Exhibit 4.4


 


REGISTRATION RIGHTS AGREEMENT


 


THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is made and entered into as of December 23, 2005, by and between Aventine
Renewable Energy Holdings, Inc., a Delaware corporation (the “Company”), and Friedman, Billings,
Ramsey & Co., Inc., a Delaware corporation (“FBR”),
for the benefit of the purchasers of the Company’s common stock, par value
$0.001 per share (the “Common Stock”),
as participants (“Participants”) in the private
placement by the Company of shares of its Common Stock (the “Private Placement”) and the direct
and indirect transferees of FBR and each of the Participants.


 


W I T N E S S E T H :


 


WHEREAS, the Company and FBR entered into that
certain Purchase/Placement Agreement dated as of December 12, 2005 (the “Placement Agreement”), in connection
with which on December 23, 2005, the Company agreed to sell or place 20,000,000
newly issued shares (plus an additional 2,000,000 shares to cover over
allotments, if any) of the Common Stock, with FBR acting as initial purchaser
of the 144A/Regulation
S Shares (as defined herein) and
placement agent with respect to the Private Placement Shares (as defined
herein);


 


WHEREAS, to induce FBR to enter into the
Placement Agreement, the Company has agreed to provide the registration rights
provided for in this Agreement for the holders of Registrable Shares (as
defined below); and


 


WHEREAS, the execution of this Agreement is a
condition to the closing of the transactions contemplated by the Placement
Agreement.


 


NOW,
THEREFORE, in consideration of the premises and the mutual
covenants of the parties hereto, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:


 


1.                                       Definitions.
As used in this Agreement, the following terms shall have the following
meanings:


 


“144A/Regulation
S Shares” means the shares of Common Stock initially sold to FBR
in the Private Placement and resold by FBR to “qualified institutional buyers” (as
such term is defined in Rule 144A) or to “non-U.S. persons” (in accordance
with Regulation S) in an “offshore transaction” (in accordance with Regulation
S).


 


“Affiliate”
means, as to any specified Person, (i) any Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the specified Person, (ii) any executive
officer, director, trustee or general partner of the specified Person and (iii) any
legal entity for which the specified Person acts as an executive officer,
director, trustee or general partner. For purposes of this definition, “control”
(including the correlative meanings of the terms “controlled by” and “under
common control with”), as used with respect to any Person, means the
possession, directly, or indirectly through one or more intermediaries, of the
power to direct or cause the direction of the management and policies of such
Person, whether by contract, through the ownership of voting securities,
partnership interests or other equity interests or otherwise.


 


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“Agreement”
is defined in the introductory paragraph of this Agreement.


 


“Business Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in New York, New York are authorized or
obligated by applicable law, regulation or executive order to close.


 


“Closing
Date” means the Closing Date as defined in the Placement
Agreement.


 


“Commission”
means the Securities and Exchange Commission.


 


“Common
Stock” is defined in the introductory paragraph of this
Agreement.


 


“Company” is
defined in the introductory paragraph of this Agreement, and includes
any successor thereto.


 


“Controlling
Person” is defined in Section 6(a).


 


“End
of Suspension Notice” is defined in Section 5(b).


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.


 


“FBR” is defined
in the introductory paragraph of this Agreement, and includes any
successor thereto.


 


“Form 10-K”
means an annual report required to be filed with the Commission pursuant
to Section 13 or Section 15(d) of the Exchange Act, as such form may be
amended from time to time, or any similar form, rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such form, provided that such form need
not include those items required by Section 404 of the Sarbanes-Oxley Act
of 2002.


 


“Form 10-Q”
means a quarterly report required to be filed with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act, as such form may be
amended from time to time, or any similar form, rule or regulation
hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such form, provided that such form need
not include those items required by Section 404 of the Sarbanes-Oxley Act
of 2002.


 


“GAAP”
is defined in Section 3(e).


 


“Holder” means each
record owner of any Registrable Shares from time to time, including FBR and its
Affiliates.


 


“Indemnified
Party” is defined in Section 6(c).


 


“Indemnifying
Party” is defined in Section 6(c).


 


“IPO
Registration Statement” is defined in Section 7.


 


“Liabilities”
is defined in Section 6(a).


 


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“Mandatory
Shelf Registration Statement” is defined in Section 2(a).


 


“NASD” means the
National Association of Securities Dealers, Inc.


 


“No
Objections Letter” is defined in Section 4(t).


 


“Notice
and Questionnaire” is defined in Section 2(a)(iii).


 


“Participants”
is defined in the introductory paragraph of this Agreement.


 


“Person” means an
individual, limited liability company, partnership, corporation, trust,
unincorporated organization, government or agency or political subdivision
thereof, or any other legal entity.


 


“Piggyback
Registration Statement” is defined in Section 2(b).


 


“Placement
Agreement” is defined in the first recital clause of this
Agreement


 


“Prior Holder” means an investor party to or other
beneficiary of the Registration Rights Agreement, dated December 12, 2005,
among the Company, Aventine Renewable Energy Holdings, LLC, the Investor
Holders and the Management Holders (each as defined therein) that has not waived
its rights under such Registration Rights Agreement and holding “Registrable
Securities” (as defined in such Registration Rights Agreement).


 


“Private
Placement”  is defined in
the introductory paragraph of this Agreement.


 


“Private
Placement Shares” means Shares initially sold by the Company
directly to “accredited investors” (within the meaning of Rule 501(a) promulgated
under the Securities Act) as Participants, with FBR acting as placement agent.


 


“Prospectus” means
the prospectus included in any Registration Statement, including any
preliminary prospectus, and all other amendments and supplements to any such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
prospectus.


 


“Purchaser
Indemnitee” is defined in Section 6(a).


 


“Registrable Shares”
means the 144A/Regulation S Shares and the Private Placement Shares,
upon original issuance thereof, and at all times subsequent thereto, including
upon the transfer thereof by the original holder or any subsequent holder and
any shares or other securities issued in respect of such Registrable Shares
because of or in connection with any stock dividend, stock distribution, stock
split, purchase in any rights offering or in connection with any exchange for
or replacement of such Registrable Shares or any combination of shares,
recapitalization, merger or consolidation, or any other equity securities
issued pursuant to any other pro rata distribution with respect to the Common
Stock, until, in the case of any such 144A/Regulation S Share or Private
Placement Share, the earliest to occur of:


 


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(i)                                     the date on which it has been sold pursuant to a
Registration Statement or sold pursuant to Rule 144;


 


(ii)                                  the date on which it is saleable, in the opinion of
counsel to the Company, without registration under the Securities Act, pursuant
to Rule 144(k);


 


(iii)                               the date on which it is saleable, without
restriction, pursuant to an available exemption from registration under the
Securities Act; or


 


(iv)                              the date on which it is sold to the Company or its
subsidiaries.


 


“Registration
Default” is defined in Section 2(d).


 


“Registration Expenses”
means any and all expenses incident to the performance of or compliance
with this Agreement, including:  (i) all
Commission, securities exchange, NASD registration, listing, inclusion and
filing fees (including those of FBR and Holders associated or affiliated with
FBR), (ii) all fees and expenses incurred in connection with compliance
with international, federal or state securities or blue sky laws (including any
registration, listing and filing fees and reasonable fees and disbursements of
counsel in connection with blue sky qualification of any of the Registrable
Shares and the preparation of a blue sky memorandum and compliance with the rules of
the NASD), (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, duplicating, printing, delivering and distributing
any Registration Statement, any Prospectus, any amendments or supplements
thereto, any underwriting agreements, securities sales agreements, certificates
and any other documents relating to the performance under and compliance with
this Agreement, (iv) all fees and expenses incurred in connection with the
listing or inclusion of any of the Registrable Shares on the New York Stock
Exchange, the American Stock Exchange or The NASDAQ Stock Market pursuant to Section 4(n),
(v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company (including the expenses of any
special audit and “cold comfort” letters required by or incident to such
performance) and the reasonable fees and disbursements of one counsel, reasonably
acceptable to the Company, for the Holders, selected by the Holders holding a
majority of the Registrable Shares, and (vi) any fees and disbursements
customarily paid by issuers in issues and sales of securities (including the
fees and expenses of any experts retained by the Company in connection with any
Registration Statement), provided,
however, that Registration Expenses shall
exclude brokers’ or underwriters’ discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of Registrable Shares by a Holder
and the fees and disbursements of any counsel to the Holders other than as
provided for in clause (v) above.


 


“Registration Statement”
means any Mandatory Registration Statement or Piggyback Registration
Statement.


 


“Regulation S”
means Regulation S (Rules 901-905) promulgated by the Commission
under the Securities Act, as such rules may be amended from time to
time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as
such regulation.


 


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“Rule 144”, “Rule 144A”, “Rule 158”, “Rule 415”, “Rule 424”,
or “Rule 429”,
respectively, means such specified rule promulgated by the
Commission pursuant to the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission as a replacement thereto having substantially the
same effect as such rule.


 


“Securities Act”
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission thereunder.


 


“Shares”
means the Shares of Common Stock being offered and sold pursuant to the terms
and conditions of the Placement Agreement.


 


“Suspension
Event” is defined in Section 5(b).


 


“Suspension
Notice” is defined in Section 5(b).


 


“Underwritten Offering”
means a sale of securities of the Company to an underwriter or
underwriters for reoffering to the public.


 


2.                                       Registration
Rights.


 


(a)                                  Mandatory
Shelf Registration. As set
forth in Section 4, the Company agrees to file with the Commission
as soon as reasonably practicable, but in no event later than March 31,
2006, (A) a shelf registration statement on Form S-1 or such other form under
the Securities Act then available to the Company providing for the resale
pursuant to Rule 415 from time to time by the Holders (including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, the “Mandatory
Shelf Registration Statement”). If the Company has an effective Mandatory Shelf Registration
Statement on Form S-1 under the Securities Act and becomes eligible to use
Form S-3 or such other short-form registration statement form under
the Securities Act, the Company shall promptly give notice of such eligibility
to the Holders covered thereby and may, or at the request of such Holders with
a majority of such Registrable Shares shall, promptly convert such Mandatory
Shelf Registration Statement on Form S-1 to a registration statement on Form S-3
or such other short-form registration statement by means of a post-effective
amendment or otherwise, unless any Holder with Registrable Shares under the
initial Mandatory Shelf Registration Statement notifies the Company within 10
Business Days of receipt of the Company notice that such conversion would
interfere with its distribution of Registrable Shares already in progress and
provides a reasonable explanation therefor, in which case the Company will
delay the conversion of the Mandatory Shelf Registration Statement for a
reasonable time after receipt of the first such notice, not to exceed 30 days
in the aggregate, for all Holders requesting such suspension (unless the
Company, at such time as the conversion from Form S-1 to Form S-3 or
such other short-form registration statement may occur, would
otherwise be required to amend the Mandatory Shelf Registration Statement and
require that Holders suspend sales under Section 4(i) or Section 5).


 


(i)                                     Effectiveness
and Scope. The Company
shall use its reasonable best efforts to cause the Mandatory Registration
Statement to be declared effective by the


 


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Commission as soon as
practicable following such filing, and to remain effective until the date on
which all Shares in respect thereof cease to be Registrable Shares. The Mandatory
Shelf Registration Statement shall provide for the resale from time to time,
and pursuant to any method or combination of methods legally available
(including an Underwritten Offering, a direct sale to purchasers, a sale
through brokers or agents, or a sale over the internet) by the Holders of any
and all Registrable Shares.


 


(ii)                                  Underwriting.
If any Holder proposes to conduct an Underwritten Offering under the Mandatory
Shelf Registration Statement, such Holder shall advise the Company and all other
Holders whose securities are included in the Mandatory Shelf Registration
Statement (if applicable), of the
managing underwriters for such proposed Underwritten Offering (which may be
FBR or an Affiliate thereof); such managing underwriters to be subject to the
approval of the Company, not to be unreasonably withheld. In such event, the
Company shall enter into an underwriting agreement in customary form with
the managing underwriters, which shall include, among other provisions,
indemnities to the effect and to the extent provided in Section 6,
and shall take all such other reasonable actions as are requested by the
managing underwriter in order to expedite or facilitate the registration and
disposition of the Registrable Shares included in such Underwritten Offering;
provided, however, that the Company shall not be required to cause appropriate
officers of the Company or its Affiliates to participate in a “road show” or
similar marketing effort being conducted by such underwriter with respect to
such Underwritten Offering more than once in any six month calendar period or
if the Holders do not reasonably anticipate gross proceeds from such
Underwritten Offering of at least $50 million. All Holders proposing to
distribute their Registrable Shares through such Underwritten Offering shall
enter into an underwriting agreement in customary form with the managing
underwriters selected for such underwriting and complete and execute any
questionnaires, powers of attorney, indemnities, securities escrow agreements and
other documents reasonably required under the terms of such underwriting, and
furnish to the Company such information in writing as the Company may reasonably
request for inclusion in the Registration Statement; provided, however, that no Holder shall
be required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements as are customary and reasonably requested by the underwriters. Notwithstanding
any other provision of this Agreement, with respect to an Underwritten Offering
in connection with the Mandatory Shelf Registration Statement, if the managing
underwriters determine in good faith that marketing factors require a
limitation on the number of shares to be included in such Underwritten
Offering, then the managing underwriters may exclude shares (including
Registrable Shares) from the Underwritten Offering, and any shares included in
the Underwritten Offering shall be allocated first, to each of the Holders requesting
inclusion of their Registrable Shares in such Underwritten Offering on a pro rata basis based on the total
number of Registrable Shares requested to be included, and second, to any Prior
Holders requesting inclusion of their shares in such Underwritten Offering.


 


(iii)                               Selling
Stockholder Questionnaires. Each Holder agrees, by its acquisition of
Shares, that if such Holder wishes to sell Registrable Shares pursuant to the
Mandatory Shelf Registration Statement and related Prospectus, it will do so only
in accordance with this Section 2(a)(iii). Each Holder wishing to
sell Registrable Shares pursuant to the Mandatory Shelf Registration Statement
and related Prospectus agrees to deliver a written notice, substantially in form and
substance of Annex A (a “Notice and Questionnaire”),
to the Company. The Company


 


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shall mail the Notice and
Questionnaire to the Holders no later than the date of initial filing of the
Mandatory Shelf Registration Statement with the Commission. No Holder shall be
entitled to be named as a selling securityholder in the Mandatory Shelf
Registration Statement as of the initial effective date of the Mandatory Shelf
Registration Statement, and no Holder may use the Prospectus forming a part thereof
for resales of Registrable Shares at any time, unless such Holder has returned
a completed and signed Notice and Questionnaire to the Company by the deadline
for response set forth therein; provided, however, Holders shall have at least
20 days from the date on which the Notice and Questionnaire is first mailed to
such Holders to return a completed and signed Notice and Questionnaire to the
Company. Notwithstanding the foregoing, (x) upon the request of any Holder that
did not return a Notice and Questionnaire on a timely basis or did not receive
a Notice and Questionnaire because it was a subsequent transferee of
Registrable Shares after the Company mailed the Notice and Questionnaire, the
Company shall distribute a Notice and Questionnaire to such Holders at the
address set forth in the request and (y) upon receipt of a properly completed
Notice and Questionnaire from such Holder, the Company shall use its reasonable
best efforts to name such Holder as a selling securityholder in the Mandatory
Shelf Registration Statement by means of a pre-effective amendment, by means of
a post-effective amendment or, if permitted by the Commission, by means of a
Prospectus supplement to the Mandatory Shelf Registration Statement; provided,
however, that the Company will have no obligation to add Holders to the Shelf
Mandatory Registration Statement as selling securityholders more frequently
than one time per every 60 calendar days.


 


(b)                                 Piggyback
Registration. If, after the
date hereof, the Company proposes to file a registration statement under the
Securities Act providing for a public offering of the Company’s equity
securities, other than the Mandatory Shelf Registration Statement or a
registration statement on Form S-8 or Form S-4 or any similar form hereafter
adopted by the Commission as a replacement therefor (including the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by reference,
if any, in such registration statement, the “Piggyback
Registration Statement”), the Company will notify each Holder of
the proposed filing if clause (i) or (ii) of the following sentence
applies, or only those affected Holders if clause (iii) of the following
sentence applies. If (i) the Piggyback Registration Statement relates to
an IPO Registration Statement, (ii) the Mandatory Shelf Registration
Statement is not then effective or (iii) Registrable Shares eligible for
inclusion on the Mandatory Shelf Registration Statement when initially declared
effective were not included in the Mandatory Shelf Registration Statement
(unless such shares have been or can be added to the Mandatory Registration
Statement at such time), then each Holder in the case of clause (i) and
(ii), and each such affected Holder in the case of clause (iii), shall be given
an opportunity to include in such Piggyback Registration Statement all or any part of
such Holder’s Registrable Shares. Each such Holder desiring to include in any
such Piggyback Registration Statement all or part of such Holder’s
Registrable Shares shall, within 10 days after receipt of the above-described
notice by the Company, so notify the Company in writing, and in such notice
shall inform the Company of the number of Registrable Shares such Holder
wishes to include in such Piggyback Registration Statement and provide, as a
condition to such inclusion, such information regarding itself, its Registrable
Shares and the intended method of disposition of such securities as is required
pursuant to Regulation S-K promulgated under the Securities Act to effect the
registration of the Registrable Shares. Any Holder’s election to include any
Registrable Shares in such Piggyback Registration Statement will not affect the
inclusion of such Registrable Shares


 


7

















 


in the Mandatory Shelf
Registration Statement until such Registrable Shares have been sold under the
Piggyback Registration Statement at which time the Company may remove such
shares from the Mandatory Shelf Registration Statement.


 


(i)                                     Right
to Terminate Piggyback Registration.
At any time, the Company may terminate or withdraw any Piggyback
Registration Statement referred to in this Section 2(b), and
without any obligation to any such Holder whether or not any Holder has elected
to include Registrable Shares in such registration. The Company may suspend
the effectiveness and use of any Piggyback Registration Statement at any time
for an unlimited amount of time whether or not any Holder has elected to
include Registrable Shares in such registration. In the event of any such
termination or withdrawal or unlimited suspension with respect to an IPO
Registration Statement, the following Registration Statement (other than the
Mandatory Shelf Registration Statement) for a public offering of securities by
the Company filed under the Securities Act shall, for purposes of this
Agreement, be an IPO Registration Statement.


 


(ii)                                  Underwriting. The Company shall advise the
Holders of the managing underwriters for any Underwritten Offering proposed
under the Piggyback Registration Statement. The right of any such Holder’s
Registrable Shares to be included in any Piggyback Registration Statement
pursuant to this Section 2(b) shall be conditioned upon such
Holder’s participation in such Underwritten Offering and the inclusion of such
Holder’s Registrable Shares in the Underwritten Offering to the extent provided
herein. All Holders proposing to distribute their Registrable Shares through
such Underwritten Offering shall enter into an underwriting agreement in
customary form with the managing underwriters selected for such
underwriting and complete and execute any questionnaires, powers of attorney,
indemnities, securities escrow agreements and other documents reasonably
required under the terms of such underwriting, and furnish to the Company such
information in writing as the Company may reasonably request for inclusion
in the Registration Statement; provided,
however, that no Holder shall be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements as are customary and reasonably
requested by the underwriters. Notwithstanding any other provision of this
Agreement, if the managing underwriters determine in good faith that marketing
factors require a limitation on the number of shares to be included, then the
managing underwriters may exclude shares (including Registrable Shares)
from the Piggyback Registration Statement and the Underwritten Offering, and
any Shares included in the Piggyback Registration Statement and the
Underwritten Offering shall be allocated, first, to the Company, and second, to
any Person exercising demand registration rights that are the basis for such
registration, and third, to each of the Holders and, if not pursuant to the
Prior Holders’ demand registration rights, the Prior Holder(s) requesting
inclusion of their Registrable Securities in such Piggyback Registration
Statement on a pro rata basis based on the total number of
such shares requested to be included, provided, however, that the number of
Registrable Shares to be included in the Piggyback Registration Statement shall
not be reduced unless all other securities of the Company held by other holders
of the Company’s capital stock with registration rights that are inferior (with
respect to such reduction) to the registration rights of the Holders set forth
herein, are first entirely excluded from the underwriting and registration. If
any Holder disapproves of the terms of any Underwritten Offering, such Holder may elect
to withdraw therefrom by written notice to the Company and the underwriter,
delivered at least 10 Business Days before the effective date of the Piggyback
Registration Statement. Any Registrable Shares excluded or withdrawn from


 


8

















 


such Underwritten
Offering shall be excluded and withdrawn from the Piggyback Registration
Statement.


 


(iii)                               Hold-Back
Agreement. By electing to
include Registrable Shares in the Piggyback Registration Statement, if any, the
Holder shall be deemed to have agreed not to effect any sale or distribution of
securities of the Company of the same or similar class or classes of the
securities included in the Registration Statement or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144 under the Securities Act, during such periods as
reasonably requested (but in no event longer than 30 days before and 60 days
following the effective date of the Piggyback Registration Statement, provided
the Prior Holders and each of the executive officers and directors of the
Company that hold shares of Common Stock of the Company or securities
convertible into or exchangeable or exercisable for shares of Common Stock of
the Company are subject to the same restriction for the entire time period
required of the Holders hereunder) by the representatives of the underwriters,
if an Underwritten Offering.


 


(iv)                              Mandatory
Shelf Registration not Impacted by Piggyback Registration Statement. The Company’s obligation to file
any Mandatory Shelf Registration Statement shall not be affected by the filing
or effectiveness of the Piggyback Registration Statement.


 


(c)                                  Expenses. The
Company shall pay all Registration Expenses (including those of FBR and Holders
affiliated or associated with FBR) in connection with the registration of the
Registrable Shares pursuant to this Agreement. Each Holder participating in a
registration pursuant to this Section 2 shall bear such Holder’s
proportionate share (based on the total number of Registrable Shares sold in
such registration) of all discounts and commissions payable to underwriters or
brokers and all transfer taxes in connection with a registration of Registrable
Shares pursuant to this Agreement and any other expense of the Holders not
specifically allocated to the Company pursuant to this Agreement relating to
the sale or disposition of such Holder’s Registrable Shares pursuant to any
Registration Statement.


 


(d)                                 Executive
Bonus. If (i) the Company does not file the Mandatory Shelf
Registration Statement by March 31, 2006, other than as a result of the
Commission being unable to accept such filings or (ii) the Mandatory Shelf
Registration Statement is not declared effective by the SEC within 210 days
after the date hereof (each a “Registration Default”),
then Ronald H. Miller, the President and Chief Executive Officer of the
Company, and Ajay Sabherwal, the Chief
Financial Officer of the Company, shall forfeit $5,000 of the $250,000
aggregate cash bonus to which they are entitled as a result of the filing and
effectiveness of the Mandatary Shelf Registration Statement within the time
periods contemplated by clause (i) and (ii) for each Business Day a
Registration Default continues.


 


3.                                       Rule 144
and Rule 144A Reporting; Reports to Holders.


 


(a)                                  With
a view to making available the benefits of certain rules and regulations
of the Commission that may permit the sale of the Registrable Shares to
the public without registration, the Company agrees to, so long as any Holder
owns any Registrable Shares:


 


9

















 


(i)                                     make
and keep adequate current public information available, as those terms are
understood and defined in Rule 144(c) at all times after the
effective date of the first registration statement filed by the Company
relating to an offering of the Company’s securities to the general public;


 


(ii)                                  use
its reasonable best efforts to file with the Commission in a timely manner all
reports and other documents required to be filed by the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements);


 


(iii)                               furnish
to any Holder promptly upon request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 (at any time
after 60 days after the effective date the first registration statement filed
by the Company for an offering of its securities to the general public) and of
the Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents of the Company, and take such
further actions consistent with this Section 3, as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission
allowing a Holder to sell any such Registrable Shares without registration; and


 


(iv)                              so
long as a Holder owns any Registrable Shares constituting 144A/Regulation S
Shares, if the Company is not required to file reports and other documents
under the Securities Act and the Exchange Act, it will make available other
information as required by, and so long as necessary to permit sales of
Registrable Shares pursuant to, Rule 144 or Rule 144A.


 


(b)                                 So
long as a Holder owns any Registrable Shares, notwithstanding that the Company may not
be required to file interim reports under the Securities Act, or the Exchange
Act or otherwise report on an annual and quarterly basis on forms provided for
such annual and quarterly reporting pursuant to rules and regulations
promulgated by the Commission, the Company shall furnish to the Holders all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-K and 10-Q if the Company
were required to file such forms, including a “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and, with respect to
the annual information only, audit reports thereon by the certified independent
accountants of the Company. Such annual reports shall be furnished by March 31
of the next year and such quarterly reports shall be furnished within 45 days
after the end of such quarter; and


 


(c)                                  Until
the Common Stock is listed on the New York Stock Exchange or the American Stock
Exchange or approved for quotation on The NASDAQ Stock Market, within 60 days
of the end of each fiscal quarter (or, with respect to the quarter ending on
the Company’s fiscal year end, 110 days of the end of such fiscal quarter), the
Company shall hold a quarterly conference call of a type customarily held by
companies subject to the reporting requirements of the Exchange Act for the Holders
to discuss the results of the prior quarter reported pursuant to Section 3(b) and
other relevant matters; provided, however, that if the Company’s
Board of Directors determines in good faith upon the advice of legal counsel
that such a call would be inadvisable due to the provisions of the Securities
Act or Exchange Act as a result of any proposed financing, acquisition, merger
or other significant transaction involving the Company,


 


10

















 


the Company may suspend
or delay such calls so long as and to the extent that it discontinues all
similar calls with investors in or persons or entities that do business with
the Company; provided further that the Company shall not suspend such
calls for more than 150 days out of any 365-day period.


 


4.                                       Registration
Procedures.


 


In connection with the
obligations of the Company with respect to any registration pursuant to this
Agreement, the Company shall:


 


(a)                                  notify
FBR, in writing, at least 10 Business Days prior to the initial filing of a
Registration Statement, of its intention to file a Registration Statement with
the Commission and, at least five Business Days prior to filing, provide a
draft of the Registration Statement to FBR; prepare and file with the Commission,
as specified in this Agreement, each Registration Statement, which Registration
Statement at the time it is declared effective shall comply as to form in
all material respects with the requirements of the applicable form and
include all financial statements required by the Commission to be filed
therewith and shall be reasonably acceptable to FBR; notify FBR at least five
Business Days prior to filing of any amendment or supplement to such
Registration Statement and, at least three Business Days prior to filing,
provide a draft of such amendment or supplement to FBR for review and comment;
promptly following receipt from the Commission, provide to FBR copies of any
comments made by the staff of the Commission relating to such Registration
Statement and the Company’s responses thereto for review and comment; and, in
the case of the Mandatory Shelf Registration Statement, use its reasonable best
efforts to cause such Mandatory Shelf Registration Statement to become
effective as soon as practicable after filing and to remain effective as set
forth in Section 2(a)(i);


 


(b)                                 subject
to Section 4(i), (i) prepare and file with the Commission such
amendments and post-effective amendments to each such Registration Statement as
may be necessary to keep such Registration Statement effective for the
period described in Section 2(a)(i), (ii) cause each
Prospectus contained therein to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 or any
similar rule that may be adopted under the Securities Act, (iii) promptly
and in any event within 10 calendar days after the filing thereof amend or
supplement each such Registration Statement to include the Company’s quarterly
and annual financial information and other material developments (until the
Company is eligible to incorporate such information by reference into the
Registration Statement), during which time sales of the Registrable Securities
under the Registration Statement will be suspended until such amendment or supplement
is filed and effective, and (iv) comply in all material respects with the
provisions of the Securities Act with respect to the disposition of all
securities covered by each Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the
selling Holders thereof;


 


(c)                                  furnish
to each Holder and to each underwriter in any Underwritten Offering, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
any party may reasonably request, in order to facilitate the public sale
or other disposition of the Registrable Shares; the Company hereby consents to
the use of such Prospectus, including each preliminary


 


11

















 


Prospectus, by the
Holders, if any, in connection with the offering and sale of the Registrable
Shares covered by any such Prospectus;


 


(d)                                 use
its reasonable best efforts to register or qualify, or obtain exemption from
registration or qualification for, all Registrable Shares by the time the
applicable Registration Statement is declared effective by the Commission under
all applicable state securities or “blue sky” laws of such jurisdictions as FBR
or any Holder covered by a Registration Statement shall reasonably request in
writing, keep each such registration or qualification or exemption effective
for as long as such Registration Statement is required to be kept effective
pursuant to this Agreement and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Shares owned by such
Holder; provided,
however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction or to register as a broker or
dealer in such jurisdiction where it would not otherwise be required to qualify
but for this Section 4(d), (ii) subject itself to taxation in
any such jurisdiction, or (iii) submit to the general service of process
in any such jurisdiction;


 


(e)                                  use
its reasonable best efforts to cause all Registrable Shares covered by such
Registration Statement to be registered and approved by such other governmental
agencies or authorities, if any, as may be necessary to enable the Holders
thereof to consummate the disposition of such Registrable Shares;


 


(f)                                    notify
FBR and each Holder with Registrable Shares covered by a Registration Statement
promptly and, if requested by FBR or any such Holder, confirm such advice in
writing (i) when such Registration Statement has become effective and when
any post-effective amendments and supplements thereto become effective, (ii) of
the issuance by the Commission or any state securities authority of any stop
order suspending the effectiveness of such Registration Statement or the
initiation of any proceedings for that purpose, (iii) of any request by
the Commission or any other federal, state, or foreign governmental authority
for amendments or supplements to such Registration Statement or related
Prospectus or for additional information, (iv) of the happening of any
event during the period such Registration Statement is effective as a result of
which such Registration Statement or the related Prospectus or any document
incorporated by reference therein contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading (which information
shall be accompanied by an instruction to suspend the use of the Registration
Statement and the Prospectus until the requisite changes have been made) and (v) at
the request of any such Holder, promptly to furnish to such Holder a reasonable
number of copies of a supplement to or an amendment of such Prospectus prepared
in accordance with Section 4(i);


 


(g)                                 during
the period of time referred to in Section 2(a)(i), use its reasonable
best efforts to avoid the issuance of, or if issued, to obtain the withdrawal
of, any order enjoining or suspending the use or effectiveness of a
Registration Statement or suspending the qualification (or exemption from
qualification) of any of the Registrable Shares for sale in any jurisdiction,
as promptly as practicable;


 


12

















 


(h)                                 upon
request, furnish to each requesting Holder with Registrable Shares covered by a
Registration Statement, without charge, at least one conformed copy of such
Registration Statement and any post-effective amendment or supplement thereto
(without documents incorporated therein by reference or exhibits thereto,
unless requested);


 


(i)                                     except
as provided in Section 5, upon the occurrence of any event
contemplated by Section 4(f)(iv), use its reasonable best efforts
to promptly prepare a supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Shares, such Prospectus will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and,
upon request, promptly furnish to each requesting Holder covered by such
Registration Statement a reasonable number of copies of each such supplement or
post-effective amendment;


 


(j)                                     if
requested by the representative of the underwriters, if any, or any Holders of
Registrable Shares being sold in connection with such offering, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
material information as the representative of the underwriters, if any, or such
Holders indicate relates to them or otherwise reasonably request be included
therein and (ii) make all required filings of such Prospectus supplement
or such post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment;


 


(k)                                  in
the case of an Underwritten Offering with reasonably anticipated gross proceeds
of at least $15 million, use its reasonable best efforts to furnish or caused
to be furnished to each Holder of Registrable Shares covered by such
Registration Statement and the underwriters a signed counterpart, addressed to
each such Holder (to the extent customarily so addressed) and the underwriters,
of:  (i) an opinion of counsel for
the Company, dated the date of each closing under the underwriting agreement,
reasonably satisfactory to the underwriters; and (ii) a “comfort” letter,
dated the effective date of such Registration Statement and the date of each
closing under the underwriting agreement, signed by the independent public
accountants who have certified the Company’s financial statements included in
such Registration Statement, covering substantially the same matters with respect
to such Registration Statement (and the Prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants’ letters delivered to underwriters in
underwritten public offerings of securities, and such other financial matters
as the underwriters may reasonably request and customarily obtained by
underwriters in underwritten offerings, provided that, to be an addressee of
the comfort letter, each Holder may be required to confirm that it is in
the category of persons to whom a comfort letter may be delivered in
accordance with applicable accounting literature;


 


(l)                                     enter
into customary agreements (including in the case of an Underwritten Offering,
an underwriting agreement in customary form) and take all other action in
connection therewith to expedite or facilitate the distribution of the
Registrable Shares included in such Registration Statement and, in the case of
an Underwritten Offering, make representations and


 


13

















 


warranties to the
underwriters in such form and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same to the extent
customary if and when requested;


 


(m)                               in
the case of an Underwritten Offering with reasonably anticipated gross proceeds
of at least $15 million, use its reasonable best efforts to make available for
inspection by the representatives of the Holders and the representative of any
underwriters participating in any disposition pursuant to a Registration
Statement, and any special counsel or accountants retained by such Holders or
underwriters, all financial and other records, pertinent corporate documents
and properties of the Company and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any
such representatives, the representative of the underwriters, counsel thereto
or accountants in connection with a Registration Statement; provided, however, that such
records, documents or information that the Company determines, in good faith,
to be confidential and notifies such representatives, representative of the
underwriters, counsel thereto or accountants are confidential shall not be
disclosed by the representatives, representative of the underwriters, counsel
thereto or accountants unless (i) the disclosure of such records,
documents or information is necessary to avoid or correct a misstatement or
omission in a Registration Statement or Prospectus, (ii) the release of
such records, documents or information is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, or (iii) such records,
documents or information have been generally made available to the public;


 


(n)                                 use
its reasonable best efforts to list or include all Registrable Shares on the
New York Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market
(if the Company meets the listing criteria for any such exchange or market);


 


(o)                                 prepare
and file in a timely manner all documents and reports required by the Exchange
Act and, to the extent the Company’s obligation to file such reports pursuant
to Section 15(d) of the Exchange Act expires prior to the expiration
of the effectiveness period of the Registration Statement as required by Section 2(a)(i),
the Company shall register the Registrable Shares under the Exchange Act and
shall maintain such registration through the effectiveness period required by Section 2(a)(i);


 


(p)                                 provide
a CUSIP number for all Registrable Shares not later than the effective date of
the Registration Statement;


 


(q)                                 (i) otherwise
use its reasonable best efforts to comply in all material respects with all
applicable rules and regulations of the Commission, (ii) make generally
available to its stockholders, as soon as reasonably practicable, earnings
statements covering at least 12 months that satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 thereunder, and (iii) delay filing
any Registration Statement or Prospectus or amendment or supplement to such
Registration Statement or Prospectus to which any Holder of Registrable Shares
covered by any such Registration Statement shall have reasonably objected on
the grounds that such Registration Statement or Prospectus or amendment or
supplement does not comply in all material respects with the requirements of
the Securities Act, such Holder having been furnished with a copy thereof at
least three Business Days before the filing thereof, provided that the Company may file
such Registration Statement or Prospectus or amendment or supplement following
such time as 


 


14

















 


the Company shall have
made a good faith effort to resolve any such issue with the objecting Holder
and shall have advised the Holder in writing of its reasonable belief that such
filing complies in all material respects with the requirements of the
Securities Act;


 


(r)                                    cause
to be maintained a registrar and transfer agent for all Registrable Shares
covered by any Registration Statement from and after a date not later than the
effective date of such Registration Statement;


 


(s)                                  in
connection with any sale or transfer of the Registrable Shares (whether or not
pursuant to a Registration Statement) that will result in the securities being
delivered no longer constituting Registrable Shares, cooperate with the Holders
and the representative of the underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing the Registrable Shares to
be sold, which certificates shall not bear any transfer restrictive legends
(other than as required by the Company’s charter), and to enable such
Registrable Shares to be in such denominations and registered in such names as
the representative of the underwriters, if any, or the Holders may request
at least three Business Days prior to any sale of the Registrable Shares; provided,
however, that such Holder has provided the Company with any documents that
are reasonably requested by the Company;


 


(t)                                    if
required under the rules of the NASD, in connection with the initial
filing of a Shelf Registration Statement and each amendment thereto with the
Commission pursuant to Section 2(a), prepare and file with the NASD
all forms and information required or requested by the NASD in order to obtain
written confirmation from the NASD that the NASD does not object to the
fairness and reasonableness of the underwriting terms and arrangements (or any
deemed underwriting terms and arrangements) (each such written confirmation, a “No Objections Letter”) relating to
the resale of Registrable Shares pursuant to the Shelf Registration Statement,
including, without limitation, information provided to the NASD through its
COBRADesk system, and pay all costs, fees and expenses incident to the NASD’s
review of the Shelf Registration Statement and the related underwriting terms
and arrangements, including, without limitation, all filing fees associated
with any filings or submissions to the NASD and the legal expenses, filing fees
and other disbursements of FBR and any other NASD member that is the holder of,
or is affiliated or associated with an owner of, Registrable Shares included in
the Shelf Registration Statement (including in connection with any initial or subsequent
member filing); and


 


(u)                                 upon
effectiveness of the first Registration Statement filed under this Agreement,
the Company will take such actions and make such filings as are necessary to
effect the registration of the Common Stock under the Exchange Act
simultaneously with or immediately following the effectiveness of the
Registration Statement.


 


The Company may require
the Holders to furnish to the Company such information regarding the proposed
distribution by such Holder as the Company may from time to time
reasonably request in writing or as shall be required to effect the
registration of the Registrable Shares, and no Holder shall be entitled to be
named as a selling stockholder in any Registration Statement and no Holder
shall be entitled to use the Prospectus forming a part thereof if such
Holder does not provide such information to the Company. Each Holder further
agrees to


 


15

















 


furnish
promptly to the Company in writing all information required from time to time
to make the information previously furnished by such Holder not misleading.


 


Each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of
the kind described in Section 4(f)(ii), 4(f)(iii) or 4(f)(iv),
such Holder will immediately discontinue disposition of Registrable Shares
pursuant to a Registration Statement until (i) any such stop order is
vacated or (ii) if an event described in Section 4(f)(iii) or
4(f)(iv) occurs, such Holder’s receipt of the copies of the
supplemented or amended Prospectus. If so directed by the Company, such Holder
will deliver to the Company (at the reasonable expense of the Company) all
copies in its possession, other than permanent file copies then in such Holder’s
possession, of the Prospectus covering such Registrable Shares current at the
time of receipt of such notice.


 


5.                                       Suspension
Period.


 


(a)                                  Subject
to the provisions of this Section 5, following the effectiveness of
a Registration Statement (and the filings with any international, federal or
state securities commissions), the Company may direct the Holders, in
accordance with Section 5(b), to suspend sales of the Registrable
Shares pursuant to a Registration Statement for such times as the Company
reasonably may determine is necessary and advisable (but in no event, (A) in
the case of clause (i) below, for more than 45 consecutive days (or 60
consecutive days in the case of the IPO Registration Statement) and (B) in
the case of clauses (i), (ii) and (iii) below, for more than an
aggregate of 90 days in any consecutive 12-month
period commencing on the Closing Date or more than 60 days
in any consecutive 90-day period, except (in the case of clause (B)) as a
result of a review of any post-effective amendment by the Commission prior to
declaring any post-effective amendment to the Registration Statement effective,
provided that Company has used its reasonable best efforts to cause such
post-effective amendment to be declared effective), so long as in each of the following cases the Prior Holders are given a
substantially similar notice and are required to suspend sales for the same
period, if any of the following events shall occur:  (i) the representative of the
underwriters of an Underwritten Offering of primary shares by the Company has
advised the Company that the sale of Registrable Shares pursuant to the
Registration Statement would have a material adverse effect on such
Underwritten Offering; (ii) the majority of the members of the Board of
Directors of the Company shall have determined in good faith that (1) the
offer or sale of any Registrable Shares would materially impede, delay or
interfere with any proposed financing, offer or sale of securities,
acquisition, merger, tender offer, business combination, corporate
reorganization, consolidation or other significant transaction involving the
Company, (2) upon the advice of counsel, the sale of Registrable Shares
pursuant to the Registration Statement would require disclosure of non-public
material information not otherwise required to be disclosed under applicable
law, and (3) either (x) the Company has a bona fide business purpose
for preserving the confidentiality of such transaction, (y) disclosure would
have a material adverse effect on the Company or the Company’s ability to
consummate such transaction, or (z) the proposed transaction renders the
Company unable to comply with Commission requirements, in each case under
circumstances that would make it impractical or inadvisable to cause the
Registration Statement (or such filings) to become effective or to promptly
amend or supplement the Registration Statement on a post-effective basis, as
applicable; or (iii) the majority of the members of the Board of Directors
of the Company shall have determined in good faith that it is required by law, rule or
regulation or


 


16

















 


Commission published
release or interpretation to supplement the Registration Statement or file a
post-effective amendment to the Registration Statement in order to incorporate
information into the Registration Statement for the purpose of (1) including
in the Registration Statement any prospectus required under Section 10(a)(3) of
the Securities Act; (2) reflecting in the prospectus included in the Registration
Statement any facts or events arising after the effective date of the
Registration Statement (or of the most-recent post-effective amendment) that,
individually or in the aggregate, represents a fundamental change in the
information set forth therein; or (3) including in the prospectus included
in the Registration Statement any material information with respect to the plan
of distribution not disclosed in the Registration Statement or any material
change to such information. Upon the occurrence of any such suspension, the
Company shall use its reasonable best efforts to cause the Registration
Statement to become effective or to promptly amend or supplement the
Registration Statement on a post-effective basis or to take such action as is
necessary to make resumed use of the Registration Statement compatible with the
Company’s best interests, as applicable, so as to permit the Holders to resume
sales of the Registrable Shares as soon as possible.


 


(b)                                 In
the case of an event that causes the Company to suspend the use of a
Registration Statement (a “Suspension Event”),
the Company shall give written notice (a “Suspension Notice”)
to FBR and the Holders to suspend sales of the Registrable Shares and such
notice shall continue only for so long as the Suspension Event or its effect is
continuing. No Holder shall effect any sales of the Registrable Shares pursuant
to such Registration Statement (or such filings) at any time after it has
received a Suspension Notice from the Company and prior to receipt of an End of
Suspension Notice (as defined below). If so directed by the Company, each
Holder will deliver to the Company (at the expense of the Company) all copies
other than permanent file copies then in such Holder’s possession of the
Prospectus covering the Registrable Shares at the time of receipt of the
Suspension Notice. The Holders may recommence effecting sales of the
Registrable Shares pursuant to the Registration Statement (or such filings)
following further notice to such effect (an “End
of Suspension Notice”) from the Company, which End of Suspension
Notice shall be given by the Company to the Holders and FBR in the manner
described above promptly following the conclusion of any Suspension Event and
its effect.


 


(c)                                  Notwithstanding
any provision herein to the contrary, subject to any Suspension Events or as
contemplated by Section 4(f)(iv), each Registration Statement shall
be maintained effective pursuant to this Agreement until the Registrable Shares
are not Registrable Shares.


 


6.                                       Indemnification
and Contribution.


 


(a)                                  The
Company agrees to indemnify and hold harmless (i) FBR, each Holder and any
underwriter (as determined in the Securities Act) for such Holder (including,
if applicable, FBR), (ii) each Person, if any, who controls (within the
meaning of Section 15 of the Securities Act or Section 20(a) of
the Exchange Act) any of the foregoing (a “Controlling Person”),
and (iii) the respective officers, directors, partners, members,
employees, representatives and agents of any such Person or any Controlling
Person (any Person referred to in clause (i), (ii) or (iii) may hereinafter
be referred to as an “Purchaser Indemnitee”)
from and against any and all losses, claims, damages, judgments, actions,
reasonable out-of-pocket expenses, and other liabilities, including, as
incurred, reimbursement of all reasonable costs of investigating,


 


17

















 


preparing, pursuing or
defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable
fees and expenses of outside counsel to any Purchaser Indemnitee, joint or
several (the “Liabilities”), directly or
indirectly related to, based upon, arising out of or in connection with any
untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement or Prospectus (as amended or supplemented if the
Company shall have furnished to such Purchaser Indemnitee any amendments or
supplements thereto), or any preliminary Prospectus or any other document
prepared by the Company which document the Company has expressly authorized the
use of in connection with the offering of Registrable Shares pursuant to this
Agreement, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a Prospectus, in light of the circumstances under which they were
made), not misleading, except insofar as such Liabilities arise out of or are based
upon (i) any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Purchaser Indemnitee furnished to the Company or any underwriter in writing
by such Purchaser Indemnitee expressly for use therein, or (ii) any sales
by any Holder after the delivery by the Company to such Holder of a Suspension
Notice and before the delivery by the Company of an End of Suspension Notice. The
Company shall notify the Holders promptly of the institution, threat or
assertion of any claim, proceeding (including any governmental investigation),
or litigation which it shall have become aware in connection with the matters
addressed by this Agreement which involves the Company or a Purchaser
Indemnitee. The indemnity provided for herein shall remain in full force and
effect regardless of any investigation made by or on behalf of any Purchaser
Indemnitee.


 


(b)                                 In
connection with any Registration Statement in which a Holder is participating, such
Holder agrees, severally and not jointly, to indemnify and hold harmless FBR,
the Company, each Person who controls the Company or FBR within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act, and the
respective officers, directors, partners, members, representatives, employees
and agents of such Person or Controlling Person to the same extent as the
foregoing indemnity from the Company to each Purchaser Indemnitee, but only
with reference to (i) untrue statements or omissions or alleged untrue
statements or omissions made in reliance upon and in strict conformity with
information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary Prospectus and (ii) any
sales by any Holder after the delivery by the Company to such Holder of a
Suspension Notice and before the delivery by the Company of an End of
Suspension Notice. The liability of any Holder pursuant to clause (i) of
the immediately preceding sentence shall in no event exceed the net proceeds
received by such Holder from sales of Registrable Shares giving rise to such
obligations. If a Holder elects to include Registrable Shares in an
Underwritten Offering, the Holder shall be required to agree to such customary
indemnification provisions as may reasonably be required by the
underwriter in connection with such Underwritten Offering.


 


(c)                                  If
any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b), such Person (the “Indemnified Party”),
shall promptly notify the Person against whom such indemnity may be sought
(the


 


18

















 


“Indemnifying
Party”), in writing (to the extent legally advisable) of the
commencement thereof (but the failure to so notify an Indemnifying Party shall
not relieve it from any Liability which it may have under this Section 6,
except to the extent the Indemnifying Party is materially prejudiced by the
failure to give notice), and the Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may reasonably designate in such proceeding and shall
assume the defense of such proceeding and pay the fees and expenses actually
incurred by such counsel related to such proceeding. Notwithstanding the
foregoing, in any such proceeding, any Indemnified Party may retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Party, unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Party failed within a reasonable time after notice of commencement
of the action to assume the defense and employ counsel reasonably satisfactory
to the Indemnified Party, (iii) the Indemnifying Party and its counsel do
not pursue in a reasonable manner the defense of such action or (iv) the
named parties to any such action (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, or any Affiliate of the
Indemnifying Party, and such Indemnified Party shall have been reasonably
advised by counsel that, either (x) there may be one or more legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party or such Affiliate of the Indemnifying Party
or (y) a conflict may exist between such Indemnified Party and the
Indemnifying Party or such Affiliate of the Indemnifying Party, in which event
the Indemnifying Party may not assume or direct the defense of such action
on behalf of such Indemnified Party, it being understood, however, that the
Indemnifying Party shall not, in connection with any one such action or
separate but substantially similar or related actions arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Indemnified Parties, which firm shall be designated in writing by
those Indemnified Parties who sold a majority of the Registrable Shares sold by
all such Indemnified Parties and any such separate firm for the Company, the
directors, the officers and such control Persons of the Company as shall be designated
in writing by the Company. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final non-appealable judgment for
the plaintiff, the Indemnifying Party agrees to indemnify any Indemnified Party
from and against any Liability by reason of such settlement or judgment to the
extent provided in this Section 6 without reference to this
sentence. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all Liability on claims that are the subject matter of such
proceeding.


 


(d)                                 If
the indemnification provided for in Section 6(a) or 6(b) is
for any reason held to be unavailable to an Indemnified Party in respect of any
Liabilities referred to therein (other than by reason of the exceptions
provided therein) or is insufficient to hold harmless a party indemnified
thereunder, then each Indemnifying Party under such sections, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Liabilities (i) in
such proportion as is appropriate to


 


19

















 


reflect the relative
benefits of the Indemnified Party on the one hand and the Indemnifying Parties
on the other in connection with the statements or omissions that resulted in
such Liabilities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Indemnifying Parties and the Indemnified Party,
as well as any other relevant equitable considerations. The relative fault of
the Company, on the one hand, and any Purchaser Indemnitees, 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 Company or by
such Purchaser Indemnitees and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.


 


(e)                                  The
parties agree that it would not be just and equitable if contribution pursuant
to this Section 6 were determined by pro rata allocation
(even if such Indemnified Parties were treated as one entity for such purpose),
or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 6(d). The amount
paid or payable by an Indemnified Party as a result of any Liabilities referred
to in Section 6(d) shall be deemed to include, subject to the
limitations set forth above, any reasonable legal or other expenses actually
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this Section 6,
in no event shall a Purchaser Indemnitee be required to contribute any amount
in excess of the amount by which proceeds received by such Purchaser Indemnitee
from sales of Registrable Shares exceeds the amount of any damages that such
Purchaser Indemnitee has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. For
purposes of this Section 6, each Person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act) FBR or a Holder shall have the same rights to contribution as
FBR or such Holder, as the case may be, and each Person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act) the Company, and each officer, director, partner, member,
employee, representative, agent or manager of the Company shall have the same
rights to contribution as the Company. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be
made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 6
or otherwise, except to the extent that any party is materially prejudiced by
the failure to give notice. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act), shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.


 


(f)                                    The
indemnity and contribution agreements contained in this Section 6
will be in addition to any Liability which any Indemnifying Party may otherwise
have to any Indemnified Party referred to above. Each Purchaser Indemnitee’s
obligations to contribute pursuant to this Section 6 are not joint
but are several in the proportion that the number of Shares sold by such
Purchaser Indemnitee bears to the number of Shares sold by all Purchaser
Indemnities.


 


20

















 


7.                                       Market
Stand-off Agreement.


 


Each Holder hereby agrees
that it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, directly or indirectly sell, offer to sell
(including without limitation any short sale), grant any option or otherwise
transfer or dispose of any Registrable Shares or other shares of Common Stock
of the Company or any securities convertible into or exchangeable or
exercisable for shares of Common Stock of the Company then owned by such Holder
(other than to donees or partners of the Holder who agree to be similarly bound)
for a period of 60 days following the effective date of a registration
statement (other than the Mandatory Shelf Registration Statement) for an
initial public offering of securities by the Company filed under the Securities
Act (an “IPO Registration Statement”);
provided, however, that:


 


(a)                                  the
restrictions above shall not apply to Registrable Shares sold pursuant to the
IPO Registration Statement;


 


(b)                                 all
Prior Holders, and all executive officers and directors of the Company then
holding shares of Common Stock of the Company or securities convertible into or
exchangeable or exercisable for shares of Common Stock of the Company are
subject to the same restrictions for the entire time period required of the
Holders hereunder;


 


(c)                                  the
Holders shall be allowed any concession or proportionate release allowed to any
officer or director that entered into similar agreements (with such proportion
being determined by dividing the number of shares being released with respect
to such officer or director by the total number of issued and outstanding
shares held by such officer or director); provided, that nothing in this Section 7(c) shall
be construed as a right to proportionate release for the executive officers and
directors of the Company upon the expiration of the 60-day period applicable to
all Holders other than the executive officers and directors of the Company.


 


In order to enforce the
foregoing covenant, the Company shall have the right to place restrictive
legends on the certificates representing the securities subject to this Section 7
and to impose stop transfer instructions with respect to the Registrable Shares
and such other securities of each Holder (and the securities of every other
Person subject to the foregoing restriction) until the end of such period.


 


8.                                       Termination
of the Company’s Obligations.


 


The Company shall have no
further obligations pursuant to this Agreement at such time as no Registrable
Shares are outstanding after their original issuance, provided, however,
that the Company’s obligations under Sections 6 and 10 (and any
related definitions) shall remain in full force and effect following such time.


 


9.                                       Limitations
on Subsequent Registration Rights.


 


From and after the date
of this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the Registrable Shares of such Holders that are
not Affiliates of the Company, enter into any agreement with any holder or
prospective holder of any securities of the Company that would allow such
holder or prospective holder to include such securities in the Mandatory Shelf
Registration Statement or the IPO Registration Statement, if any, filed
pursuant to the terms hereof, unless under the terms of such agreement, such
holder


 


21

















 


or
prospective holder may include such securities on the Mandatory Shelf
Registration Statement or such IPO Registration Statement only to the extent
that the inclusion of such securities will not reduce the amount of Registrable
Shares of the Holders that is included on the Mandatory Shelf Registration
Statement or such IPO Registration Statement.


 


10.                                 Miscellaneous.


 


(a)                                  Remedies.
In the event of a breach by the Company of any of its obligations under this
Agreement, each Holder, in addition to being entitled to exercise all rights
provided herein or, in the case of FBR, in the Placement Agreement, or granted
by law, including recovery of damages, will be entitled to specific performance
of its rights under this Agreement. Subject to Section 6, the
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.


 


(b)                                 Amendments
and Waivers. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions hereof
may not be given, without the written consent of the Company and Holders
beneficially owning a majority of the Registrable Shares; provided, however, that
for purposes of this Agreement, Registrable Shares owned, directly or
indirectly, by an Affiliate of the Company shall not be deemed to be
outstanding. Notwithstanding the foregoing, a waiver or consent to or departure
from the provisions hereof with respect to a matter that relates exclusively to
(i) the Mandatory Shelf Registration Statement may be given only with
the consent of a majority of Registrable Shares covered thereby and (ii) the
rights of a Holder whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair, limit or
compromise the rights of other Holders may be given by such Holder; provided that the provisions of this sentence may not
be amended, modified or supplemented except in accordance with the provisions
of the immediately preceding sentence.


 


(c)                                  Notices.
All notices and other communications, provided for or permitted hereunder shall
be made in writing and delivered by facsimile (with receipt confirmed),
overnight courier or registered or certified mail, return receipt requested, or
by telegram, addressed as follows:


 


(i)                                     if
to a Holder, at the most current address given by the transfer agent and
registrar of the Shares to the Company;


 


(ii)                                  if
to the Company, at the offices of the Company at 1300 South 2nd
Street, Pekin, Illinois, 61554, Attention: 
Ron Miller (facsimile (309) 347-8541); with a copy (which shall not
constitute notice) to David Polk & Wardwell, 450 Lexington Avenue, New
York, New York, 10017, Attention: 
Richard D. Truesdell, Jr., Esq. (facsimile (212) 450-3674);
and


 


(iii)                               if
to FBR, at the offices of FBR at 1001 19th Street North, Arlington,
Virginia 22209, Attention:  William
Ginivan, Esq. (facsimile (804) 788-8218); with a copy (which shall not
constitute notice) to Akin Gump Strauss Hauer & Feld LLP, 1111
Louisiana St., Houston, Texas 77002, Attention: 
Julien R. Smythe, Esq. (facsimile (713) 236-0822).


 


22

















 


(d)                                 Confidentiality.
FBR will not use confidential information obtained from the Company pursuant to
this Agreement or its other relationships with the Company other than in
connection with the performance by FBR of its obligations hereunder. FBR will
not furnish any such confidential information to other companies or third
parties. The Company also acknowledges that FBR has no obligation to use in connection
with this Agreement, or to furnish to the Company, confidential information
obtained from other companies.


 


(e)                                  Successors
and Assigns; Third Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties hereto and shall inure to the benefit of each Holder. The Company
agrees that the Holders shall be third party beneficiaries to the agreements
made hereunder by FBR and the Company, and each Holder shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder; provided, however, that such Holder fulfills all of its
obligations hereunder.


 


(f)                                    No
Inconsistent Terms. The Company
represents, warrants and agrees that (i) the rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of any other outstanding securities issued or
guaranteed by the Company under any
other agreement and (ii) the Company has not entered into any agreement
that is inconsistent with the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof.


 


(g)                                 Counterparts.
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same agreement.


 


(h)                                 Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK OR THE SUPREME COURT
OF THE STATE OF NEW YORK OR SITTING IN NEW YORK COUNTY IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.


 


23

















 


(i)                                     Severability.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties hereto that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such
that may be hereafter declared invalid, illegal, void or unenforceable.


 


(j)                                     Entire
Agreement. This Agreement, together with the Placement Agreement, is intended
by the parties hereto as a final expression of their agreement, and is intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein and
therein. All of the obligations, agreements, covenants, representations and
warranties under the engagement letter dated December 12, 2005, between
the Company and FBR (the “Engagement Letter”)
shall survive the execution, delivery and termination and the performance of
this Agreement and the consummation of the transactions contemplated hereby
without any modification thereof; provided,  that to the extent there is a conflict between the
provisions of the Engagement Letter and the provisions of this Agreement, this
Agreement shall prevail to that extent.


 


(k)                                  Registrable
Shares Held by the Company or its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Shares is required
hereunder, Registrable Shares (or securities convertible into Registrable
Shares) held by the Company or Affiliates of the Company shall not be counted
in determining whether such consent or approval was given by the Holders of
such required percentage.


 


(l)                                     Survival.
This Agreement is intended to survive the consummation of the transactions
contemplated by the Placement Agreement. The indemnification and contribution
obligations under Section 6 shall survive the termination of the
Company’s obligations under Section 2.


 


(m)                               Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the provisions of this Agreement. All references
made in this Agreement to “Section” refer to such Section of this
Agreement, unless expressly stated otherwise.


 


(n)                                 Adjustment
for Stock Splits, etc. Wherever in this Agreement there is a reference to a
specific number of shares with respect to any securities, then upon the
occurrence of any subdivision, combination, or stock dividend of such shares,
the specific number of shares with respect to any securities so referenced in
this Agreement shall automatically be proportionally adjusted to reflect the
effect on the outstanding shares of such class or series of stock by
such subdivision, combination, or stock dividend.


 


[Remainder of this Page Intentionally
Left Blank]


 


24

















 


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


 


	
   

  	
  AVENTINE
  RENEWABLE ENERGY

  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Ronald H. Miller

  
	
   

  	
  Title:

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FRIEDMAN,
  BILLINGS, RAMSEY & CO., INC. (for the benefit
  of the Holders)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


Signature Page – Registration Rights Agreement


 

















 


ANNEX A