This Voting Agreement (this
“ Agreement ”) is made and entered into as of
this 28 th
day of August, 2009, by and among
Advanced BioEnergy, LLC, a Delaware limited liability company (the
“ Company ”), Hawkeye Energy Holdings, LLC, a
Delaware limited liability company (“ Hawkeye
”), Ethanol Investment Partners, LLC, a Delaware limited
liability company (“ Partners ” and each of
Hawkeye and Partners, an “ Investor ”), South
Dakota Wheat Growers Association, a South Dakota cooperative
(“ SDWG ”), and each of the undersigned
directors (the “ Directors ”) of the Company.
The Company, Hawkeye, Partners, SDWG and Directors are collectively
referred to herein as the “ Parties .” Hawkeye,
Partners, SDWG and Directors are collectively referred to herein as
the “ Members .”
A. On the
date hereof, the Company and Hawkeye entered into that certain
Subscription Agreement (the “ Subscription Agreement
”) and a related letter agreement (the “
Subscription Letter Agreement ” and together with the
Subscription Agreement and the Registration Rights Agreement, the
“ Subscription Documents ”) providing for the
issuance and sale of membership units of the Company (“
Units ”) to Hawkeye (the 2,200,000 Units issued to
Hawkeye on the date hereof, the “ Hawkeye Units
”). Capitalized terms used herein but not otherwise defined
have the meaning given to them in the Subscription
Documents.
B. Prior to
the date hereof, Partners, together with Tennessee Ethanol
Partners, LP, its Affiliate, acquired 3,250,000 Units (the “
Partners Units ”). Partners currently has rights
pursuant to that certain Voting Agreement (the “ Prior
Partners Voting Agreement ”) between the Company,
Partners and certain of the Directors and Officers, dated as of
May 4, 2007, and the Parties desire to amend and restate the
Prior Partners Voting Agreement in its entirety pursuant to this
Agreement.
C. In
connection with the Subscription Documents, two representatives of
Hawkeye were appointed to the board of directors of the Company
(the “ Board ”), and prior to the date hereof
one representative of Ethanol Capital Management, LLC designated by
Partners was elected to the Board.
D. The
Parties desire to cause, in accordance with the terms of this
Agreement, two representatives of Hawkeye (the “ Hawkeye
Board Members ”), two representatives of Ethanol Capital
Management, LLC designated by Partners (the “ Partners
Board Members ”) and the Chief Executive Officer of the
Company (the “ CEO Board Member ”) to be
nominated and elected as members of the Board.
NOW, THEREFORE, in
consideration of the foregoing and the mutual promises contained
herein, the Parties agree as follows:
(a) At each
meeting of the Company’s members at which the Board position
held by any of the Hawkeye Board Members, the Partners Board
Members or the CEO Board Member is up for election, each of the
Parties will, as applicable:
(i) nominate for
election to the Board each of the Hawkeye Board Members, each of
the Partners Board Members and the CEO Board Member (each of such
respective nominees, a “ Designee ”);
(ii) recommend to
the members (or other security holders) of the Company at any
meeting of the members (or other security holders) at which
directors are elected the election of each of the
Designees;
(iii) vote (or act
by written consent) all Units (or other voting equity securities of
the Company) they beneficially own, hold of record or otherwise
control at any time, in person or by proxy, to elect each of the
Designees to the Board;
(iv) not take any
action that would result in (and take any action necessary to
prevent) the removal of any of the Designees from the Board or the
increase in the size of the Board to more than nine members without
the consent of the Hawkeye. Partners and CEO Board Members;
and
(v) not grant a
proxy with respect to any Units that is inconsistent with his, her
or its obligations under this Agreement.
(b) With respect
to the second Partners Board Member, who is not a member of the
Board as of the date of this Agreement, each of the Parties will
have the obligations set forth in Section 1.1(a) from and
after the earlier of (i) such time as a vacancy exists on the
Board (after the appointment of both of the Hawkeye Board Members)
or (ii) the 2010 meeting of the members of the
Company.
1.2 Termination
of Rights . In the event that any Investor ceases to own a
number of Units (or other voting equity securities of the Company)
equal to at least 10% of the then outstanding Units, such Investor
shall no longer have the right to appoint two Designees and shall
instead have the right to appoint one Designee. In the event that
any Investor ceases to own a number of Units (or other voting
equity securities of the Company) equal to at least 5% of the then
outstanding Units, such Investor shall no longer have the right to
appoint any Designee.
1.3 Proxy .
So long as Hawkeye has a right to appoint one or more Designees,
each of the Members hereby grants to Hawkeye an irrevocable proxy
coupled with an interest to vote, including in any action by
written consent, such Member’s Units in accordance with such
Member’s agreement to elect the Hawkeye Board Member(s) to
the Board in accordance with Section 1.1 . So long as
Partners has a right to appoint one or more Designees, each of the
Members hereby grants to Partners an irrevocable proxy coupled with
an interest to vote, including in any action by written consent,
such Member’s Units in accordance with such Member’s
agreement to elect the Partners Board Member(s) to the Board in
accordance with Section 1.1 . Each of the Members
hereby grants to each of the Investors an irrevocable
proxy
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ABE Voting
Agreement
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coupled with an
interest to vote, including in any action by written consent, such
Member’s Units in accordance with such Member’s
agreement to elect the CEO Board Member in accordance with
Section 1.1 .
1.4 Observation
Rights . For so long as Hawkeye owns a number of Units (or
other voting equity securities of the Company) equal to at least
75% of the Hawkeye Units, Hawkeye shall be entitled to appoint at
any one time one representative (the “ Observer
”) to the Board. The Observer shall (a) receive all
notices and information that the Company distributes to the Board
in connection with regularly scheduled meetings (but not special
meetings) of the Board at the same time and manner as given to the
members of the Board and (b) have the right to attend and
observe in a non-voting capacity all regularly scheduled meetings
(but not special meetings) of the Board; provided, however, that
the Company reserves the right to exclude the Observer from access
to any material or meeting or portion thereof if the Company
believes on the advice of counsel that such exclusion is reasonably
necessary to preserve the attorney-client privilege; and, provided
further, that the Observer shall agree to maintain the
confidentiality of all Company information and all proceedings of
the Board to the same extent as he would be required to do if he
were a director of the Company.
1.5
Directors’ and Officers’ Insurance . The Company
shall purchase and maintain for such periods as the Board shall in
good faith determine, at its expense, insurance in an amount
determined in good faith by the Board to be appropriate, on behalf
of any pe
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