EXHIBIT 10.4
EXHIBIT G
PACIFIC ETHANOL, INC.
REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT
THIS REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT (the "Agreement")
dated as of _________, 200_, is by and among PACIFIC ETHANOL, INC., a Delaware
corporation (the "Company") and CASCADE INVESTMENT, L.L.C., a Washington limited
liability company (the "Investor").
WHEREAS, the Company and the Investor have entered into a Purchase
Agreement, dated November 14, 2005 and as amended from time to time (the
"Purchase Agreement"), providing for the purchase by the Investor of shares of
the Company's Series A Cumulative Redeemable Convertible Preferred Stock (such
shares, together with any additional shares of the Company's Series A Cumulative
Redeemable Convertible Preferred Stock issued as a dividend thereon, the
"Shares") which are convertible into shares of the Company's common stock, $.001
par value per share (the "Common Stock"), subject to the terms and provisions of
the Purchase Agreement;
WHEREAS, simultaneously with, and as a condition to, the closing of the
transactions contemplated in the Purchase Agreement, the Company and the
Investor desire to enter into this Agreement to provide certain registration and
other rights with respect to the Common Stock and the Shares held by or issuable
to the Investor and to establish certain corporate governance and other rights
of the Investor; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and the Purchase Agreement, and intending to be
legally bound, the parties hereto agree as follows:
SECTION 1 . DEFINITIONS. As used in this Agreement, the following terms have the
meanings indicated below or in the referenced sections of this Agreement:
"Adjustment Provisions." As defined in SECTION 3(A).
"Affiliate." As defined in the Purchase Agreement.
"Agreement." As defined in the recitals hereof.
"Applicable Boards." As defined in SECTION 10(a)(iii).
"Capital Stock." With respect to any Person at any time, means any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of capital stock, partnership interests (whether
general or limited), member interests or equivalent ownership interests in or
issued by such Person, including, in the case of the Company, any and all shares
of Common Stock and Shares.
"Closing." As defined in the Purchase Agreement.
"Common Stock." As defined in the recitals hereof.
"Company." As defined in the recitals hereof.
"Company Board." The board of directors of the Company.
"Demand Registration." As defined in SECTION 3(A).
"Director." Any member or any of the Applicable Boards.
"Equity Securities." Any and all shares of Capital Stock of the
Company, securities of the Company convertible into, or exchangeable or
exerciseable for, such shares, and options, warrants or other rights to acquire
such shares.
"Exchange Act." The Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"GAAP." Generally accepted accounting principals, as in effect in the
United States of America from time to time applied on a consistent basis.
"Investor." As defined in the recitals hereof, and its successors,
assigns and transferees.
"Investor Designees." As defined in SECTION 10(a)(iii).
"Investor Directors." As defined in SECTION 10(a)(i) hereof.
"Investor Securities." The Shares issued pursuant to the Purchase
Agreement and the Common Stock issued upon the conversion thereof.
"Majority of the Registrable Securities." As defined in SECTION 2(b).
"NASD." The National Association of Securities Dealers, Inc.
"Person." An individual, a partnership, a corporation, a limited
liability company or partnership, an association, a joint stock company, a
trust, a business trust, a joint venture, an unincorporated organization or a
government entity or any department, agency, or political subdivision thereof.
"Piggyback Registration." As defined in SECTION 4(a) hereof.
"Proportional." When used to determine the number of individuals that
the Investor is entitled to nominate to any board of directors at any particular
time, means the number (rounded to the nearest whole number) determined by
multiplying the aggregate number of members of such board by a fraction, the
numerator of which shall be the number of Investor Directors that the Investor
is entitled to designate to the Company Board pursuant to subsection (a) of
SECTION 10 at such time and the denominator of which shall be the total number
of directors constituting the entire Company Board at such time; PROVIDED,
HOWEVER, that, notwithstanding the foregoing, in no event shall such number be
less than one (1).
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"Purchase Agreement." As defined in the recitals hereof.
"Registrable Securities." Any Common Stock issued or issuable upon
conversion or exercise of the Shares or deriving therefrom, and all other shares
of Common Stock of the Company or any successor owned from time to time by the
Investor; PROVIDED, that a Registrable Security ceases to be a Registrable
Security when (i) it is registered under the Securities Act and disposed of in
accordance with the registration statement covering it or (ii) it is sold or
transferred in accordance with the requirements of Rule 144 (or similar
provisions then in effect) promulgated by the SEC under the Securities Act
("Rule 144").
"Registration Expenses." As defined in SECTION 6(a) hereof.
"Registration Statement." Registration Statement shall mean any
registration statements contemplated by SECTION 3 and any additional
registration statements contemplated by SECTION 4, including (in each case) the
prospectus, amendments and supplements to such registration statement or
prospectus, all exhibits attached thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
"Representatives." Of a Person means the officers, employees,
independent accountants, independent legal counsel and other representatives of
such Person.
"Rule 415." Rule 415 (or similar provisions then in effect) promulgated
by the SEC under the Securities Act.
"SEC." The United States Securities and Exchange Commission.
"Securities Act." The Securities Act of 1933, as amended, and the rules
and regulations thereunder.
"Shares." As defined in the recitals hereof.
"Stockholder." As defined in the recitals hereof.
"Subsequent Shares." As defined in SECTION 3(A).
"Subsidiary." Of a Person means any corporation or other entity
(including a limited liability company, partnership or other business entity) in
which such Person, directly or indirectly, owns outstanding Capital Stock or
other Voting Securities having the power, under ordinary circumstances, to elect
a majority of the directors or members of the governing body of such corporation
or other entity or with respect to which such Person otherwise has the power to
direct the management and policies of such corporation or other entity.
"Subsidiary Boards." As defined in SECTION 10(a)(iii).
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"Termination Date." The date that the Investor and its Affiliates, as a
group, own less than 10% of the Investor Securities. For purposes of calculating
such percentage of ownership, each Share shall be deemed to be equivalent to the
number of shares of Common Stock into which they are convertible.
"Voting Letter." As defined in SECTION 10(a)(vi).
"Voting Securities." At any time, shares of any class of Equity
Securities that are ordinarily entitled to vote (without regard to the
occurrence of any additional event or contingency) generally in the election of
directors.
SECTION 2. Securities Subject to this Agreement.
(a) HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a
holder of Registrable Securities whenever that Person owns, directly or
beneficially, or has the right to acquire, Registrable Securities, disregarding
any legal restrictions upon the exercise of that right.
(b) MAJORITY OF REGISTRABLE SECURITIES. As used in this Agreement, the
term "Majority of the Registrable Securities" means more than 50% of the
Registrable Securities being registered or, where the context requires, a
majority in interest of the Registrable Securities.
SECTION 3. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. Subject to the provisions of SECTION
3(B), at any time after the first anniversary of the Closing, (A) one or more
holders of Shares or Common Stock representing a Majority of the Registrable
Securities may demand that the Company register all or part of its Registrable
Securities under the Securities Act (a "DEMAND REGISTRATION") on Form S-1 (or a
similar form then in effect) promulgated by the SEC under the Securities Act,
provided that the Company shall not be obligated to effect a Demand Registration
(i) during the one hundred eighty (180) days period commencing with the date of
any secondary public offering or (ii) if the Company delivers notice to the
holders of Registrable Securities within thirty (30) days of any registration
request of its intent to file a registration statement for a secondary public
offering within sixty (60) days and (B) one or more holders Shares or Common
Stock representing a Majority of the Registrable Securities may request a Demand
Registration on Form S-3 (or a similar form then in effect), provided that the
Registrable Securities to be covered by any such Form S-3 shall be expected to
result in aggregate gross proceeds of not less than $1,000,000. Within ten (10)
days after receipt of a demand, the Company will notify in writing all holders
of Registrable Securities of the demand. Any holder who wants to include its
Registrable Securities in the Demand Registration must notify the Company within
ten (10) business days of receiving the notice of the Demand Registration.
Except as provided in this SECTION 3, the Company will include in all Demand
Registrations all Registrable Securities for which the Company receives the
timely written requests for inclusion. Any such request to be included in a
Demand Registration shall not be counted as a Demand Registration under this
SECTION 3. All demands or requests made pursuant to this SECTION 3(A) must
specify the number of Registrable Securities to be registered and the intended
method of disposing of the Registrable Securities. The Company acknowledges that
the plan of distribution contemplated by any such Registration Statement shall
include offers and sales through underwriters or agents, offers and sales
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directly to investors, block trades and such other methods of offer and sale and
that offers and sales may be on a continued or delayed basis under Rule 415. The
Company will cause such Registration Statement to remain effective until such
time as all of the shares of Common Stock designated thereunder are sold or the
holders thereof are entitled to rely on Rule 144(k) for sales of Registrable
Securities without registration under the Securities Act and without compliance
with the public information, sales volume, manner of sale or notice requirements
of Rule 144(c), (e), (f) or (h). The Company acknowledges that at the time the
Company files any Registration Statement pursuant to this SECTION 3 the number
of Registrable Securities may not be fixed due to the antidilution and other
provisions related to the Shares ("Adjustment Provisions") and due to possible
future issuances of Shares as dividends on the Shares ("Subsequent Shares").
Accordingly, the Company agrees that it will register the number of shares of
Common Stock issuable upon conversion of Shares held by or issuable to the
Investor as of the date of the filing of the Registration Statement and, to the
extent permitted under the applicable rules under the Securities Act, the
additional number of shares of Common Stock issuable pursuant to the Adjustment
Provisions. The Company agrees that, thereafter, it will file, as soon as
practicable but in no event later than thirty (30) days after the issuance of
additional Registrable Securities that are not covered by such Registration
Statement (due to the effect of the Adjustment Provisions and the Subsequent
Shares) such amendments and/or supplements to the Registration Statement, and
such additional Registration Statements as are necessary in order to ensure that
at least 100% of the number of shares of Common Stock issuable on conversion of
the Shares held by or issuable to the Investor are included in a Registration
Statement, and the Company will use its reasonable best efforts to cause such
amendments, supplements and additional Registration Statements to be declared
effective within ninety (90) days following the issuance of such additional
Registrable Securities that are not otherwise covered by an effective
Registration Statement.
(b) NUMBER OF DEMANDS. The holders of Registrable Securities shall have
the right to three (3) Demand Registrations on Form S-1 (or a similar form then
in effect) and shall have the right to an unlimited number of Demand
Registrations on Form S-3 (or a similar form then in effect); PROVIDED, that the
Company shall not be obligated to effect more than two (2) Demand Registrations
on Form S-3 in any twelve (12) month period.
(c) REGISTRATION EXPENSES. The Company shall pay or reimburse to the
holders of the Registrable Securities included in a Demand Registration all
Registration Expenses of those holders in connection with any Demand
Registration (including the reasonable fees and disbursements of one counsel for
such holders in connection with each such Demand Registration not to exceed
$25,000 per registration, as described in SECTION 6).
(d) SELECTION OF UNDERWRITERS. The holders of the Registrable
Securities initiating a Demand Registration shall, after consultation with the
Company, select the investment banker(s) and manager(s) that will administer the
offering; PROVIDED, that the Company shall have given its prior written consent
to such selection. The Company and the holders of Registrable Securities whose
shares are being registered shall enter into a customary underwriting agreement
with such investment banker(s) and manager(s).
(e) PRIORITY ON DEMAND RESTRICTIONS. If the managing underwriter shall
advise the Company, in writing or otherwise, that an underwriters'
over-allotment option, not in excess of fifteen percent (15%) of the total
offering to be so effected, is necessary or desirable for the marketing of such
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offering, all Registrable Securities which are to be included in such offering
pursuant to this SECTION 3(E) and any other securities shall be allocated pro
rata to the primary portion of such offering and the underwriters'
over-allotment portion on the basis of the total number of Registrable
Securities and other securities requested to be included in the registration. If
any holder of Registrable Securities (other than the holder making the demand)
disapproves of the terms of the underwriting, such holder may withdraw therefrom
by giving written notice to the Company and the managing underwriter.
(f) DELAY IN FILING. Notwithstanding the foregoing, the Company may
delay in filing a registration statement in connection with a Demand
Registration and may withhold efforts to cause the registration statement to
become effective, if the Company determines in good faith that such registration
might involve initial or continuing disclosure obligations that the Board of
Directors of the Company determines, in good faith, will not be in the best
interest of the Company's stockholders. The Company may exercise such right to
delay or withhold efforts not more than once in any twelve (12) month period and
for not more than ninety (90) days at a time. If, after a registration statement
becomes effective, the Company advises the holders of registered shares that the
Company considers it appropriate for the registration statement to be amended,
the Company shall use its best efforts to amend such registration statement, and
the holders of such shares shall suspend any further sales of their registered
shares until the Company advises them that the amended registration statement
has been declared effective.
(g) EFFECTIVE DEMAND REGISTRATION. A registration shall not constitute
a Demand Registration until it has become effective and remains continuously
effective for the lesser of (i) the period during which all Registrable
Securities registered in the Demand Registration are sold and (ii) three hundred
sixty (360) days; PROVIDED, HOWEVER, that a registration shall not constitute a
Demand Registration if (x) after such Demand Registration has become effective,
such registration or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court for any
reason not attributable to the holder requesting the Demand Registration and
such interference is not thereafter eliminated, or (y) the conditions specified
in the underwriting agreement, if any, entered into in connection with such
Demand Registration are not satisfied or waived, other than by reason of a
failure on the part of the holder requesting the Demand Registration.
SECTION 4. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. Whenever the Company proposes to register any
of its securities in an underwritten offering under the Securities Act, whether
for its own account or for the account of another stockholder (except for the
registration of securities to be offered pursuant to an employee benefit plan on
Form S-8, pursuant to a registration made on Form S-4 or any successor forms
then in effect) at any time other than pursuant to a Demand Registration and the
registration form to be used may be used for the registration of the Registrable
Securities (a "Piggyback Registration"), it will so notify in writing all
holders of Registrable Securities no later than the earlier to occur of (i) the
tenth (10th) day following the Company's receipt of notice of exercise of other
demand registration rights, or (ii) forty-five (45) days prior to the
anticipated filing date. Subject to the provisions of SECTION 4(c), the Company
will include in the Piggyback Registration all Registrable Securities with
respect to which the Company has received written requests for inclusion within
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fifteen (15) days after the issuance of the Company's notice. Such Registrable
Securities may be made subject to an underwriters' over-allotment option, if so
requested by the managing underwriter. The holders of Registrable Securities may
withdraw all or any part of the Registrable Securities from a Piggyback
Registration at any time before ten (10) business days prior to the effective
date of the Piggyback Registration. In any Piggyback Registration, the Company,
the holders of Registrable Securities and any Person who hereafter becomes
entitled to register its securities in a registration initiated by the Company
must sell their securities on the same terms and conditions. A registration of
Registrable Securities pursuant to this SECTION 4 shall not be counted as a
Demand Registration pursuant to SECTION 3.
(b) PIGGYBACK EXPENSES. The Company shall pay or reimburse to the
holders of the Registrable Securities included in a Piggyback Registration all
Registration Expenses of those holders in connection with the Piggyback
Registration (including the reasonable fees and disbursements of one counsel for
such holders in connection with each such Piggyback Registration not to exceed
$25,000 per Piggyback Registration, as described in SECTION 6).
(c) UNDERWRITING; PRIORITY ON PIGGYBACK REGISTRATIONS. The right of any
such holder to be included in an underwritten registration pursuant to this
SECTION 4 shall be conditioned upon such holder's participation in such
underwriting and the inclusion of such holder's Registrable Securities in the
underwriting to the extent provided herein. All holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. If the managing underwriter gives
the Company its written opinion that the total number or dollar amount of
securities requested to be included in the registration exceeds the number or
dollar amount of securities that can be sold, the Company will include the
securities in the registration in the following order of priority: (i) first,
subject to the first proviso below, all securities the Company or the
stockholder, if any, on whose account securities are being registered proposes
to sell; (ii) second, subject to the first proviso below, up to the full number
or dollar amount of Registrable Securities requested to be included in the
registration (allocated pro rata among the holders of Registrable Securities
requested to be included in the registration, on the basis of the dollar amount
or number of Registrable Securities requested to be included, as the case may
be); and (iii) third, any other securities (provided they are of the same class
as the securities sold by the Company) requested to be included, allocated among
the holders of such securities in such proportions as the Company and those
holders may agree; PROVIDED, that at least twenty-five percent (25%) of the
Registrable Securities requested to be included in such registration shall be
included in the offering; PROVIDED, FURTHER, that, (i) the holders of
Registrable Securities shall not be subject to any cutback in the amount of
Registrable Securities requested to be included in the registration unless all
other holders of securities requesting to be included in such registration other
than the stockholder, if any, on whose account securities are being registered
have been excluded from such registration. In the event that the managing
underwriter advises the Company that an underwriters' over-allotment option is
necessary or advisable, the allocation provided for in this SECTION 4(C) shall
apply to the determination of which securities are to be included in the
registration of such shares. Except with the prior written consent of each
holder of Registrable Securities, the Company shall not grant to any holder of
the Company's securities any right to Piggyback Registration which would reduce
the amount of Registrable Securities includable in such registration.
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(d) SELECTION OF UNDERWRITERS. If any Piggyback Registration is an
underwritten offering, the Company will select as the investment banker(s) and
manager(s) that will administer the offering a nationally recognized investment
banker(s) and manager(s) with demonstrable industry-specific expertise and
experience. The Company and the holders of Registrable Securities whose shares
are being registered shall enter into a customary underwriting agreement with
such investment banker(s) and manager(s), PROVIDED, that the liability of any
holder of Registrable Securities shall be limited to such holder's net proceeds
received from the sale of its Registrable Securities in such offering and such
limitation shall not be amended by an underwriting agreement or arrangement.
(e) RIGHT TO TERMINATE REGISTRATION. The Company shall have the right
to terminate or withdraw any registration initiated by it under this SECTION 4
prior to the effectiveness of such registration whether or not any holder has
elected to include securities in such registration. The Registration Expenses of
such withdrawn registration shall be borne by the Company in accordance with
SECTION 7 hereof.
(f) OTHER REGISTRATIONS. The Company agrees that after filing a
registration statement with respect to Registrable Securities pursuant to
SECTION 3 or this SECTION 4 that has not been withdrawn or abandoned, the
Company will not register any of its equity securities or securities convertible
or exchangeable into or exercisable for its equity securities under the
Securities Act, whether on its own behalf or at the request of any holder of
those securities until the earlier of (i) the sale of all such Registrable
Securities subject to such registration statement and (ii) one hundred eighty
(180) days from the effective date of the previous registration, and the parties
hereto agree that the Company will not be required to effect any such
registration notwithstanding the other provisions of this Agreement. This
180-day hiatus does not apply to registrations of securities (i) to be issued in
connection with employee benefit plans, (ii) to permit exercise or conversions
of previously issued options, warrants, or other convertible securities, (iii)
in connection with a Demand Registration or (iv) made on Form S-4 (or any
successor form).
SECTION 5. REGISTRATION PROCEDURES.
(a) OBLIGATIONS OF THE COMPANY. Whenever required to register any
Registrable Securities, the Company shall as expeditiously as practicable:
(1) prepare and file with the SEC to permit a public offering
and resale of the Registrable Securities under the Securities Act which
offering may, if so requested, be on a delayed or continuous basis
under Rule 415 a registration statement on the appropriate form and use
best efforts to cause the registration statement to become effective.
At least ten (10) days before filing a registration statement or
prospectus or at least three (3) business days before filing any
amendments or supplements thereto, the Company will furnish to the
counsel of the holders of a Majority of the Registrable Securities
being registered copies of all documents proposed to be filed for that
counsel's review and approval, which approval shall not be unreasonably
withheld or delayed;
(2) immediately notify each seller of Registrable Securities
of any stop order threatened or issued by the SEC and take all actions
reasonably required to prevent the entry of a stop order or if entered
to have it rescinded or otherwise removed;
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(3) prepare and file with the SEC such amendments and
supplements to the registration statement and the corresponding
prospectus necessary to keep the registration statement effective, in
the case of the registration required by SECTION 3 hereof for the
period provided in SECTION 3 and in any other case for one hundred
twenty (120) days or such shorter period as may be required to sell all
Registrable Securities covered by the registration statement; and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by the registration statement
during each period in accordance with the sellers' intended methods of
disposition as set forth in the registration statement;
(4) furnish to each seller of Registrable Securities a
sufficient number of copies of the registration statement, each
amendment and supplement thereto (in each case including all exhibits),
the corresponding prospectus (including each preliminary prospectus),
and such other documents as a seller may reasonably request to
facilitate the disposition of the seller's Registrable Securities;
(5) use its best efforts to register or qualify the
Registrable Securities under securities or blue sky laws of
jurisdictions in the United States of America as any seller requests
within twenty (20) days following the original filing of a registration
statement and do any and all other reasonable acts and things that may
be necessary or advisable to enable the seller to consummate the
disposition of the seller's Registrable Securities in such
jurisdiction; PROVIDED, HOWEVER, that the Company shall not be
obligated to qualify as a foreign corporation to do business under the
laws of any jurisdiction in which it is not then qualified or to file
any general consent to service of process;
(6) notify each seller of Registrable Securities, at any time
when a prospectus is required to be delivered under the Securities Act,
of any event as a result of which the prospectus or any document
incorporated therein by reference contains an untrue statement of a
material fact or omits to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under
which such statements were made, and use best efforts to prepare a
supplement or amendment to the prospectus or any such document
incorporated therein so that thereafter the prospectus will not contain
an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light
of the circumstances under which such statements were made;
(7) cause all registered Registrable Securities to be listed
on each securities exchange, if any, on which similar securities issued
by the Company are then listed;
(8) provide an institutional transfer agent and registrar and
a CUSIP number for all Registrable Securities on or before the
effective date of the registration statement;
(9) enter into such customary agreements, including an
underwriting agreement in customary form and take all other actions in
connection with those agreements as the holders of a Majority of the
Registrable Securities being registered or the underwriters, if any,
reasonably request to expedite or facilitate the disposition of the
Registrable Securities;
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(10) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any
disposition pursuant to the registration statement, and any attorney,
accountant, or other agent of any seller or underwriter, all financial
and other records, pertinent corporate documents, and properties of the
Company, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any seller, underwriter,
attorney, accountant, or other agent in connection with the
registration statement; PROVIDED that an appropriate confidentiality
agreement is executed by any such seller, underwriter, attorney,
accountant or other agent;
(11) in connection with any underwritten offering, obtain a
"comfort" letter from the Company's independent public accountants in
customary form and covering those matters customarily covered by
"comfort" letters as the holders of a Majority of the Registrable
Securities being registered or the managing underwriter reasonably
requests, addressed to the underwriters and to the holders of the
Registrable Securities being registered;
(12) in connection with any underwritten offering, furnish an
opinion of counsel representing the Company for the purposes of the
registration, in the form and substance customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to counsel representing the holders of Registrable
Securities being registered and the underwriter(s) of the offering,
addressed to the underwriters and to the holders of the Registrable
Securities being registered;
(13) use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders,
as soon as reasonably practicable, an earnings statement complying with
the provisions of Section 11(a) of the Securities Act and covering the
period of at least twelve (12) months, but not more than eighteen (18)
months, beginning with the first month after the effective date of the
Registration Statement;
(14) cooperate with each seller of Registrable Securities and
each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings
required to be made with the NASD; and
(15) take all other steps reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
(b) SELLER INFORMATION. In the event of any registration by the
Company, from time to time, the Company may require each seller of Registrable
Securities subject to the registration to furnish to the Company information
regarding such seller, the Registrable Securities held by them, and the
distribution of the securities subject to the registration, and such seller
shall furnish all such information reasonably requested by the Company.
(c) NOTICE TO DISCONTINUE. Each holder of Registrable Securities agrees
by acquisition of such securities that, upon receipt of any notice from the
Company of any event of the kind described in SECTION 5(a)(6), the holder will
discontinue disposition of Registrable Securities until the holder receives
copies of the supplemented or amended prospectus contemplated by SECTION
5(a)(6). In addition, if the Company requests, the holder will deliver to the
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Company (at the Company's expense) all copies, other than permanent file copies
then in the holder's possession, of the prospectus covering the Registrable
Securities current at the time of receipt of the notice. If the Company gives
any such notice, the time period mentioned in SECTION 5(a)(3) shall be extended
by the number of days elapsing between the date of notice and the date that each
seller receives the copies of the supplemented or amended prospectus
contemplated in SECTION 5(a)(6).
(d) NOTICE BY HOLDERS. Whenever the holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, those holders shall notify the Company, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event concerning that holder of the Registrable Securities, as
a result of which the prospectus included in the registration statement contains
an untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
SECTION 6. REGISTRATION EXPENSES.
All costs and expenses incurred in connection with the Company's
performance of or compliance with this Agreement (the "Registration Expenses")
shall be paid by the Company as provided in this Agreement. The term
"Registration Expenses" includes without limitation all registration filing
fees, reasonable professional fees and other reasonable expenses of the
Company's compliance with federal, state and other securities laws (including
fees and disbursements of counsel for the underwriters in connection with state
or other securities law qualifications and registrations), printing expenses,
messenger, telephone and delivery expenses; reasonable fees and disbursements of
counsel for the Company and for one counsel for the holders of Registrable
Securities not to exceed $25,000 per registration; reasonable fees and
disbursement of the independent certified public accountants selected by the
Company (including the expenses of any audit or "comfort" letters required by or
incident to performance of the obligations contemplated by this Agreement); fees
and expenses of the underwriters (excluding discounts and commissions); fees and
expenses of any special experts retained by the Company at the request of the
managing underwriters in connection with the registration; and applicable stock
exchange and NASDAQ registration and filing fees. The term "Registration
Expenses" does not include underwriting fees or commissions or transfer taxes,
all of which shall be paid by each of the sellers of Registrable Securities with
respect to the Registrable Securities sold by such seller.
SECTION 7. INDEMNIFICATION.
---------------------------
(a) INDEMNIFICATION BY COMPANY. In the event of any registration of
Registrable Securities under the Securities Act pursuant to this Agreement, to
the full extent permitted by law, the Company agrees to indemnify and hold
harmless each holder of Registrable Securities, its officers, directors,
trustees, partners, employees, advisors and agents, and each Person who controls
the holder (within the meaning of the Securities Act and the Exchange Act)
against any and all losses, claims, damages, liabilities and expenses arising
out of (i) any untrue or allegedly untrue statement of material fact contained
in or incorporated by reference into any registration statement or any amendment
thereof under which such Registrable Securities were registered under the
Securities Act, any prospectus or preliminary prospectus contained therein or
any amendment thereof or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except to the extent the untrue statement or omission resulted
11
from information that the holder furnished in writing to the Company expressly
for use therein, and (ii) any failure to comply with any law, rule or regulation
applicable to such registration. Such indemnity shall remain in full force and
effect, regardless of any investigation made by such indemnified party, and
shall survive the transfer of such Registrable Securities by such holder. In
connection with a firm or best efforts underwritten offering, to the extent
customarily required by the managing underwriter, the Company will indemnify the
underwriters, their officers and directors and each Person who controls the
underwriters (within the meaning of the Securities Act and the Exchange Act), to
the extent customary in such agreements.
(b) INDEMNIFICATION BY HOLDERS OF SECURITIES. In connection with any
registration statement, each participating holder of Registrable Securities will
furnish to the Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any registration statement or
prospectus. Each participating holder agrees, severally and not jointly, to
indemnify and hold harmless, to the extent permitted by law, the Company, its
directors, officers, trustees, partners, employees, advisors and agents, and
each Person who controls the Company (within the meaning of the Securities Act
and the Exchange Act) against any and all losses, claims, damages, liabilities
and expenses arising out of any untrue or allegedly untrue statement of a
material fact or any omission or alleged omission to state a material fact
required to be stated in the registration statement or prospectus or any
amendment thereof or supplement thereto necessary to make the statements therein
not misleading, but only to the extent that the untrue statement or omission is
contained in or omitted from any information or affidavit the holder furnished
in writing to the Company expressly for use therein and only in an amount not
exceeding the net proceeds received by the holder with respect to securities
sold pursuant to such registration statement. Such indemnity shall remain in
full force and effect, regardless of any investigation made by the Company, and
shall survive the transfer of such Registrable Securities by such holder. In
connection with a firm or best efforts underwritten offering, to the extent
customarily required by the managing underwriter, each participating holder of
Registrable Securities will indemnify the underwriters, their officers and
directors and each Person who controls the underwriters (within the meaning of
the Securities Act and the Exchange Act), to the same extent as it has
indemnified the Company; PROVIDED, that the indemnity obligations of any holder
contained in such agreement shall be limited to the amount of such holder's net
proceeds received from the sale of its Registrable Securities in such offering.
(c) INDEMNIFICATION PROCEEDINGS. Any Person entitled to indemnification
under this Agreement will (i) give prompt notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (ii) unless in the
indemnified party's reasonable judgment a conflict of interest may exist between
the indemnified and indemnifying parties with respect to the claim, permit the
indemnifying party to assume the defense of the claim with counsel reasonably
satisfactory to the indemnified party. If the indemnifying party does not assume
the defense, the indemnifying party will not be liable for any settlement made
without its consent (but that consent may not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or will enter into any
settlement that does not include as an unconditional term thereof the claimant's
or plaintiff's release of the indemnified party from all liability concerning
the claim or litigation or which includes any non-monetary settlement. An
indemnifying party who is not entitled to or elects not to assume the defense of
a claim will not be under an obligation to pay the fees and expenses of more
than one counsel for all parties indemnified by the indemnifying party with
respect to the claim, unless in the reasonable judgment of any indemnified party
12
a conflict of interest may exist between the indemnified party and any other
indemnified party with respect to the claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of no more than one
additional counsel for the indemnified parties.
(d) CONTRIBUTION. IF THE INDEMNIFICATION PROVIDED FOR IN SECTION 7(A)
OR (B) IS unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying
party thereunder shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnified party and the indemnifying party in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnified party and the indemnifying party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnified party and the
indemnifying party and the parties' relative intent and knowledge.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this SECTION 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding anything herein to the contrary, no participating holder of
Registrable Securities acting as an indemnifying party shall be required to
contribute any amount in excess of the amount by which the net proceeds of the
offering (before deducting expenses, if any) received by such participating
holder exceeds the amount of any damages that such participating holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
The obligations of the Company and the holders of Registrable
Securities under this SECTION 7 shall survive the completion of any offering of
Registrable Securities in a registration statement, including the termination of
this Agreement.
SECTION 8. RULE 144. With a view to making available to the holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
(c) So long as a holder owns any Registrable Securities, furnish
to such holder forthwith upon request: a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 of the
13
Securities Act, and of the Exchange Act (at any time after it has become subject
to such reporting requirements); a copy of the most recent annual or quarterly
report of the Company; and such other reports and documents as a holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.
SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATION. No Person may
participate in any underwritten registration without (a) agreeing to sell
securities on the basis provided in underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements (the holders of
Registrable Securities in a Demand Registration pursuant to SECTION 3(D) and the
Company in a piggyback registration pursuant to SECTION 4(D)), and (b)
completing and executing all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required by the underwriting
arrangements.
SECTION 10. BOARD REPRESENTATION. (a) During the period commencing on
the date of the Closing and ending on the Termination Date:
(i) the Investor shall be entitled to nominate two individuals
for election to the Company Board, and each party hereto that holds Voting
Securities agrees to vote such Voting Securities in favor of the election of
such individuals (the "Investor Directors") to the Company Board;
(ii) the Company agrees, by action of the Company Board, (i)
to establish, by appointment from among the members of the Company Board, and
maintain a Compensation Committee and (ii) to the greatest extent permitted by
applicable law and the rules and regulations of NASDAQ or any national
securities exchange on which the Company's Common Stock is listed, to appoint to
the Compensation Committee one of the Investor Directors, as designated by the
Investor;
(iii) if requested by the Investor, the Company agrees to
elect or to cause to be elected, through action of the Company Board, to the
board of directors of or management committee, as the case may be, each
Subsidiary of the Company (the "Subsidiary Boards" and, together with the
Company Board, the "Applicable Boards") a number of individuals designated by
the Investor, who need not be directors, officers or employees of the Company or
any of its Subsidiaries, that is, in the case of each Subsidiary Board, as
nearly as is practicable, Proportional to the number of members of each such
Subsidiary Board (together with the Investor's designated member of the
Compensation Committee, the "Investor Designees");
(iv) the Company agrees to permit one of the Investor
Directors or another individual designated by the Investor, who need not be a
director, officer or employee of the Company or any of its Subsidiaries, to
attend as a non-voting observer all meetings of the Executive Committee and the
Audit Committee and Subsidiary Boards for which there shall be no Investor
Designee and to transmit to such individual, at the time and in the manner sent
to other members of such committees and board, all information and materials
provided by the Company to such committee and board members;
14
(v) the Company agrees to provide advance notice in accordance
with the Delaware General Corporation Law and the Company's bylaws to each
Investor Director with respect to each regular and special meeting of the
Company Board and the Compensation Committee which notice shall, in the case of
each special meeting, include a reasonable summary of the subject matter of the
meeting; and
(vi) the Company agrees to cause each person serving from time
to time as an executive officer, director or manager of the Company or any
Subsidiary of the Company (other than the Investor Directors and the Investor
Designees) to execute and deliver to the Investor a Voting Letter substantially
in the form of EXHIBIT A hereto (each a "Voting Letter").
(b) Each party hereto agrees to take such actions, including actions as
necessary or desirable to nominate and elect individuals to the intended offices
and, in the case of the Company, actions by the Company Board, as shall be
necessary or desirable in order that, effective as of the Closing:
(i) the Company Board shall include the Investor Directors;
(ii) the Compensation Committee shall include the Investor
Director required by SECTION 10(a);
(iii) each other Applicable Board shall include the Investor
Designees to the extent required by subsection (ii) of SECTION 10(a); and
(iv) each current executive officer and director of the
Company and each current executive officer, director or manager of any of its
Subsidiaries shall have executed and delivered to the Investor, a Voting Letter.
(c) No Investor Director or Investor Designee shall be subject to
removal, without cause, from any Applicable Board or the Compensation Committee
other than with the express written consent of the Investor. If the Investor
shall determine to remove any Investor Director or Investor Designee from any
Applicable Board or the Compensation Committee, each party hereto agrees, upon
written notice to such effect from the Investor, to take all actions reasonably
necessary or desirable, including the voting of outstanding Voting Securities
held by such party, in order to effect such action. Following such removal of an
Investor Director or Investor Designee, the parties shall comply with the other
provisions of this Section to ensure that the removed individual is replaced by
another Investor Director or Investor Designee, as appropriate.
(d) If a vacancy is created on any Applicable Board or the Compensation
Committee by virtue of the death, disability, retirement, resignation or removal
of any Investor Director or Investor Designee from any Applicable Board or the
Compensation Committee, each party hereto shall, to the extent permitted by
applicable laws and regulations, take promptly any and all actions, including
the voting of outstanding Voting Securities held by such party and, in the case
of the Company, actions by the Company Board, necessary or desirable to fill
such vacancy with an individual designated in writing by the Investor so as to
give effect to the provisions of SECTION 10(a).
15
(e) Immediately following the Termination Date, the Investor shall
cause the Investor Directors or Investor Designees to resign from all of the
Applicable Boards, effective as of the Termination Date. The Investor agrees to
take all actions reasonably necessary or desirable, including the voting of
outstanding Voting Securities held by it, in order to effect such action.
SECTION 11. AVAILABLE FINANCIAL INFORMATION. For so long as the Company
is not a reporting issuer under the Exchange Act or, if having been such a
reporting issuer, it shall cease to be such a reporting issuer or for so long as
the Company shall fail to comply with its reporting obligations under the
Exchange Act, the Company shall, to the extent that the Investor beneficially
owns any of the Shares or Common Stock, deliver, or cause to be delivered, to
the Investor:
(a) as soon as practicable after the end of each fiscal year of the
Company, and in any event within ninety (90) days thereafter, a consolidated and
consolidating balance sheets of the Company as of the end of such fiscal year,
and consolidated and consolidating statements of income, changes in
shareholders' equity and cash flows of the Company for such year, prepared in
accordance with GAAP and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and followed
promptly thereafter (to the extent not then available) by such financial
statements accompanied by the audit report with respect thereto of independent
public accountants of recognized national standing selected by the Company; and
(b) as soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company, and in any
event within forty-five (45) days after the end of each such period,
consolidated balance sheets of the Company as of the end of each quarterly
period, and consolidated statements of income, changes in shareholders' equity
and cash flows of the Company for such period and for the current fiscal year to
date, prepared in accordance with GAAP and setting forth in comparative form the
figures for the corresponding periods of the previous fiscal year, subject to
changes resulting form normal year-end audit adjustments, all in reasonable
detail and certified by the principal financial or accounting officer of the
Company.
SECTION 12. ACCESS. During the period commencing on the date of the
Closing and ending on the Termination Date, the Company shall afford, provide
and furnish, and shall cause its Subsidiaries and the Representatives of the
Company and its Subsidiaries to afford, provide and furnish to the Investor and
their Representatives:
(i) during normal business hours and upon reasonable advance
notice, reasonable access to the Representatives, properties, plants and other
facilities and to all books and records of the Company and each of its
Subsidiaries;
(ii) all financial, operating and other data and information
regarding the Company and its Subsidiaries as the Investor and its
Representatives may reasonably request; and
(iii) the opportunity to discuss the affairs, finances,
operations and accounts of the Company and its Subsidiaries with the Company's
officers on a periodic basis.
SECTION 13. MISCELLANEOUS.
(a) RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this Agreement
shall apply to the full extent set forth herein with respect to (i) the
Registrable Securities, (ii) any and all shares of voting common stock of the
16
Company into which the Registrable Securities are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, or as a dividend upon, the Registrable Securities and
shall be appropriately adjusted for any stock dividends, splits, reverse splits,
combinations, recapitalizations and the like occurring after the date hereof.
The Company shall use its best efforts to cause any successor or assign (whether
by sale, merger or otherwise) to enter into a new registration rights agreement
with the holders of Registrable Securities on terms substantially the same as
this Agreement as a condition of any such transaction.
(b) AMENDMENT. This Agreement may be amended or modified only by a
written agreement executed by (i) the Company and (ii) the Investor.
(c) ATTORNEYS' FEES. In any legal action or proceeding brought to
enforce any provision of this Agreement, the prevailing party shall be entitled
to recover all reasonable expenses, charges, court costs and attorneys' fees in
addition to any other available remedy at law or in equity.
(d) BENEFIT OF PARTIES; ASSIGNMENT. Subject to the terms and conditions
of the Purchase Agreement and this subsection (d), including, without
limitation, the transfer restrictions contained therein, all of the terms and
provisions of this Agreement shall be binding on and inure to the benefit of the
parties and their respective successors and assigns, including, without
limitation, all subsequent holders of securities entitled to the benefits of
this Agreement who agree in writing to become bound by the terms of this
Agreement.
(e) CAPTIONS. The captions of the sections and subsections of this
Agreement are solely for convenient reference and shall not be deemed to affect
the meaning or interpretation of any provision of this Agreement.
(f) COOPERATION. The parties agree that after execution of this
Agreement they will from time to time, upon the request of any other party and
without further consideration, execute, acknowledge and deliver in proper form
any further instruments and take such other action as any other party may
reasonably require to carry out effectively the intent of this Agreement.
(g) COUNTERPARTS; FACSIMILE EXECUTION. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Facsimile execution and delivery of this Agreement shall be legal, valid and
binding execution and delivery for all purposes.
(h) ENTIRE AGREEMENT. Each party hereby acknowledges that no other
party or any other person or entity has made any promises, warranties,
understandings or representations whatsoever, express or implied, not contained
in the Transaction Documents (as defined in the Purchase Agreement) and
acknowledges that it has not executed this Agreement in reliance upon any such
promises, representations, understandings or warranties not contained herein or
therein and that the Transaction Documents supersede all prior agreements and
understandings between the parties with respect thereto. There are no promises,
covenants or undertakings other than those expressly set forth or provided for
in the Transaction Documents.
17
(i) GOVERNING LAW. The internal law of the State of Washington will
govern the interpretation, construction, and enforcement of this Agreement and
all transactions and agreements contemplated hereby, notwithstanding any state's
choice of law rules to the contrary.
(j) SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF PROCESS. The
parties hereto hereby irrevocably submit to the exclusive jurisdiction of any
federal or state court located within King County, Washington, over any dispute
arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action or proceeding related thereto shall
be heard and determined in such courts. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such dispute.
Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(k) NO INCONSISTENT AGREEMENTS. The Company represents and warrants
that, except as disclosed in the Purchase Agreement, it has not granted to any
Person the right to request or require the Company to register any securities
issued by the Company other than the rights contained herein. The Company shall
not, except with the prior written consent of at least a majority in interest of
the Registrable Securities held by the Investor, enter into any agreement with
respect to its securities that shall grant to any Person registration rights
that in any way conflict with or are prior to or equal in right to the rights
provided under this Agreement.
(l) NOTICES. All notices, requests, demands, or other communications
that are required or may be given pursuant to the terms of this Agreement shall
be in writing and properly addressed to the addresses of the parties set forth
in the Purchase Agreement or to such other address(es) as the respective parties
hereto shall from time to time designate to the other(s) in writing. All notices
shall be effective upon receipt.
(m) SPECIFIC PERFORMANCE. Each of the parties agrees that damages for a
breach of or default under this Agreement would be inadequate and that in
addition to all other remedies available at law or in equity that the parties
and their successors and assigns shall be entitled to specific performance or
injunctive relief, or both, in the event of a breach or a threatened breach of
this Agreement.
(n) VALIDITY OF PROVISIONS. Should any part of this Agreement for any
reason be declared by any court of competent jurisdiction to be invalid, that
decision shall not affect the validity of the remaining portion, which shall
continue in full force and effect as if this Agreement had been executed with
the invalid portion eliminated; provided, however, that this Agreement shall be
interpreted to carry out to the greatest extent possible the intent of the
parties and to provide to each party substantially the same benefits as such
party would have received under this Agreement if such invalid part of this
Agreement had been enforceable. Whenever the words "include" or "including" are
used in the Agreement, they shall be deemed to be followed by the words "without
limitation."
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PACIFIC ETHANOL, INC.
By: _______________________________
Name:
Title:
CASCADE INVESTMENT, L.L.C.
By: _______________________________
Name:
Title:
19
EXHIBIT A
---------
_______________, 200_
Pacific Ethanol, Inc.
5711 N. West Ave.
Fresno, CA 93711
Attention: __________
Cascade Investment, L.L.C.
2365 Carillon Point
Kirkland, WA 98033
Attention: __________
VOTING LETTER AGREEMENT
Ladies and Gentlemen:
This letter agreement (this "Voting Letter Agreement") sets forth
certain agreements relating to a Registration Rights and Stockholders Agreement
(the "Registration Rights and Stockholders Agreement") dated as of ________,
200_, by and among Pacific Ethanol, Inc., a Delaware corporation (the "Company")
and Cascade Investment, L.L.C., a Washington limited liability company (the
"Investor"). Capitalized terms used herein without definition have the meanings
ascribed to them in the Registration Rights and Stockholders Agreement. In order
to induce the Investor to enter into the Purchase Agreement and purchase the
Shares and in consideration of the agreements set forth in this Registration
Rights and Stockholders Agreement, the undersigned, an executive officer,
director or manager of the Company or one of its Subsidiaries (the "Insider"),
agrees as follows:
1. The Insider hereby grants to the Company an irrevocable proxy,
coupled with an interest, to vote all of the Voting Securities now or hereafter
owned by such Insider or over which such Insider has voting control in favor of
the Investor Directors at any general or special meeting of stockholders of the
Company at which directors are to be elected. The Insider further agrees to take
such other actions as may be within his or her authority as an officer or
director of the Company and/or one of the Subsidiaries of the Company to carry
out the provisions of SECTION 10 of the Registration Rights and Stockholders
Agreement.
2. The Insider further agrees that such Insider will not vote any
Voting Securities owned by such Insider or over which such Insider has voting
control, or take any action by written consent, or take any other action as a
shareholder of the Company, to circumvent the voting arrangements required by
SECTION 10 of the Registration Rights and Stockholders Agreement or this Voting
Letter Agreement. The Insider hereby agrees to vote or cause to be voted or
cause such Insider's designees as directors to vote all Voting Securities owned
by such Insider or over which such Insider has voting control so as to comply
with SECTION 10 of the Registration Rights and Stockholders Agreement and this
Voting Letter Agreement. The provisions set forth herein constitute a voting
agreement under Section 218 of the Delaware General Corporation Law, as amended,
and, in connection therewith, the Insider expressly consents to the enforcement
of this Voting Letter Agreement by specific performance.
3. This Voting Letter Agreement shall terminate on the earlier of the
Termination Date and the date that the Insider is not an officer, director,
manager or employee of the Company or any of its Subsidiaries.
[4. To the extent, if any, that the provisions of this Voting Letter
Agreement would conflict with the provisions of the Voting Agreement, dated as
of October 27, 2003, relating to the election of Frank P. Greinke as a director,
the provisions of this Voting Letter Agreement shall supercede and control. The
Insider further consents and agrees that ____________________ and
______________________ may execute and deliver a voting letter agreement
substantially similar to this Voting Letter Agreement.] [To be included in
Messrs. Jones, Turner and Greinke's Voting Letter Agreements. Blanks to be
filled in with the names of the other two such persons.]
Very truly yours,
By: ______________________________
Name:
Title:
2