SHAREHOLDERS’ AGREEMENT
Exhibit 99.2
This SHAREHOLDERS’ AGREEMENT (as amended from time to time, this “Agreement”), dated
as of December 20, 2006, by and between US BioEnergy Corporation, a South Dakota corporation (the
“Company”), and each of the shareholders of the Company listed on the signature page hereto
(together with any shareholder of the Company who subsequently becomes a party to this Agreement in
accordance with the terms hereof, the “Shareholders” and each a “Shareholder”).
W I
T N E S S E T H:
WHEREAS, the parties hereto wish to enter into this Agreement to memorialize certain
agreements relating to their ownership of equity securities of the Company and their relationship
with the Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
1.1 The following terms when used in this Agreement shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof):
“Affiliate” of any Person means any other Person which directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common control with, such
Person. The term “control” (including the terms “controlling,” “controlled by” and “under common
control with”) as used with respect to any Person means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
“beneficial ownership” or “beneficially own” means ownership of securities as
determined pursuant to Rule 13d-3 under the Exchange Act.
“Board” means the Board of Directors of the Company.
“Commission” means the Securities and Exchange Commission.
“Common Stock” means the Company’s Common Stock, par value $0.01 per share.
“Demand Registration” means a Registration for use in connection with an underwritten
public offering or block trade.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Independent Director” means a member of the Board who is independent within the
meaning of the rules of the NASDAQ Global Market or, if the shares of Common Stock are not listed
on the NASDAQ Global Market, the principal securities market or exchange on which shares of the
Common Stock of the Company are then traded or listed.
“IPO” means the initial public offering of the Common Stock.
“Person” means any natural person, corporation, firm, limited liability company,
partnership, association, government, governmental agency or other entity, whether acting in an
individual, fiduciary or other capacity.
“Prospectus” means the prospectus included in any registration statement, as amended
or supplemented by any prospectus supplement with respect of the terms of the offering of any
security of the Company covered by such registration statement and all other amendments or
supplements to the prospectus, including post effective amendments, and all material incorporated,
or deemed to be incorporated, by reference in such prospectus.
“Registrable Securities” means any shares of Common Stock held by a Shareholder on the
effective date of the registration statement with respect to the IPO and any equity securities of
the Company issued or issuable with respect to any such Common Stock by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (a) a registration statement with respect to the sale
of such securities shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (b) they shall have been
distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities
Act, (c) they shall have been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the Securities Act or any
similar state law then in force, (d) they become eligible for resale pursuant to Rule 144(k) (or
any successor provision) under the Securities Act, or (e) they shall have ceased to be outstanding.
“Registration” means the registration under the Securities Act of Registrable
Securities.
“Restricted Period” means a one-year period following the effective date of the
registration statement with respect to the IPO.
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company represents and warrants
to the Shareholders as follows:
(a) The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of South Dakota.
(b) The Company has the full power and authority to execute, deliver and carry out the terms
and provisions of this Agreement and to consummate the transactions contemplated hereby and has
taken all necessary corporate action to authorize the execution, delivery and performance of this
Agreement.
(c) This Agreement has been duly and validly executed and delivered by the Company.
(d) The execution and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby will not conflict with, result in the breach of any
of the terms or conditions of, constitute a default under or violate, accelerate or permit the
acceleration of any other similar right of any other party under, the articles of incorporation or
by-laws of the Company, any law, rule or regulation or any agreement, lease, mortgage, note, bond,
indenture, license or other document or undertaking, to which the Company is a party or by which
the Company or its properties may be bound, nor will such execution, delivery and consummation
violate any order, writ, injunction or decree of any federal, state, local or foreign court,
administrative agency or governmental or regulatory authority or body to which the Company or any
of its properties is subject, the effect of any of which, either individually or in the aggregate,
would impair the ability of the Company to perform its obligations hereunder.
2.2 Representations and Warranties of the Shareholders. Each Shareholder, severally
and not jointly, represents and warrants to the Company as follows:
(a) Such Shareholder, if not a natural person, is a corporation, limited partnership, limited
liability company or other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its formation.
(b) Such Shareholder (i) is competent, if he is a natural person, and (ii) has the full power
and authority to execute, deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement.
(c) This Agreement has been duly and validly executed and delivered by such Shareholder.
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(d) The execution and delivery of this Agreement by such Shareholder and the consummation of
the transactions contemplated hereby by such Shareholder will not conflict with, result in the
breach of any of the terms or conditions of, constitute a default under or violate, accelerate or
permit the acceleration of any other similar right of any other party under, the organizational
documents of such Shareholder, if it is not a natural person, any law, rule or regulation or any
agreement, lease, mortgage, note, bond, indenture, license or other document or undertaking, to
which such Shareholder is party or by which such Shareholder or its properties may be bound, nor
will such execution, delivery and consummation violate any order, writ, injunction or decree of any
federal, state, local or foreign court, administrative agency or governmental or regulatory
authority or body to which the Shareholder or any of his or its properties are subject, the effect
of any of which, either individually or in the aggregate, would impair the ability of such
Shareholder to perform its obligations hereunder.
ARTICLE III
STANDSTILL AND VOTING PROVISIONS
Each Shareholder, severally and not jointly, covenants and agrees with the Company as follows:
3.1 Restrictions on Acquisition of Securities and Other Activities. Without the prior
approval of the Board, during the term of this Agreement, such Shareholder will not, directly or
indirectly, acquire, offer or propose to acquire or agree to acquire, whether by purchase, tender
or exchange offer, through the acquisition of control of another Person or otherwise, beneficial
ownership of any shares of Common Stock or any other equity securities of the Company (or any
securities convertible into or exchangeable or exercisable for such securities); provided
that
(a) such Shareholder may acquire beneficial ownership of additional shares of Common Stock in
an amount not to exceed 2% of the Common Stock outstanding on the closing of the IPO;
(b) such Shareholder may acquire beneficial ownership of additional shares of Common Stock or
any other equity securities of the Company (or any securities convertible into or exchangeable or
exercisable for such securities) (i) under an “employee benefit plan” (as defined in Rule 405
promulgated under the Securities Act) of the Company or any of its subsidiaries or (ii) pursuant
to a stock split, stock dividend, rights offering, recapitalization, reclassification or similar
transaction made available by the Company to holders of Common Stock generally;
(c) for a period commencing with the date of an increase in the number of shares of
outstanding Common Stock and ending 90 days after the filing of Form 10-K or 10-Q by the Company
that reflects such increase (excluding shares of Common Stock issued in the IPO, including any
shares of Common Stock issued pursuant to the over-allotment option), such Shareholder may acquire
beneficial ownership of shares of Common Stock in an amount not to
exceed the number of shares of Common Stock required to maintain such Shareholder’s percentage beneficial ownership of
Common Stock, as measured immediately prior to such issuance of Common Stock by the Company; and
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(d) for the period commencing with the date of the effectiveness of the Company’s registration
statement with respect to the IPO and ending 90 days thereafter, any Shareholder that beneficially
owns at least 21% of the outstanding Common Stock as of the date of this Agreement may acquire
beneficial ownership of shares of Common Stock in an amount not to exceed the number of shares of
Common Stock required to maintain such Shareholder’s percentage beneficial ownership of Common
Stock at 21% of the outstanding Common Stock.
For the avoidance of doubt, the restrictions contained in this Section 3.1 apply to direct as
well as indirect (through another Shareholder or otherwise) acquisitions of beneficial ownership,
and no acquisition of beneficial ownership by a Shareholder shall be permitted under this Section
3.1 unless such acquisition would also be permitted to be made by any other Shareholder or
Shareholders who beneficially own shares held by such first Shareholder.
3.2 Restrictions on Transfer. Without the prior approval of the Board, during the term
of this Agreement, such Shareholder shall not directly or indirectly sell, transfer, give, pledge,
encumber or otherwise dispose of, or permit to be sold, transferred, given, pledged, encumbered or
otherwise disposed of, any equity securities of the Company (or any securities convertible into or
exchangeable or exercisable for such securities) beneficially owned by it to any Person if,
following such sale, transfer, gift, pledge, encumbrance or other disposition, such Person would
beneficially own in excess of 5% of the outstanding shares of Common Stock, except:
(a) to an Affiliate of such Shareholder; provided, that such Affiliate of the
Shareholder agrees in writing to be bound by this Agreement;
(b) to equityholders of such Shareholder; provided, that such equityholders of the
Shareholder agree in writing to be bound by this Agreement; or
(c) among Shareholders but only to the extent that the acquisition of such equity securities
is permitted under Section 3.1.
3.3 Voting. During the term of this Agreement, whenever such Shareholder has the right
to vote any shares of Common Stock beneficially owned by it for the election of directors of the
Company, such Shareholder shall (a) be present, or cause to be present, in person or by proxy, at
the shareholder meeting of the Company relating to such election so that all shares beneficially
owned by it shall be counted for the purpose of determining the presence of a quorum at such
meeting and (b) vote, or cause to be voted, all shares beneficially owned by it such that at all
times a majority of the members of the Board are Independent Directors who were nominated by a
committee of the Board comprised solely of Independent Directors.
This Section 3.3 shall be deemed to be a voting agreement within the meaning of and created pursuant to section
731 of the South Dakota Business Corporation Act, SDCL § 47-14A-731.
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3.4 Related Party Transactions. During the term of this Agreement, any material
transaction between the Company or any of its subsidiaries, on the one hand, and a Shareholder or
its Affiliates, on the other hand, must be approved by a majority of the Independent Directors of
the Board (or by a committee comprised solely of Independent Directors); provided, that if
any such transaction between the Company and such Shareholder or its Affiliates requires the
approval of the shareholders of the Company under the South Dakota Business Corporation Act, in
addition to the voting requirement under the South Dakota Business Corporation Act, such
transaction must also be approved by holders of a majority of the Common Stock not beneficially
owned by the Shareholder who is (or whose Affiliate is) party to the transaction.
3.5 Other Restrictions. Except as otherwise specifically authorized in advance by the
Board, during the term of this Agreement, each Shareholder agrees that it will not, for the purpose
of proposing or acting upon a proposal regarding acquisition of control of the Company, directly or
indirectly:
(a) initiate, or in any way participate in, any “solicitation” of “proxies” to vote (as such
terms are defined in Rule 14a-1 under the Exchange Act), solicit any consent or communicate with or
seek to advise or influence any Person with respect to the voting of any equity securities of the
Company or become a “participant” in any “election contest” with respect to the Company;
(b) initiate, propose or otherwise solicit shareholders for the approval of any shareholder
proposal (as described in Rule 14a-8 under the Exchange Act or otherwise) with respect to the
Company;
(c) seek election to, nominate a candidate for, or seek the removal of any member of, the
Board;
(d) call or seek to have called any meeting of the shareholders of the Company;
(e) form, join or in any way participate in or assist in the formation of any “group” within
the meaning of Section 13(d)(3) of the Exchange Act with respect to any equity securities of the
Company; provided, that this Section 3.5 shall not prohibit any such arrangement among each
Shareholder and any of their respective Affiliates;
(f) deposit any equity securities of the Company into a voting trust or subject any equity
securities to any arrangement or agreement with respect to the voting thereof (other than this
Agreement); provided, that this Section 3.5 shall not prohibit any such arrangement among
each Shareholder and any of their respective Affiliates;
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(g) make any public statement or proposal whatsoever with respect to any business combination
transaction involving the Company, including, without limitation, a merger, exchange offer or
liquidation of the Company’s assets, or any restructuring, recapitalization or similar transaction
with respect to the Company; or
(h) propose to amend or modify, or otherwise act, alone or in concert with others, in a manner
designed or having the deliberate effect of circumventing, the foregoing restrictions;
provided that nothing in this Section 3.5 shall prohibit any individual who is serving as a
director of the Company, solely in his or her capacity as such director, from taking any action or
making any statement which, in such director’s best judgment, is in the best interests of the
Company’s shareholders.
3.6 Legend. Each Shareholder hereby acknowledges and agrees that each of the
certificates representing the shares of Common Stock held by such Shareholder shall be subject to
stop transfer instructions and shall include the following legend (in addition to any other legend
currently included or required to be included on such certificate):
THESE SHARES ARE SUBJECT TO CERTAIN LIMITATIONS ON TRANSFER SET FORTH IN A SHAREHOLDERS’ AGREEMENT,
DATED AS OF DECEMBER 20, 2006, INCLUDING, BUT NOT LIMITED TO, RESTRICTIONS ON THE SALE, GIFT,
TRANSFER, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION TO ANY PERSON THAT WOULD BENEFICIALLY OWN MORE
THAN 5% OF THE OUTSTANDING COMMON STOCK OF THE COMPANY AFTER SUCH TRANSACTION. A COPY OF SUCH
AGREEMENT IS ON FILE WITH THE SECRETARY OF THE COMPANY
ARTICLE IV
REGISTRATION RIGHTS
4.1 Demand Registrations. Subject to the terms and conditions hereof, at any time
after the expiration of the Restricted Period, if any Shareholder or Shareholders who beneficially
own in the aggregate Registrable Securities representing not less than 20% of the then outstanding
Common Stock request in writing a Demand Registration, which request specifies the number of
Registrable Securities requested to be registered, then within ten (10) days after receipt of any
such request, the Company shall give written notice of such requested Demand Registration to all
other Shareholders who are record holders of Registrable Securities and shall include in the Demand
Registration all Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 days after the date of mailing of the Company’s notice.
(a) Shareholders shall be entitled to not more than three (3) Demand Registrations, in the
aggregate. Subject to the limitations set forth
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in this Section 4.1(a) and in Section 4.1(c), no more than one Demand Registration may be requested in
any six-month period. The Company shall pay all Registration Expenses (as defined in Section 4.5)
in connection with each Demand Registration. No request for a Demand Registration shall be
permitted unless the Registrable Securities sought to be included in such Demand Registration have
an expected market value of at least $50 million. A Registration shall not count as a Demand
Registration until it has become effective, and any Registration shall not count as a Demand
Registration unless the initiating Shareholder or Shareholders and other Shareholders are able to
register and sell at least 50% of the Registrable Securities requested to be included in such
Registration.
(b) If the investment banker(s) or manager(s) of an offering pursuant to a Demand Registration
advise the Company in writing that in their opinion the number of Registrable Securities and other
securities requested to be included in such offering, exceeds the number of Registrable Securities
and other securities, if any, which can be sold in an orderly manner in such offering and/or that
the number of shares of Registrable Securities proposed to be included in such offering would
adversely affect the price per share of the Common Stock, the Company shall include in the
Registration, prior to the inclusion of any securities which are not Registrable Securities, the
number of Registrable Securities requested to be included which, in the opinion of the
underwriters, can be so sold, pro rata (or as may have otherwise been agreed among the Shareholders
of Registrable Securities to be included in such Registration) among the respective Shareholders
thereof on the basis of the amount of Registrable Securities requested to be registered by each
such Shareholder; provided that if the number of Registrable Securities to be included in the
Registration is less than 75% of the aggregate number requested to be so included, the Shareholders
of Registrable Securities covered by such Demand Registration shall be entitled to withdraw such
request, upon the affirmative vote of Shareholders holding at least 66% of such Registrable
Securities, and, if such request is withdrawn, the Demand Registration shall not count as a
permitted Demand Registration hereunder, and the Company shall pay all Registration Expenses in
connection with the withdrawn Registration. Any Persons who participate in Demand Registrations
not at the Company’s expense must pay their share of the Registration Expenses as provided in
Section 4.5.
(c) The Company shall not be obligated to effect any Demand Registration within six months
after the effective date of a Registration in which the Shareholders were given Piggyback
Registration (as defined in Section 4.2) rights pursuant to Section 4.2. The Company may, not more
than twice in any 12-month period, postpone for up to 90 days the filing or the effectiveness of a
registration statement for a Demand Registration if the Board determines in good faith that (i)
such postponement is necessary in order to avoid premature disclosure of a matter the Board has
determined would not be in the best interest of the Company to be disclosed at such time, (ii) the
Demand Registration would materially and adversely impact the Company or (iii) the Demand
Registration would adversely affect the price per share of the Common Stock; provided, that
in such event, the Shareholders of Registrable Securities covered by the Demand Registration shall
be entitled, upon the affirmative vote of holders holding at least 66% of such Registrable
Securities, to withdraw such request and, if such request is withdrawn, the
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Demand Registration
shall not count as a permitted Demand Registration hereunder, and the Company shall pay all Registration Expenses in
connection with the withdrawn Registration; provided further, that upon the
election of the Company and upon notice to the Shareholders of Registrable Securities to be
included in such Registration, one such postponement may be extended to not more than 120 days at
the sole discretion of the Company. In addition, if any request for a Demand Registration is
delivered at a time when the Company is planning to file a registration statement with respect to
an underwritten primary offering of Common Stock, the Company may require the Shareholders to
postpone a request for Demand Registration until the expiration of the 180-day period following the
effective date of such registration.
(d) In connection with a Demand Registration, the Company shall select the investment
banker(s) and manager(s) to administer the offering.
4.2 Piggyback Registrations. Subject to the terms and conditions hereof, at any time
after the Restricted Period whenever the Company proposes to register (including for this purpose a
Registration effected by the Company for shareholders other than Shareholders) any of its
securities under the Securities Act (other than (i) a Registration under Section 4.1 hereof, (ii) a
Registration of securities solely relating to an offering and sale pursuant to any employee stock
plan or other employee benefit plan arrangement, including any registration on Form S-8 (or any
successor form thereto), or (iii) a Registration of securities issued in an acquisition or business
combination including any Registration on Form S-4 (or any successor form thereto) (a
“Piggyback Registration”), the Company shall give at least 20 days’ written notice of the
Company’s intention to effect such a Registration to all Shareholders of record of Registrable
Securities and shall include in the Registration, subject to any agreement among the Shareholders
to be included in such Registration, all Registrable Securities with respect to which the Company
has received written requests for inclusion therein within 10 days after the receipt of the
Company’s notice.
(a) The Registration Expenses of the Shareholders shall be paid by the Company in all
Piggyback Registrations.
(b) If a Piggyback Registration is a primary Registration on behalf of the Company and the
investment banker(s) or manager(s) of such offering advise the Company in writing that in their
opinion the number of securities requested to be included in such Registration exceeds the number
which can be sold in an orderly manner in such offering and/or that the number of securities
proposed to be included in such offering would adversely affect the price per share of the Common
Stock, the Company shall include in the Registration (i) first, the securities the Company proposes
to sell, and (ii) second, the Registrable Securities requested to be included in the Registration
pro rata among the Shareholders on the basis of the number of shares proposed to be registered by
each or as such Shareholders may otherwise agree, and (iii) third, other securities requested to be
included in the Registration pro rata among the holders of such other securities on the basis of
the number of shares requested to be registered by each such holder or as such holders may
otherwise agree.
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(c) If a Piggyback Registration is a secondary Registration on behalf of holders of the
Company’s securities other than Registrable Securities and the investment banker(s) or manager(s)
of such offering advise the Company in writing that, in their opinion, the number of securities
requested to be included in the Registration exceeds the number which can be sold in an orderly
manner in such offering and/or that the number of securities proposed to be included in such
offering would adversely affect the price per share of the Common Stock, the Company shall include
in the Registration (i) first, the securities requested to be included therein by the holders
requesting such Registration pro rata among the holders of such other securities on the basis of
the number of shares requested to be registered by each such holder or as such holders may
otherwise agree, (ii) second, the Registrable Securities requested to be included in such
Registration pro rata among the Shareholders on the basis of the number of shares proposed to be
registered by each or as such Shareholders may otherwise agree, and (iii) third, other securities
requested to be included in the Registration pro rata among the holders of such other securities on
the basis of the number of shares requested to be registered by each such holder or as such holders
may otherwise agree.
(d) In connection with a Piggyback Registration, the Company shall select the investment
banker(s) and manager(s) to administer the offering, if applicable.
4.3 Lock-up Agreement. Each Shareholder agrees not to effect any sale, distribution or
other transfer (including sales pursuant to Rule 144) of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities, during a period of
up to 180 days (as may be requested by the Company or the managing underwriters) following any
underwritten, registered public offering of Common Stock, beginning on the effective date of such
underwritten, registered offering (except for sales of such securities as part of such
underwritten, registered offering) whether or not the Shareholder sold shares in such offering,
unless the managing underwriters otherwise agree; provided, that all directors and
executive officers of the Company likewise agree not to effect any sale, distribution or other
transfer (including sales pursuant to Rule 144) of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities, during the same
period.
4.4 Registration Procedures. Whenever the Shareholders have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company shall use its best
efforts to effect the Registration and the sale of such Registrable Securities in accordance with
the intended method of disposition thereof, and pursuant thereto the Company shall as expeditiously
as possible:
(a) Prepare and, in the case of a Demand Registration, no later than 60 days after a request
for a Demand Registration, file with the Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause the registration statement to become
effective and remain effective until the earlier of (i) the date when all Registrable Securities
covered by the registration statement have been sold or (ii) 120 days from the effective date of
the registration statement;
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provided, that before filing a registration statement or Prospectus or any amendments
or supplements thereto, furnish to the Shareholders of Registrable Securities covered by such
registration statement and the underwriter or underwriters, if any, copies of all such documents
proposed to be filed, including documents incorporated by reference in the Prospectus and, if
requested by such Shareholders, the exhibits incorporated by reference, and such Shareholders shall
have the opportunity to object to any information pertaining to such Shareholders that is contained
therein and the Company will make the corrections reasonably requested by such Shareholders with
respect to such information prior to filing any registration statement or amendment thereto or any
Prospectus or any supplement thereto; provided further, that the period for the
preparation and filing of a Demand Registration shall be 120 days if a request for a Demand
Registration is made in the first 45 days of any year;
(b) Prepare and file with the Commission such amendments and supplements to the registration
statement and the Prospectus used in connection therewith as may be necessary to keep the
registration statement effective for the period referred to in Section 4.4(a) and comply with the
provisions of the Securities Act with respect to the disposition of all securities covered by the
registration statement during such period in accordance with the intended methods of disposition by
the sellers thereof as set forth in the registration statement;
(c) Furnish to each seller of Registrable Securities such number of copies of the registration
statement, each amendment and supplement thereto, the Prospectus included in the registration
statement (including each preliminary prospectus) and such other documents as such Shareholder may
reasonably request in order to facilitate the disposition of the Registrable Securities owned by
such Shareholder;
(d) Use commercially reasonable efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdictions as any Shareholder thereof
reasonably requests and do any and all other acts and things which may be reasonably necessary or
advisable to enable such Shareholder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Shareholder; provided, that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it would not otherwise
be required to qualify but for this subparagraph (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such jurisdiction;
(e) Notify each such Shareholder, at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a result of which the
Prospectus included in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and, at the request of
any such Shareholder, the Company shall prepare a supplement or amendment to the Prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus
shall not contain an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading;
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(f) Promptly notify each seller of Registrable Securities and the underwriter or underwriters,
if any: (i) when the registration statement, any pre-effective amendment, the Prospectus or any
Prospectus supplement or post-effective amendment to the registration statement has been filed and,
with respect to the registration statement or any post-effective amendment, when the same has
become effective, (ii) of any written request by the Commission for amendments or supplements to
the registration statement or Prospectus, (iii) of the notification to the Company by the
Commission of its initiation of any proceeding with respect to the issuance by the Commission of
any stop order suspending the effectiveness of the registration statement, (iv) of the receipt by
the Company of any notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable securities or blue sky laws of any
jurisdiction and (v) of any other material written communication from the Commission relating to
the registration statement or the Prospectus.
(g) Cause all such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed;
(h) Make available, for inspection by any seller of Registrable Securities and any attorney,
accountant or other agent retained by any such seller all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s officers, directors,
employees and independent accountants to supply all information reasonably requested by any such
seller, attorney, accountant or agent in connection with such registration statement;
(i) Make available to its security holders, as soon as reasonably practicable, an earning
statement covering the period of at least twelve months beginning with the first day of the
Company’s first full calendar quarter after the effective date of the registration statement, which
earning statement shall satisfy the provisions of Section 1l(a) of the Securities Act and Rule 158
thereunder;
(j) In connection with an underwritten offering, cause to be delivered to each underwriter
immediately prior to the effectiveness of the registration statement and at the time of delivery of
any Registrable Securities sold pursuant thereto, letters from the Company’s independent certified
public accountants addressed to each underwriter in customary form and covering such financial and
accounting matters as are customarily covered by letters of the independent certified public
accountants delivered in connection with primary or secondary underwritten public offerings, as the
case may be; and
(k) In connection with an underwritten offering, (i) make such representations and warranties
to the underwriters with respect to the Registrable Securities and the registration statement as
are customarily made by issuers to underwriters in primary or secondary underwritten offerings,
(ii) obtain opinions of counsel to the Company and updates thereof addressed to the underwriters
covering the matters customarily covered in opinions requested in primary or secondary underwritten
offerings and (iii) make available, on a reasonable basis, senior management personnel of the
Company to participate in, and cause them to cooperate with the
selling Shareholders or the managing underwriter in any underwritten offering in connection with a “road show” and
other customary marketing activities, including “one-on-one” meetings with prospective purchasers
of the Registrable Securities to be sold in the underwritten offering.
12
4.5 Registration Expenses. All expenses incident to the Company’s performance of or
compliance with this Agreement, including without limitation, all Registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and
delivery expenses, and fees and disbursements of counsel for the Company and all independent
certified public accountants, underwriters (excluding discounts and commissions and transfer taxes,
if any, attributable to the sale of Registrable Securities) and other Persons retained by the
Company (all such expenses being herein called “Registration Expenses”), shall be borne by
the Company, and the Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or accounting duties), the
expense of any annual audit or quarterly review, the expense of any liability insurance and the
expenses and fees for listing the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed.
(a) In connection with each Registration, the Company shall reimburse the Shareholders covered
by such Registration for the reasonable fees and expenses of one legal counsel chosen by the
Shareholders of a majority of the Registrable Securities covered by such Registration.
(b) To the extent registration expenses are not required to be paid by the Company, each
Shareholder of securities included in any Registration hereunder shall pay those registration
expenses allocable to the registration of such Shareholder’s securities so included, and any
registration expenses not so allocable shall be borne by all sellers of securities included in the
Registration in proportion to the aggregate selling price of the securities to be so registered.
4.6 Indemnification. The Company shall indemnify, to the fullest extent permitted by
law, each Shareholder, its officers, directors and Affiliates and each Person who controls such
Shareholder (within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of
material fact contained in any registration statement, Prospectus or preliminary Prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading or any
violation or alleged violation by the Company of the Securities Act, the Exchange Act or applicable
blue sky laws, except insofar as the same are made in reliance and in conformity with information
relating to such Shareholder furnished in writing to the Company by such Shareholder expressly for
use therein or caused by such Shareholder’s failure to deliver to such Shareholder’s immediate
purchaser a copy of the registration statement or Prospectus or any amendments or supplements
thereto (if the same was required by applicable law to be so delivered) after the Company has
furnished such Shareholder with a sufficient number of copies of the same. In connection with an
underwritten offering, the Company shall indemnify such underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Shareholders.
13
(a) In connection with any registration statement in which a Shareholder is participating,
each such Shareholder shall furnish to the Company in writing such information and affidavits as
the Company reasonably requests for use in connection with any such registration statement or
Prospectus and shall indemnify, to the fullest extent permitted by law, the Company, its officers,
directors and Affiliates, and each Person who controls the Company (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses arising out of or
based upon any untrue or alleged untrue statement of material fact contained in the registration
statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or
any omission or alleged omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent that the same are made in
reliance and in conformity with information relating to such Shareholder furnished in writing to
the Company by such Shareholder expressly for use therein or caused by such Shareholder’s failure
to deliver to such Shareholder’s immediate purchaser a copy of the registration statement or
Prospectus or any amendments or supplements thereto (if the same was required by applicable law to
be so delivered) after the Company has furnished such Shareholder with a sufficient number of
copies of the same; provided, however, that the obligation to indemnify shall be several, not joint
and several, among such Shareholders and the liability of each such Shareholder shall be in
proportion to and limited to the net amount received by such Shareholder from the sale of
Registrable Securities pursuant to such registration statement.
(b) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless
in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a
claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party there may be one or more legal or equitable defenses available to
such indemnified party which are in addition to or may conflict with those available to another
indemnified party with respect to such claim. Failure to give prompt written notice shall not
release the indemnifying party from its obligations hereunder.
(c) The indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified party or any
officer, director or controlling Person of such indemnified party and shall survive the transfer of
securities.
14
(d) If the indemnification provided for in or pursuant to this Section 4.6 is due in
accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in
respect of any losses, claims, damages, liabilities or expenses referred to herein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to
the amount paid or payable by such indemnified Person as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in connection with the
statements or omissions which result in such losses, claims, damages, liabilities or expenses as
well as any other relevant equitable considerations. The relative fault of the indemnifying party
on the one hand and of the indemnified Person on the other 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
indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission. In no
event shall the liability of any selling Shareholder be greater in amount than the amount of net
proceeds received by such Shareholder upon such sale or the amount for which such indemnifying
party would have been obligated to pay by way of indemnification if the indemnification provided
for under this Section 4.6 had been available under the circumstances.
4.7 Participation in Underwritten Registrations. No Person may participate in any
Registration hereunder which is underwritten or a block trade unless such Person (a) agrees to sell
such Person’s securities on the basis provided in any arrangements approved by the Company and (b)
completes and executes all customary questionnaires, powers of attorney, indemnities, underwriting
agreements and other customary documents required under the terms of such arrangements.
4.8 Transfer of Registration Rights. Subject to the transfer restrictions set forth in
Section 3.2 and provided that the Company is given prompt written notice thereof, the rights of a
Shareholder under this Article IV may be transferred in whole or in part at any time to any
transferee of Registrable Securities representing 5% or more of the outstanding Common Stock
provided (a) such transferee agrees in writing to be bound by the terms and conditions of this
Article IV and Article V (any such transferee to be a “Shareholder” for purposes of this Article IV
and Article V upon execution and delivery of such written agreement) and (b) such transfer of
securities is in accordance with all applicable state and federal securities laws and regulations.
The Company shall be responsible for the Registration Expenses of any transferee or assignee
pursuant to this Section 4.8 to the same extent as the original transferor.
4.9 Information. Each Shareholder shall report to the Company sales made pursuant to
any Registration of such Registrable Securities.
15
ARTICLE V
MISCELLANEOUS
5.1 Termination. Notwithstanding any other provision of this Agreement, this Agreement
shall terminate with respect to a Shareholder on the date that such Shareholder and its Affiliates
beneficially own less than 5% of the outstanding Common Stock of the Company; provided that
the indemnification and contribution provisions set forth in Section 4.6 shall survive any
termination of this Agreement.
5.2 Notices. Any notice required or permitted to be given pursuant to this Agreement
shall be in writing signed by the party giving such notice and shall, to the extent reasonably
practicable, be sent by telecopy (with confirmation of receipt), and if not reasonably practicable
to send by telecopy, then by hand delivery, overnight courier or certified mail (return receipt
requested), to the other parties at the addresses set forth below:
If to the Company:
US BioEnergy Corporation
0000 Xxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile: 000-000-0000
0000 Xxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile: 000-000-0000
If to a Shareholder, to the address set forth on the signature page hereto (or any document
evidencing the joinder of such Shareholder to this Agreement).
Each party may change the place to which notice shall be sent or delivered or specify one
additional address to which copies of notices may be sent, in either case by similar notice sent or
delivered in like manner to the other parties. Without limiting any other means by which a party
may be able to prove that a notice has been received by the other party, a notice shall be deemed
to be duly received: (a) if sent by hand or overnight courier, the date when duly delivered at the
address of the recipient; (b) if sent by certified mail, the date of the return receipt; or (c) if
sent by telecopy, upon receipt by the sender of an acknowledgment or transmission report generated
by the machine from which the telecopy was sent indicating that the telecopy was sent in its
entirety to the recipient’s telecopy number.
5.3 Captions. Titles or captions of Sections or Articles contained in this Agreement
are inserted only as a matter of convenience and for reference, and in no way define, limit, extend
or describe the scope of this Agreement or the intent of any provision hereof.
5.4 Amendment. The provisions of this Agreement, including the provisions of this
sentence, may not be amended or modified in a manner adverse to the rights, interests or
obligations of the Shareholders hereunder without the written consent of Shareholders who
beneficially own a majority of the Registrable Securities; provided, that without a
Shareholder’s written consent no such amendment or modification shall affect adversely such
Shareholder’s rights, interests or obligations hereunder in a discriminatory manner inconsistent
with its adverse effects on other Shareholders (other than as reflected by the different number of shares held by such Shareholder);
provided, further, that the written consent of the Company shall be required for
any amendment or modification of this Agreement.
16
5.5 Waiver. Any waiver of any term or condition must be in writing and shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or as a waiver of any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a waiver of any of such rights.
5.6 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one and the same
instrument.
5.7 Assignment. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns; provided that except
as otherwise specifically provided for in Section 4.8, no Shareholder may assign any of its rights
or interests hereunder without the prior written consent of the Company; provided
further that no such assignment shall relieve such Shareholder from its obligations
hereunder.
5.8 Entire Agreement. This Agreement sets forth the entire agreement and understanding
of the parties hereto in respect of the subject matter contained herein, and supersedes all prior
agreements, arrangements or understandings, whether oral or written, with respect to such subject
matter, except that the Subscription Agreement, dated as of November 17, 2005, by and between CHS
Inc. and the Company (including that certain waiver letter, dated as of July 26, 2006, related
thereto, which shall continue until such agreement terminates in accordance with its terms). To
the extent the terms of such agreement are or are deemed to be inconsistent with the terms of this
Agreement, the terms of this Agreement shall apply. Without limiting the generality of the
foregoing, this Agreement supersedes that certain Registration Rights Agreement, dated as of April
28, 2006, by and between Platte Valley Energy, LLC and the Company, which is hereby terminated as
of the date hereof.
5.9 Third Parties. Except as specifically set forth herein, nothing herein expressed
or implied is intended or shall be construed to confer upon or give to any Person other than the
parties hereto and their permitted successors or assigns, any rights or remedies under or by reason
of this Agreement.
5.10 Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law or rule in any
jurisdiction, in any respect, such invalidity shall not affect the validity, legality and
enforceability of any other provision or any other jurisdiction and, the remaining terms and
provisions of this Agreement shall not in any way be affected or impaired thereby, all of which
shall remain in full force and effect, and the affected term or provision shall be modified to the minimum extent permitted by law so as to achieve most
fully the intention of this Agreement.
17
5.11 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of South Dakota, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
5.12 Consent to Jurisdiction. Without limiting the provisions of Section 4.6, each of
the parties hereto hereby agrees that any proceeding relating to this Agreement shall be brought in
a federal or state court in South Dakota. Each of the parties further consents to personal
jurisdiction in any such action brought in any such court, consents to service of process by
registered mail made upon such party and such party’s agent and waives any objection to venue in
any such court or to any claim that any such court is an inconvenient forum.
5.13 Specific Performance. Each Shareholder recognizes and acknowledges that a breach
by such Shareholder of any covenants or agreements contained in this Agreement will cause the
Company to sustain injury for which it would not have an adequate remedy at law for money damages.
Therefore, each Shareholder agrees that in the event of any such breach, the Company shall be
entitled to the remedy of specific performance of such covenants and agreements and preliminary and
permanent injunctive and other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity, and each Shareholder further agrees to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any such injunctive or other
equitable relief.
5.14 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES (TO THE FULLEST
EXTENT PERMITTED BY LAW) ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE PARTIES HERETO ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO THIS AGREEMENT. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Signature Pages Follow]
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| US BIOENERGY CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Vice President, General Counsel and Corporate Secretary |
|||
(Signature Page to Shareholders’ Agreement)
| CHS INC. |
||||
| By: | /s/ Xxx X. Xxxxxxxx | |||
| Name: | Xxx X. Xxxxxxxx | |||
| Title: | Executive Vice President/COO | |||
| Address: | 0000 Xxxxx Xxxxx Xxxxx Xxxxx Xxxxxxx, XX 00000 |
|||
(Signature Page to Shareholders’ Agreement)
| XXXXXX “XXX” XXXXX | ||||
| /s/ Xxx Xxxxx | ||||
| Xxxxxx “Xxx” Xxxxx | ||||
| XXXXXX VALLEY ENERGY, LLC | ||||
| By: | ||||
| By: | /s/ Xxx Xxxxx | |||
| Name: Xxx Xxxxx | ||||
| Title: President | ||||
| Address: XX Xxx
000 Xxxxxxx Xxxxx, XX 00000 |
| GLOBAL ETHANOL, INC. | ||||
| By: | /s/ Xxx Xxxxx | |||
| Name: Xxx Xxxxx | ||||
| Title: President | ||||
| Address: XX Xxx
000 Xxxxxxx Xxxxx, XX 00000 |
||||
(Signature Page to Shareholders’ Agreement)
| XXXXXX X. XXXXX | ||||
| /s/ Xxxxxx X. Xxxxx | ||||
| Xxxxxx X. Xxxxx | ||||
| CAPITALINE ADVISORS, LLC | ||||
| By: | Xxxxxx X. Xxxxx, its sole member | |||
| /s/ Xxxxxx X. Xxxxx | ||
| Xxxxxx X. Xxxxx | ||
| Address: |
| CAPITALINE GENERAL PARTNER, LLC |
||||
| By: | ||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Name: Xxxx X. Xxxxx | ||||
| Title: Vice President | ||||
| Address: 000 Xxxx Xxx. | ||||
| Xxxxxxxxx, XX 00000 |
| CAPITALINE RENEWABLE ENERGY, LP |
||||
| By: | Capitaline General Partner, LLC, its general partner |
|||
| By: | ||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Name: Xxxx X. Xxxxx | ||||
| Title: Vice President | ||||
| Address: 000 Xxxx Xxx. | ||||
| Xxxxxxxxx, XX 00000 |
(Signature Page to Shareholders’ Agreement)
| CAPITALINE RENEWABLE ENERGY II, LP |
||||
| By: | Capitaline General Partner, LLC, its general partner |
|||
| By: | ||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Name: Xxxx X. Xxxxx | ||||
| Title: Vice President | ||||
| Address: 000 Xxxx Xxx. | ||||
| Xxxxxxxxx, XX 00000 |
| CAPITALINE RENEWABLE ENERGY III, LP |
||||
| By: | Capitaline General Partner, LLC, its general partner |
|||
| By: | ||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Name: Xxxx X. Xxxxx | ||||
| Title: Vice President | ||||
| Address: 000 Xxxx Xxx. | ||||
| Xxxxxxxxx, XX 00000 |
| BIRDDOG CAPITAL, LLC | ||||
| By: | Xxxxxx X. Xxxxx, its sole member | |||
| /s/ Xxxxxx X. Xxxxx | ||||
| Xxxxxx X. Xxxxx | ||||
| Address: | ||||
(Signature Page to Shareholders’ Agreement)
