Second Amendment to Investor Rights Agreement
Exhibit 4.5
Second Amendment to Investor Rights Agreement
This Second Amendment (the “Amendment”) is entered into as of August 28, 2009, by and among
Advanced BioEnergy, LLC, a Delaware limited liability company (the “Company”), and South Dakota
Wheat Growers Association, a South Dakota cooperative (“SDWG”).
Background
A. On November 8, 2006, the Company and SDWG entered into an investor rights agreement (as
amended, the “SDWG Investor Rights Agreement”) in connection with the purchase by the Company of
SDWG’s limited partnership interest in Heartland Grain Fuels, L.P. (“HGF”).
B. On August 21, 2009, the Company entered into a subscription agreement with Hawkeye Energy
Holdings, LLC (“Hawkeye”) pursuant to which the Company agreed to enter into a registration rights
agreement with Hawkeye (the “Hawkeye Registration Rights Agreement”), provided the Company first
obtained, among other third party consents, SDWG’s consent to grant such rights.
C. In connection with the execution of the Hawkeye Registration Rights Agreement, ABE and SDWG
desire to amend the SDWG Investor Rights Agreement as follows:
Agreement
1. Amendment to Article 1. Article 1 of the SDWG Investor Rights Agreement is hereby
amended and restated in its entirety as set forth in the attached Exhibit A.
2. Amendment to Section 2.3(a). Section 2.3(a) of the SDWG Investor Rights Agreement
is hereby amended and restated in its entirety as set forth in the attached Exhibit B.
3. Amendment to Section 2.7. Section 2.7 of the SDWG Investor Rights Agreement is
hereby amended and restated in its entirety as set forth in Exhibit C.
4. Amendment to Section 2.9. Section 2.9 of the SDWG Investor Rights Agreement is
hereby amended by adding the following sentence to the end of that provision:
“The Company shall not amend the Hawkeye Registration Rights Agreement or the EIP
Registration Rights Agreement in a manner adverse to the Holders without the prior
written consent of a majority in interest of the Holders.”
5. Governing Law. The parties to this Amendment intend for the laws of the State of
Minnesota to govern the validity of this Amendment, the construction of its terms and the
interpretation of the rights and duties of the parties, without regard to the conflict of law
provisions of such state.
6. Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original and enforceable against the parties actually executing such
counterpart, and all of which together shall constitute one and the same instrument.
7. Miscellaneous. Except as specifically amended herein, the SDWG Investor Rights
Agreement shall remain in full force and effect, as so amended. Any reference to this “Amendment,”
shall include the Recitals set forth in the beginning of this Amendment.
[Remainder of the page intentionally left blank.]
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This Amendment has been executed by the parties hereto as of the date first set forth above.
| ADVANCED BIOENERGY LLC | ||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||||
| ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | ||||||
| President, Chief Executive Officer and Chief Financial Officer | ||||||
| SOUTH DAKOTA WHEAT GROWERS ASSOCIATION | ||||||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |||||
| ▇▇▇▇ ▇▇▇▇▇▇ | ||||||
| Chief Executive Officer and Treasurer | ||||||
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EXHIBIT A
AMENDED AND RESTATED ARTICLE 1
1. Definitions. For purposes of this Agreement:
1.1 “Additional Financing” means the sale by the Company of additional Units as contemplated
by the registration statement on Form SB-2 filed by the Company with the SEC on September 13, 2006,
as amended from time to time thereafter.
1.2 “Affiliate” means, with respect to any specified Person, any other Person who or which,
directly or indirectly, controls, is controlled by, or is under common control with such specified
Person, including without limitation any general partner, officer, director, or manager of such
Person.
1.3 “Damages” means any loss, damage, or liability to which a party hereto may become subject
under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss,
damage, or liability (or any action in respect thereof) arises out of or is based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in any registration
statement of the Company, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto; (b) an omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the statements therein
not misleading; or (c) any violation or alleged violation by the indemnifying party (or any of its
agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any
rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities
law.
1.4 “Derivative Securities” means any securities or rights convertible into, or exercisable or
exchangeable for (in each case, directly or indirectly), Units, including options and warrants.
1.5 “EIP” means Ethanol Investment Partners, LLC, a Delaware limited liability company.
1.6 “EIP Holder” means any “Holder” as that term is defined under the Registration Rights
Agreement.
1.7 “EIP Registration Rights Agreement” means that certain Registration Rights Agreement dated
as of June 25, 2007, between the Company and EIP, as amended.
1.8 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
1.9 “Excluded Registration” means (a) a registration of Units in connection with the
Additional Financing so long as such registration is declared effective by the SEC no later than
February 28, 2007; (b) a registration relating to the sale of securities to employees of
the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; or (c) a
registration relating to an SEC Rule 145 transaction.
1.10 “Form S-1” means such form under the Securities Act as in effect on the date hereof or
any successor registration form under the Securities Act subsequently adopted by the SEC.
1.11 “Form S-2” means such form under the Securities Act as in effect on the date hereof or
any successor registration form under the Securities Act subsequently adopted by the SEC.
1.12 “Form S-3” means such form under the Securities Act as in effect on the date hereof or
any registration form under the Securities Act subsequently adopted by the SEC that permits
incorporation of substantial information by reference to other documents filed by the Company with
the SEC.
1.13 “GAAP” means generally accepted accounting principles in the United States.
1.14 “Hawkeye” means Hawkeye Energy Holdings, LLC, a Delaware limited liability company.
1.15 “Hawkeye Holders” means any “Holder” as that term is defined under the Hawkeye
Registration Rights Agreement.
1.16 “Hawkeye Registration Rights Agreement” means that certain Registration Rights Agreement
dated as of August 28, 2009, between the Company and Hawkeye.
1.17 “Holder” means any holder of Registrable Securities who is a party to this Agreement,
including permitted transferees that agree in writing to be bound by and subject to the terms and
conditions of this Agreement.
1.18 “Initiating Holders” means, collectively, Holders who properly initiate a registration
request under this Agreement.
1.19 “IPO” means the Company’s first underwritten public offering of its Units or other equity
securities under the Securities Act.
1.20 “Operating Agreement” means that certain Third Amended and Restated Operating Agreement
of the Company dated as of February 1, 2006, as amended from time to time.
1.21 “Person” means any individual, corporation, partnership, trust, limited liability
company, association or other entity.
1.22 “Registrable Securities” means (a) the Units issued to SDWG, and any Units acquired by
SDWG after the date hereof; and (b) any Units issued as (or issuable upon the conversion or
exercise of any warrant, right, or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the Units referenced in
clause (a) above, excluding in all cases, however, any Registrable Securities sold by a Person in a
transaction in which the applicable rights under this Agreement are not assigned pursuant to
Section 3.1, and excluding for purposes of Section 2 any Units for which
registration rights have terminated pursuant to Section 2.12 of this Agreement.
1.23 “Restricted Securities” means the securities of the Company required to bear the legend
set forth in Section 2.11(b) hereof.
1.24 “SEC” means the Securities and Exchange Commission.
1.25 “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.
1.26 “SEC Rule 144(k)” means Rule 144(k) promulgated by the SEC under the Securities Act.
1.27 “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.
1.28 “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
1.29 “Selling Expenses” means all underwriting discounts, selling commissions, and stock
transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of
counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne
and paid by the Company as provided in Section 2.6.
1.30 “Units” means units of membership interests in the Company, or shares or other equity
interests of the Company issued in exchange for or otherwise in connection with any transaction as
described in Section 2.1.
EXHIBIT B
AMENDED AND RESTATED SECTION 2.3(a)
2.3 Underwriting Requirements.
(a) If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to Section 2.1, and the Company shall include such
information in the Demand Notice. The underwriter(s) will be selected by the Company and shall be
reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the
right of any Holder to include such Holder’s Registrable Securities in such registration 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 securities through such underwriting shall (together with the Company
as provided in Section 2.4(e)) enter into an underwriting agreement in customary form with the
underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Section
2.3, if the underwriter(s) advise(s) the Initiating Holders in writing that marketing factors
require a limitation on the number of equity securities to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten
pursuant hereto, and the number of equity securities that may be included in the underwriting shall
be allocated as follows: (1) as between Holders, the Hawkeye Holders and the EIP Holders, in
proportion (as nearly as practicable) to the number of equity securities that each group requested
to be included in the underwriting, and then (2) as between the persons that comprise the Holders,
the Hawkeye Holders, and the EIP Holders in proportion (as nearly as practicable) to the number of
equity securities owned by each such holder or in such other proportion as shall mutually be agreed
to by all such holders; provided, however, the number of Registrable Securities held by the Holders
to be included in such underwriting shall not be reduced unless all other securities, except the
equity securities requested to be included in the underwriting by the Hawkeye Holders and the EIP
Holders which shall be reduced as contemplated in the prior sentence, are first entirely excluded
from the underwriting.
EXHIBIT C
AMENDED AND RESTATED SECTION 2.7
2.7 Indemnification. If any Registrable Securities are included in a registration
statement under this Section 2:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each selling
Holder, and the partners, members, officers, directors, employees, agents and stockholders of each
such Holder; legal counsel, accountants and other advisors for each such Holder; any underwriter
(as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such
Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any
Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other
aforementioned Person any legal or other expenses reasonably incurred thereby in connection with
investigating or defending any claim or proceeding from which Damages may result, as such expenses
are incurred; provided, however, that the indemnity agreement contained in this Section 2.7(a)
shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is
effected without the consent of the Company, which consent shall not be unreasonably withheld, nor
shall the Company be liable for any Damages to the extent that they arise out of or are based upon
actions or omissions made in reliance upon and in strict conformity with written information
furnished by or on behalf of any such Holder, underwriter, controlling Person, or other
aforementioned Person expressly for use in such registration statement.
(b) To the extent permitted by law, each selling Holder, severally and not jointly, will
indemnify and hold harmless the Company, and each of its directors, each of its officers who has
signed the registration statement, each Person (if any), who controls the Company within the
meaning of the Securities Act, legal counsel, accountants and other advisors for the Company, any
underwriter (as defined in the Securities Act), any other Holder selling securities in such
registration statement, and any controlling Person of any such underwriter or other Holder, against
any Damages, in each case only to the extent that such Damages arise out of or are based upon
actions or omissions made in reliance upon and in strict conformity with written information
furnished by or on behalf of such selling Holder expressly for use in such registration statement;
and each such selling Holder will pay, severally and not jointly, to the Company and each other
aforementioned Person any legal or other expenses reasonably incurred thereby in connection with
investigating or defending any claim or proceeding from which such indemnifiable Damages may
result, as such expenses are incurred; provided, however, that the indemnity agreement contained in
this Section 2.7(b) shall not apply to amounts paid in settlement of any such claim or proceeding
if such settlement is effected without the consent of the Holder, which consent shall not be
unreasonably withheld; and provided further that in no event shall any indemnity under this Section
2.7(b) exceed the net proceeds from the offering received by such Holder, except in the case of
common law fraud or willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.7 of notice of the
commencement of any action (including any governmental action) for which a party may be entitled to
indemnification hereunder, such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.7, give the
indemnifying party notice of the commencement thereof. The indemnifying party shall have the right
to participate in such action and, to the extent the indemnifying party so desires, participate
jointly with any other indemnifying party to which notice has been given, and to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties that may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential conflicting interests
between such indemnified party and any other party represented by such counsel in such action. The
failure to give notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to the indemnified party
under this Section 2.7, unless such failure actually and materially prejudices the indemnifying
party’s ability to defend such action.
(d) Notwithstanding anything else herein to the contrary, the foregoing indemnity agreements
of the Company and the selling Holders are subject to the condition that, insofar as they relate to
any Damages arising from any untrue statement or alleged untrue statement of a material fact
contained in, or omission or alleged omission of a material fact from, a preliminary prospectus (or
necessary to make the statements therein not misleading) that has been corrected in the form of
prospectus included in the registration statement at the time it becomes effective, or any
amendment or supplement thereto filed with the SEC pursuant to Rule 424(b) under the Securities Act
(the “Final Prospectus”), such indemnity agreement shall not inure to the benefit of any Person if
a copy of the Final Prospectus was furnished to the indemnified party and such indemnified party
failed to deliver, at or before the confirmation of the sale of the shares registered in such
offering, a copy of the Final Prospectus to the Person asserting the loss, liability, claim, or
damage in any case in which such delivery was required by the Securities Act.
(e) To provide for just and equitable contribution to joint liability under the Securities Act
in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a
claim for indemnification pursuant to this Section 2.7 but it is judicially determined (by the
entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time
to appeal or the denial of the last right of appeal) that such indemnification may not be enforced
in such case, notwithstanding the fact that this Section 2.7 provides for indemnification in such
case, or (ii) contribution under the Securities Act may be required on the part of any party hereto
for which indemnification is provided under this Section 2.7, then, and in each such case, such
parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which
they may be subject (after contribution from others) in such proportion as is appropriate to
reflect the relative fault of each of the indemnifying party and the indemnified party in
connection with the statements, omissions, or other actions that resulted in such loss, claim,
damage, liability, or expense, as well as to reflect any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or allegedly untrue statement of a material
fact, or the omission or alleged omission of a material fact, relates to information supplied by
the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission; provided, however, that, in any such case, (x) no Holder will be required to
contribute any amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation;
and provided further that in no event shall a Holder’s liability pursuant to this Section 2.7(e),
when combined with the amounts paid or payable by such Holder pursuant to Section 2.7(b), exceed
the net proceeds from the offering received by such Holder (net of any Selling Expenses) paid by
such Holder), except in the case of willful misconduct or common law fraud by such Holder.
(f) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control; provided, however, that the provisions on indemnification and
contribution contained in the underwriting agreement shall not contain provisions which expose the
Holders to greater liability (including greater liability resulting from reduced indemnification
rights) than the terms contained herein.
(g) The obligations of the Company and Holders under this Section 2.7 shall survive the
completion of any offering of Registrable Securities in a registration under Section 2 and shall
survive the termination of this Agreement.