to and comply with all terms and conditions of said Operating Agreement in all respects as if the undersigned had executed said Operating Agreement on the original date thereof and that the undersigned is and shall be bound by all of the provisions of said Operating Agreement from and after the date of execution hereof.
| Individuals | Entities | |
| _______________________________________ | ____________________________________________ | |
| Name of Individual Member (Please Print) | Name of Entity (Please Print) | |
| _______________________________________ | ____________________________________________ | |
| Signature of Individual | Print Name and Title of Officer | |
| _______________________________________ | ____________________________________________ | |
| 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: | ||
| EAST COAST ETHANOL, LLC | ||
| BY:______________________________________________ | ||
| ITS:______________________________________________ |
9
