Exhibit 10.1

 

STOCKHOLDERS AGREEMENT

 

THIS STOCKHOLDERS AGREEMENT (the “Stockholders Agreement”), dated as of December
30, 2014, is by and among those entities holding shares of Aventine Renewable
Energy Holdings, Inc. as set forth in the signature pages hereto (each a
“Stockholder”; and collectively, “Stockholders”) and Pacific Ethanol, Inc., a
Delaware corporation (“Parent”).

 

RECITALS

 

WHEREAS, contemporaneously with the execution and delivery of this Stockholders
Agreement, Parent, AVR Merger Sub, Inc., a Delaware corporation and wholly-owned
subsidiary of Parent (the “Merger Sub”), and Aventine Renewable Energy Holdings,
Inc., a Delaware corporation (the “Company”), are entering into an Agreement and
Plan of Merger (the “Merger Agreement”), dated as of the date hereof, which
provides for the merger of Merger Sub with and into the Company, with the
Company surviving as a wholly owned subsidiary of Parent (the “Merger”);

 

WHEREAS, capitalized terms used herein and not otherwise defined shall have the
meanings assigned such terms in the Merger Agreement;

 

WHEREAS, in the aggregate, Stockholders hold of record and own beneficially the
number of shares of the Company’s capital stock set forth on Exhibit A, certain
of which shares, as noted on Exhibit A, are subject to pending sales by
Stockholders to a third party pursuant to one or more transfer agreements
entered into prior to the date hereof (collectively, the “Third Party
Transfers”);

 

WHEREAS, Stockholders wish to enter into this Stockholders Agreement solely with
respect to their respective Pro Rata Share of an aggregate 51% of the issued and
outstanding shares of capital stock of the Company (the Stockholders’ shares
described herein, collectively, the “Shares,” are set forth on Exhibit B); for
purposes of this Stockholders Agreement, “Pro Rata Share” means, as to any
Stockholder, a fraction, (i) the numerator of which is the number of shares of
the Company’s capital stock held by the Stockholder as set forth on Exhibit A,
and (ii) the denominator of which is the sum of (A) the number of shares of the
Company’s capital stock held by all Stockholders, in each case after the Third
Party Transfers, and (B) the CS Shares (as defined in Section 16 below); and

 

WHEREAS, Stockholders stand to receive a material benefit from the Merger in the
form of the consideration payable in the Merger in respect of the Shares and, as
a condition to entering into the Merger Agreement, Parent has required that
Stockholders agree, and Stockholders have agreed, to enter into this
Stockholders Agreement.

 

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NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and obligations set forth herein, and
intending to be legally bound hereby, each of the parties hereto agrees as
follows:

 

1.          Representations and Warranties of Stockholders. Each Stockholder
hereby severally, but not jointly, represents and warrants, as to itself only,
to Parent as follows:

 

(a)          Title. As of the date hereof, such Stockholder holds of record and
owns beneficially, free and clear of any Encumbrances (other than restrictions
under applicable securities Laws), all of the Shares set forth opposite its name
on Exhibit B hereto. Other than the Shares and those additional shares of
Company stock set forth on Exhibit A, such Stockholder does not, directly or
indirectly, own any shares of capital stock of the Company, any option, warrant
or other right to acquire shares of capital stock of the Company or any other
securities of the Company. Other than the agreements subject to the Third Party
Transfers, such Stockholder is not a party to any executory written or oral
agreement, contract, subcontract, lease, instrument, commitment or undertaking
of any nature (“Contract”) (other than this Stockholders Agreement) that could
require such Stockholder to sell, transfer or otherwise dispose of any capital
stock of the Company and each Subsidiary of the Company.

 

(b)          Right to Vote. Such Stockholder has full legal power, authority and
right to vote all of the Shares, in favor of the approval and authorization of
the Merger Agreement and the principal terms of the Merger without any approval,
consent, ratification, permission, waiver or authorization (including any
consents of Governmental Entities) (“Consent”) of, or any other action on the
part of, any other Person. Without limiting the generality of the foregoing,
except as otherwise provided in this Stockholders Agreement or as set forth on
Exhibit B hereto, such Stockholder has not entered into any voting agreement
with any Person with respect to any of the Shares, granted any Person any proxy
(revocable or irrevocable) or power of attorney with respect to any of the
Shares, deposited any of the Shares in a voting trust or entered into any
arrangement or agreement with any Person limiting or affecting such
Stockholder’s legal power, authority or right to vote the Shares on any matter.

 

(c)          Authority. Such Stockholder has full legal power, capacity,
authority and right to execute and deliver, and to perform its obligations
under, this Stockholders Agreement. This Stockholders Agreement has been duly
and validly authorized, executed and delivered by such Stockholder and
constitutes a valid and binding agreement of Stockholder enforceable against
Stockholder in accordance with its terms.

 

(d)          Opportunity. Such Stockholder has had the opportunity to review
this Stockholders Agreement and the Merger Agreement. Such Stockholder has had
adequate opportunity to discuss the requirements of this Stockholders Agreement
with his or her professional advisors to the extent such Stockholder has deemed
necessary. Such Stockholder understands that its representations and agreements
contained herein constitute a material inducement and condition to Parent and
Merger Sub in entering the Merger.

 

(e)          No Conflicts; Consents. The execution and delivery of this
Stockholders Agreement by such Stockholder does not and will not, and the
performance of this Stockholders Agreement by such Stockholder will not, result
in or constitute (with or without notice or lapse of time) any breach of or
default under, or result (with or without notice or lapse of time) in the
creation of any Encumbrance on any of the Shares pursuant to, any Contract to
which such Stockholder is a party or by which such Stockholder or any of the
Shares are bound or affected as of the date of this Stockholders Agreement. The
execution and delivery of this Stockholders Agreement by such Stockholder does
not and will not, and the performance of this Stockholders Agreement by such
Stockholder will not, require any Consent of any Person.

 

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(f)          Due Organization.

 

(i)          If such Stockholder is an Entity: (A) such Stockholder is duly
organized, validly existing and in good standing under the laws of the
jurisdiction under which such Stockholder is organized; (B) the execution,
delivery and performance of this Stockholders Agreement by such Stockholder has
been duly authorized by all necessary action on the part of the board of
directors of such Stockholder or other Persons performing similar functions; and
(C) the execution and delivery of this Stockholders Agreement by such
Stockholder does not and will not, and the performance of this Stockholders
Agreement by such Stockholder will not, (I) result in or constitute any breach
of or default under the partnership agreement or any of the other organizational
documents of such Stockholder, or (II) require the approval of holders of voting
or equity interests in Stockholder, other than any approval already obtained,
except in each case as will not adversely affect the ability of such Stockholder
to perform its obligations hereunder in any material respect or to consummate
the transactions contemplated hereby in a timely manner.

 

(ii)          If such Stockholder is an executor of an estate or trustee of a
trust: (A) such Stockholder is the sole executor or trustee of such estate or
trust; (B) such Stockholder has the sole power and authority to act on behalf of
and bind such estate or trust; and (C) the execution and delivery of this
Stockholders Agreement by such Stockholder does not and will not, and the
performance of this Stockholders Agreement by such Stockholder will not, (I)
result in or constitute any breach of or default under the will, trust agreement
or other document relating to such estate or trust, or (II) require the approval
of any beneficiary of such estate or trust, other than any approval already
obtained.

 

(g)          Accuracy of Representations and Warranties. All of such
Stockholder's representations and warranties contained in this Stockholders
Agreement will be accurate on the Closing as if made on and as of the Closing,
provided, however, that Exhibits A and B may be updated as of Closing to reflect
the consummation of the Third Party Transfers and/or transfers of shares or
Shares permitted pursuant to the terms of this Stockholders Agreement.

 

2.          Representations and Warranties of Parent. Parent hereby represents
and warrants to each Stockholder as follows:

 

(a)          Authority. Parent has full legal power, capacity, authority and
right to execute and deliver, and to perform its obligations under, this
Stockholders Agreement. This Stockholders Agreement has been duly and validly
authorized, executed and delivered by Parent and constitutes a valid and binding
agreement of Parent enforceable against Parent in accordance with its terms.

 

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3.          Stockholder Covenants. Until the termination of this Stockholders
Agreement in accordance with Section 8(b), each Stockholder hereby severally,
but not jointly, as to itself only, agrees as follows:

 

(a)          Restrictions on Transfer. Such Stockholder agrees that, except for
the Third Party Transfers, during the period from the Execution Date of the
Merger Agreement through the Effective Time (the “Pre-Closing Period”), such
Stockholder shall not directly or indirectly sell or otherwise transfer or
dispose of, or pledge or otherwise permit to be subject to any Encumbrance
(other than the Merger Agreement), any of the Shares, or any direct or indirect
beneficial interest therein, unless such proposed transferee agrees, pursuant to
a written agreement in form and content reasonably satisfactory to Parent, to be
bound by, and comply with, the terms and provisions of this Stockholders
Agreement in its entirety (subject to any necessary name or like changes) with
respect to such transferred Shares.

 

(b)          Agreement to Vote. Such Stockholder agrees that, following the
execution and delivery of the Merger Agreement, such Stockholder shall vote the
Shares at regular or special meetings of stockholders of the Company, including
adjournments thereof, or in any other circumstances upon which a vote, consent
or other approval (including by written consent) is sought (i) with respect to
the Merger and the Merger Agreement, in favor of any proposal to approve the
Merger Agreement and the Merger and (ii) with respect to all other proposals
submitted to the stockholders of the Company, which, directly or indirectly,
would reasonably be expected to prevent or materially delay the consummation of
the Merger or the transactions contemplated by the Merger Agreement, in such
manner as Parent may direct. Such Stockholder agrees not to withdraw any such
vote and not to take any other action that is inconsistent with such
Stockholder’s obligation to vote in favor of approval of the Merger Agreement
and the Merger or that may have the effect of delaying or interfering with the
Merger.

 

(c)          Market Stand-Off Agreement. Except as provided herein, such
Stockholder will not, without the prior written consent of Parent, directly or
indirectly offer, sell or contract or grant any option to sell, or otherwise
dispose of (including short sales, sales against the box and/or other hedging or
derivative transactions), pledge or transfer 100% of the shares of Parent Stock
acquired by such Stockholder (including any Parent Voting Common Stock into
which any Parent Non-Voting Common Stock is converted) pursuant to the terms of
the Merger Agreement in exchange for the Shares (the “Restricted Merger
Consideration Shares”) for a period commencing on the Closing Date and
continuing through (i) the 30th day thereafter, after which an aggregate of 25%
of the Restricted Merger Consideration Shares shall be released from the
foregoing restrictions, (ii) the 60th day thereafter, after which an aggregate
of 50% of the Restricted Merger Consideration Shares shall be released from the
foregoing restrictions, (iii) the 90th day thereafter, after which an aggregate
of 75% of the Restricted Merger Consideration Shares shall be released from the
foregoing restrictions, and (iv) the 120th day thereafter, after which an
aggregate of 100% of the Restricted Merger Consideration Shares shall be
released from the foregoing restrictions. The foregoing sentence shall not apply
to (A) transfers of Restricted Merger Consideration Shares to immediate family
members or trusts, partnerships, limited liability companies or other entities
for the benefit of such family members, (B) transfers of Restricted Merger
Consideration Shares to a wholly-owned subsidiary, parent, general partner,
limited partner, retired partner, member or retired member of the undersigned,
or (C) transfers of Restricted Merger Consideration Shares by such Stockholder
in non-public transactions; provided, however, that in each case, (1) such
transferee takes such Restricted Merger Consideration Shares subject to all of
the provisions of this Stockholders Agreement, and (2) no filing by any party
(transferor or transferee) under the Securities Exchange Act of 1934, as
amended, shall be required or shall be voluntarily made in connection with such
transfer of Restricted Merger Consideration Shares.

 

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(d)          No Actions. From and after the date hereof, except as otherwise
permitted by this Stockholders Agreement, such Stockholder will not commit any
act that would reasonably be expected to restrict or otherwise adversely affect
in any material respect Stockholder’s legal power, authority and right to vote
all of the Shares. Without limiting the generality of the foregoing, except as
required by this Stockholders Agreement, from and after the date hereof, such
Stockholder will not enter into any voting agreement with any Person with
respect to any of the Shares, grant any Person any proxy (revocable or
irrevocable) or power of attorney with respect to any of the Shares, deposit any
of the Shares in a voting trust or otherwise enter into any Contract with any
Person limiting or affecting such Stockholder’s legal power, capacity, authority
or right to vote the Shares in favor of the Merger Agreement and the Merger.

 

(e)          No Solicitation. Such Stockholder shall not, nor shall it authorize
or permit any officer, director, employee of such Stockholder or instruct any
investment banker, financial advisor, attorney or other advisor or
representative of such Stockholder to, directly or indirectly (i) solicit,
initiate, or encourage the submission of, any Company Takeover Proposal, (ii)
enter into any agreement with respect to or approve or recommend any Company
Takeover Proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to the Company
or any Subsidiary in connection with, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Company Takeover Proposal. For the avoidance of doubt,
a Stockholder may discuss any matters or information relating to the Company,
any Subsidiary or any actual or potential Company Takeover Proposal with any of
the partners, members, officers, directors, employees, advisors (including
investment advisers), attorneys and other agents and representatives of (x) such
Stockholder or any other Stockholder, (y) Credit Suisse AG or one or more of its
Affiliates (“CS”) or (z) the Company; provided, that the Stockholder complies
with its obligations under this Section 3(e).

 

(f)          Public Announcements. During the Pre-Closing Period, except as may
be required under applicable Law, such Stockholder shall not (and such
Stockholder shall not permit any of its representatives to) issue any press
release or make any public statement regarding this Stockholders Agreement, the
Merger Agreement or the Merger, or regarding any of the other transactions
contemplated by this Stockholders Agreement or the Merger Agreement, without
Parent's prior written consent. Unless made available to the public by any
Stockholder or its Affiliate, the foregoing shall not apply or otherwise
restrict investor communications between any Stockholder and its investors.

 

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(g)          Exercise of Drag-Along. With respect to the Shares, such
Stockholder, simultaneously with CS and each other Stockholder, hereby agrees to
exercise its drag-along rights under Article 6 of the Aventine Stockholders
Agreement in favor of the Merger Agreement and the Merger. Pursuant to such
exercise, such Stockholder shall furnish, together with CS and each other
Stockholder, a Sale Notice (as such term is defined in the Aventine Stockholders
Agreement) to all other stockholders of the Company party to the Aventine
Stockholders Agreement in accordance with the terms thereof. Furthermore, at the
reasonable request of Parent, Company or any other Stockholder, such Stockholder
agrees to execute such additional instruments and other writings, and take such
other action, as Parent, Company or any other Stockholder may reasonably request
to effect or evidence the performance of Article 6 of the Aventine Stockholders
Agreement in connection with the Merger.

 

4.          Waiver of Dissenters’ Rights. Each Stockholder hereby irrevocably
and unconditionally waives, and agrees not to assert, (a) any dissenters' rights
or any similar right relating to the Merger that Stockholder may have by virtue
of, or with respect to, all of its shares of capital stock of the Company, and
(b) any right to object to the manner in which the consideration to be paid to
the Stockholders of the Company in connection with the Merger is to be
calculated or paid pursuant to the Merger Agreement, or the nature or amount of
consideration to be paid to Stockholder or any other stockholder of the Company
pursuant to the Merger Agreement.

 

5.          Parent Covenants. Until the termination of this Stockholders
Agreement in accordance with Section 8(b), Parent hereby agrees not to consent
to or permit the amendment of Section 6.13(b) of the Merger Agreement without
the prior consent of Stockholders holding at least a majority of the Shares.

 

6.          Action in Stockholder Capacity Only. No Stockholder makes an
agreement or understanding herein in such Stockholder’s capacity as a director,
officer or employee of the Company. Each Stockholder is executing this
Stockholders Agreement solely in such Stockholder’s capacity as a record holder
and beneficial owner of the Shares, and nothing herein shall limit or affect any
actions taken in such Stockholder's capacity as an officer, director or employee
of the Company.

 

7.          Additional Shares. For the avoidance of doubt, if, after the date
hereof, Stockholders acquire beneficial or record ownership of any additional
shares of capital stock of the Company (any such shares, “Additional Shares”),
including, without limitation, upon exercise of any option, warrant or right to
acquire shares of capital stock of the Company or through any stock dividend or
stock split, the provisions of this Stockholders Agreement applicable to the
Shares shall not be applicable to such Additional Shares; provided, however,
that the provisions of Section 4 of this Stockholders Agreement shall apply to
any Additional Shares.

 

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8.          Amendments; Termination.

 

(a)          This Stockholders Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.

 

(b)          This Stockholders Agreement shall terminate upon the first to occur
of (i) the Closing Date, (ii) the date of any material modification, waiver or
amendment to any provision of the Merger Agreement that reduces the amount,
changes the form or otherwise adversely affects the consideration payable to the
Stockholder pursuant to the Merger Agreement as in effect on the date hereof,
(iii) the valid termination of the Merger Agreement in accordance with its
terms, and (iv) the mutual written consent of all of the parties hereto. Upon
due termination of this Stockholders Agreement, no party shall have any further
obligations or liabilities under this Stockholders Agreement; provided, however,
that: (x) no party shall be relieved of any obligation or liability arising from
any prior breach by such party of any representation, warranty, covenant or
obligation of Stockholders contained in this Stockholders Agreement; and (y)
subject to Section 16, Stockholders shall, in all events, remain bound by and
continue to be subject to the provisions set forth in Sections 7 (excluding the
proviso therein), 8, 9, 11 through 15 and 17 through 19 of this Stockholders
Agreement; and (z) if this Stockholders Agreement terminates as a result of the
occurrence of the Closing Date, Stockholders shall, in all events, remain bound
by and continue to be subject to the provisions set forth in the Sections
referenced in subsection (y) above and Sections 3(c), 4 and 7 (including the
proviso therein).

 

9.          Severability. If any term or other provision of this Stockholders
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other terms, conditions and provisions of this
Stockholders Agreement shall nevertheless remain in full force and effect so
long as the economic and legal substance of the transactions contemplated hereby
are not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to modify this
Stockholders Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Stockholders Agreement may be consummated as
originally contemplated to the fullest extent possible. If the parties fail to
so agree within ten (10) Business Days of such determination that any term or
other provision is invalid, illegal or incapable of being enforced, such holding
shall not affect the validity or enforceability of any other aspect hereof (or
of such provision in another jurisdiction) and the parties agree and hereby
request that the court or arbitrator(s) make such valid modifications to (or
replacement of, if necessary) the invalid provision as are necessary and
reasonable to most closely approximate the parties' intent as evidenced hereby
as a whole.

 

10.          Execution in Counterparts; Exchanges by Facsimile or Electronic
Transmission. This Stockholders Agreement may be executed in counterparts, each
of which shall be an original, with the same effect as if the signatures hereto
and thereto were upon the same instrument. The exchange of a fully executed
Stockholders Agreement (in counterparts or otherwise) by facsimile or electronic
transmission shall be sufficient to bind the parties to the terms of this
Stockholders Agreement.

 

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11.          Specific Performance. The parties hereto agree that the failure for
any reason of a Stockholder to perform any of such Stockholder’s covenants or
obligations under this Stockholders Agreement will cause irreparable harm or
injury to Parent with respect to which money damages would not be an adequate
remedy. Accordingly, such Stockholder agrees that, in seeking to enforce this
Stockholders Agreement against such Stockholder, Parent shall be entitled to
specific performance and injunctive and other equitable relief in addition to
any other remedy available at law, in equity or otherwise.

 

12.          Governing Law; Submission to Jurisdiction.

 

(a)          This Stockholders Agreement shall be construed in accordance with,
and governed in all respects by, the internal Laws of the State of Delaware
(without giving effect to principles of conflicts of laws which would result in
the application of the Law of any other jurisdiction). Any action, suit or
proceeding relating to this Stockholders Agreement or the enforcement of any
provision of this Stockholders Agreement may be brought or otherwise commenced
in any state or federal court located in Wilmington, Delaware. Each party to
this Stockholders Agreement: (i) irrevocably and unconditionally consents and
submits to the exclusive jurisdiction and venue of the state and federal courts
located in the State of Delaware; (ii) agrees that each state and federal court
located in Wilmington, Delaware shall be deemed to be a convenient forum; (iii)
agrees not to assert (by way of motion, as a defense or otherwise), in any such
action, suit or proceeding commenced in any state or federal court located in
Wilmington, Delaware, any claim that such party is not subject personally to the
jurisdiction of such court, that such action, suit or proceeding has been
brought in an inconvenient forum, that the venue of such proceeding is improper
or that this Stockholders Agreement or the subject matter of this Stockholders
Agreement may not be enforced in or by such court; and (iv) waives such party’s
right to trial by jury.

 

(b)          EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS STOCKHOLDERS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING ANY
CONTROVERSY INVOLVING ANY REPRESENTATIVE OF PARENT UNDER THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 12(b).

 

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13.          Successors and Assigns. This Stockholders Agreement shall be
binding upon: Parent and its successors and assigns (if any); each Stockholder
and the Stockholders' heirs, executors, personal representatives, successors and
assigns (if any). This Stockholders Agreement shall inure to the benefit of
Parent and its respective successors and assigns (if any). Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party; provided, however, that
Parent may assign this Stockholders Agreement or any of the rights, interests
hereunder to an affiliate of Parent or to any financing sources.

 

14.          Entire Agreement. This Stockholders Agreement and the Merger
Agreement set forth the entire understanding of the parties hereto relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof.

 

15.          Notices. Any notice or other communication required or permitted to
be delivered to any party under this Stockholders Agreement shall be in writing
and shall be deemed properly delivered, given and received when delivered (by
hand, by registered mail, by courier or express delivery service or by
facsimile) to the address or facsimile telephone number set forth beneath the
name of such party below (or to such other address or facsimile telephone number
as such party shall have specified in a written notice given to the other
parties hereto):

 

If to Parent, to:

 

Pacific Ethanol, Inc.
400 Capitol Mall, Suite 2060
Sacramento, CA 95814
Attention: Christopher W. Wright, Esq., General Counsel
Email: cwright@pacificethanol.com
Facsimile No.: (916) 403-2785

 

with copy to:

 

Troutman Sanders LLP
5 Park Plaza, Suite 1400
Irvine, CA 92614
Attention: Larry A. Cerutti, Esq.
Email: larry.cerutti@troutmansanders.com
Facsimile No.: (949) 622-2739

 

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If to a Stockholder, to the address set forth beneath such Stockholders name on
the signature page hereto with copy to:

 

Candlewood Investment Group, LP
777 Third Avenue, Suite 19B
New York, NY 10017
Attention: David Koenig
                   Janet Miller, General Counsel/COO
Email: dkoenig@candlewoodgroup.com; compliance@candlewoodgroup.com
Facsimile No.: (212) 493-4492

 

16.          Condition to Effectiveness. This Stockholders Agreement shall not
be effective and shall be of no force or effect until (a) the Merger Agreement
is executed by all parties thereto, (b) this Agreement is executed by all
parties hereto and (c) such time as CS has executed an agreement substantially
identical to this Stockholders Agreement with respect to all shares of the
Company’s capital stock beneficially held by CS, after giving effect to the
Third Party Transfers (collectively, the “CS Shares”), pursuant to which CS
agrees to vote its Pro Rata Share of an aggregate 51% of the issued and
outstanding shares of capital stock of the Company (together with the Shares) in
favor of the Merger Agreement and the Merger.

 

17.          No Ownership Interest. Except as otherwise expressly provided
herein, nothing contained in this Stockholders Agreement shall be deemed to vest
in Parent or Merger Sub any direct or indirect ownership or incidence of
ownership of or with respect to the Shares. All rights, ownership and economic
benefits of and relating to the Shares shall remain vested in and belong to each
applicable Stockholder, and neither Parent nor Merger Sub shall have any
authority to manage, direct, restrict, regulate, govern, or administer any of
the policies or operations of the Company or exercise any power or authority to
direct such Stockholder in the voting of any of the Shares, except as otherwise
expressly provided herein.

 

18.          Stockholder Obligations Several and Not Joint. The obligations of
each Stockholder hereunder shall be several and not joint, and no Stockholder
shall be liable for any breach of the terms of this Agreement by any other
Stockholder.

 

19.          Definitions.

 

“Aventine Stockholders Agreement” means that certain Stockholders Agreement
dated as of September 24, 2012 by and among Aventine Renewable Energy Holdings,
Inc. and certain investors and stockholders party thereto.

 

“Encumbrance” means, except (i) as provided in the ordinary course with any
Stockholder’s prime broker, or (ii) pursuant to the Aventine Stockholders
Agreement, any lien, pledge, hypothecation, charge, mortgage, security interest,
encumbrance, claim, infringement, interference, option, right of first refusal,
preemptive right or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).

 

“Entity” means any corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization or entity.

 

[Remainder of Page Intentionally left Blank.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement
as of the date first above written.

 

PACIFIC ETHANOL, INC.

 

 
By: /s/ NEIL M. KOEHLER
    Name: Neil M. Koehler

    Title: Chief Executive Officer

 

 

 

 
STOCKHOLDER: Candlewood Special Situations Master Fund, Ltd.

 

 

By: /s/ DAVID KOENIG
    Name: David Koenig

                Authorized Signatory

 

 

 

 
STOCKHOLDER: CWD OC 522 Master Fund, Ltd.

 

 

By: /s/ DAVID KOENIG

    Name: David Koenig

                Authorized Signatory

 

 

 

 

STOCKHOLDER: Candlewood Financial Opportunities Master Fund, LP

 

 

By: /s/ DAVID KOENIG

    Name: David Koenig

                Authorized Signatory

 

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STOCKHOLDER: Candlewood Financial Opportunities Fund, LLC

 

 

By: /s/ DAVID KOENIG

    Name: David Koenig

                Authorized Signatory

 

 

 

 

STOCKHOLDER: Flagler Master Fund SPC Ltd., for itself and on behalf  of its
Class A Segregated Portfolio

 

 

By: /s/ DAVID KOENIG

    Name: David Koenig

                 Authorized Signatory

 

 

 

 

STOCKHOLDER: Flagler Master Fund SPC Ltd., for itself and on behalf of its Class
B Segregated Portfolio

 

 

By: /s/ DAVID KOENIG

    Name: David Koenig

                Authorized Signatory

 

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EXHIBIT A

All Company capital stock held by Stockholders

  December 30,2014 Post-Third Party
Transfers Third Party
Transfers TOTAL held by Stockholders 8,439,977 7,600,533 (839,444) Candlewood
Special Situations Master Fund, Ltd. 3,913,400 3,859,390 (54,010) CWD OC 522
Master Fund, Ltd. 3,476,269 2,902,228 (574,041) Candlewood Financial
Opportunities Master Fund, LP 253,440 246,392 (7,048) Candlewood Financial
Opportunities Fund, LLC 181,393 61,598 (119,795) Flagler Master Fund SPC Ltd. –
Class A Segregated Portfolio 431,378 432,052 674 Flagler Master Fund SPC Ltd. –
Class B Segregated Portfolio 184,097 98,873 (85,224)

 

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EXHIBIT B

All Shares held by Stockholders & Related Proxy Documents

TOTAL held by Stockholders      5,299,342   Candlewood Special Situations Master
Fund, Ltd.      2,690,894   CWD OC 522 Master Fund, Ltd.      2,023,529  
Candlewood Financial Opportunities Master Fund, LP          171,792   Candlewood
Financial Opportunities Fund, LLC            42,948   Flagler Master Fund SPC
Ltd. – Class A Segregated Portfolio          301,241   Flagler Master Fund SPC
Ltd. – Class B Segregated Portfolio            68,938         Credit Suisse     
1,946,6961         Total      7,246,038 51.0%      14,207,917  

1.Investment Management Agreement effective as of September 30, 2010 between the
Candlewood Special Situations Master Fund, Ltd. and Candlewood Investment Group,
LP

2.Investment Management Agreement effective as of August 17, 2011 by and among
Candlewood Investment Group, LP, CWD OC 522 Offshore Fund, Ltd., CWD OC 522
Master Fund, LTD., and that certain investor

3.Investment Advisory Agreement made August 1, 2013 by and between Candlewood
Financial Opportunities Master Fund, LP, Candlewood Investment Group Financial
Advisors, LLC, and Candlewood Financial Opportunities General, LLC

4.Investment Advisory Agreement made July 19, 2013 by and between Candlewood
Financial Opportunities Fund, LLC, Candlewood Investment Group Financial
Advisors, LLC, and Candlewood Financial Opportunities General, LLC

5.Amended and Restated Investment Management Agreement effective as of May 28,
2014 entered into by and among Candlewood Investment Group, LP, Flagler Offshore
Fund, Ltd., Flagler Master Fund SPC Ltd, on behalf of its Class A Segregated
Portfolio and its Class B Segregated Portfolio and that certain investment
advisor, general partner and/or managing member to investment funds or other
accounts

_______________

1 As provided by Credit Suisse Securities (USA) LLC. Stockholders do not
represent or warrant as to the accuracy of the Credit Suisse stockholder
holdings.

 

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