Document:

EXHIBIT 10.5

 

RIGHTS
AGREEMENT

 

dated as of

 

December 19, 2005

 

between

 

AVENTINE
RENEWABLE ENERGY HOLDINGS, INC.

 

and

 

AMERICAN
STOCK TRANSFER & TRUST COMPANY,

 

as Rights Agent

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Definitions

  	
  1

  
	
  Section 2.

  	
  Other Definitional and Interpretative Provisions

  	
  6

  
	
  Section 3.

  	
  Issuance Of Rights And Right Certificates

  	
  6

  
	
  Section 4.

  	
  Form of Right Certificates

  	
  8

  
	
  Section 5.

  	
  Registration; Transfer and Exchange of Right
  Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates

  	
  9

  
	
  Section 6.

  	
  Exercise of Rights

  	
  9

  
	
  Section 7.

  	
  Cancellation and Destruction of Right Certificates

  	
  11

  
	
  Section 8.

  	
  Reservation and Availability of Capital Stock

  	
  12

  
	
  Section 9.

  	
  Adjustment of Purchase Price, Number and Kind of
  Shares or Number of Rights

  	
  13

  
	
  Section 10.

  	
  Certificate of Adjusted Purchase Price or Number of
  Shares

  	
  21

  
	
  Section 11.

  	
  Consolidation, Merger or Sale or Transfer of Assets
  or Earning Power

  	
  21

  
	
  Section 12.

  	
  Fractional Rights and Fractional Shares

  	
  23

  
	
  Section 13.

  	
  Rights of Action

  	
  24

  
	
  Section 14.

  	
  Agreement of Right Holders

  	
  25

  
	
  Section 15.

  	
  Right Certificate Holder Not Deemed a Stockholder

  	
  25

  
	
  Section 16.

  	
  Appointment of Rights Agent

  	
  26

  
	
  Section 17.

  	
  Merger or Consolidation or Change of Name of Rights
  Agent

  	
  26

  
	
  Section 18.

  	
  Duties of the Rights Agent

  	
  27

  
	
  Section 19.

  	
  Change of Rights Agent

  	
  29

  
	
  Section 20.

  	
  Redemption

  	
  30

  
	
  Section 21.

  	
  Exchange

  	
  30

  
	
  Section 22.

  	
  Notice of Proposed Actions

  	
  31

  
	
  Section 23.

  	
  Independent Director Evaluation

  	
  32

  
	
  Section 24.

  	
  Notices

  	
  33

  
	
  Section 25.

  	
  Supplements and Amendments

  	
  33

  
	
  Section 26.

  	
  Successors

  	
  34

  
	
  Section 27.

  	
  Determinations and Actions by the Board, etc

  	
  34

  
	
  Section 28.

  	
  Benefits of This Agreement

  	
  34

  
	
  Section 29.

  	
  Severability

  	
  34

  
	
  Section 30.

  	
  Governing Law

  	
  35

  
	
  Section 31.

  	
  Counterparts

  	
  35

  
	
   

  	
   

  	
   

  
	
  Exhibit A -

  	
  Form of Certificate of Designation of Preferred Stock

  	
   

  
	
  Exhibit B  -

  	
  Summary Description of the Stockholder Rights Plan

  	
   

  
	
  Exhibit C  -

  	
  Form of Right Certificate

  	
   

  

 

i

 

RIGHTS
AGREEMENT

 

AGREEMENT dated as of December 19,
2005, between Aventine Renewable Energy Holdings, Inc., a Delaware
corporation (the “Company”), and
American Stock Transfer & Trust Company, as Rights Agent (the “Rights Agent”).

 

W I T N E S
S E T H

 

WHEREAS, on December 12,
2005, the Board of Directors of the Company authorized and declared a dividend
of one preferred stock purchase right (a “Right”)
for each share of Common Stock (as defined below) outstanding at the close of
business (as defined below) on December 19, 2005 (the “Record Date”) and authorized the issuance,
upon the terms and subject to the conditions herein, of one Right (subject to
adjustment) in respect of each share of Common Stock issued after the Record
Date, each Right representing the right to purchase, upon the terms and subject
to the conditions herein, one one-thousandth (subject to adjustment) of a share
of Preferred Stock (as defined below);

 

NOW, THEREFORE, the parties
hereto agree as follows:

 

Section 1. Definitions. (a) The following
terms, as used herein, have the following meanings:

 

“Acquiring Person” means any Person who, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of the
Specified Percentage of shares of outstanding Common Stock; provided that “Acquiring Person” shall not
include:

 

(i) an Exempt Person;

 

(ii) any Person that the Board determines in good faith became the
Beneficial Owner of the Specified Percentage of shares of outstanding Common
Stock inadvertently (including, without limitation, because such Person was
unaware that it Beneficially Owned the Specified Percentage of shares of
outstanding Common Stock, or such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, unless such Person
fails to divest itself, as soon as practicable (as determined in good faith by
the Board), of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would own less than the Specified Percentage of
shares of outstanding Common Stock; and

 

 

(iii) any Person that, as the result of an acquisition of shares
of Common Stock by the Company that, by reducing the number of shares of Common
Stock outstanding, increases the proportionate number of shares of Common Stock
Beneficially Owned by such Person to the Specified Percentage of shares of
Common Stock then outstanding; provided,
however, that if such Person
shall thereafter become the Beneficial Owner of any additional shares of Common
Stock (other than pursuant to a dividend or distribution paid or made by the
Company or pursuant to a split or subdivision of the outstanding Common Stock),
then such Person shall be deemed to be an “Acquiring Person” unless upon
becoming the Beneficial Owner of such additional shares of Common Stock such
Person does not Beneficially Own the Specified Percentage of the shares of
Common Stock then outstanding;

 

“Affiliate” has the meaning ascribed to such term in Rule 12b-2
under the Exchange Act as in effect on the date hereof.

 

“Associate” has the meaning ascribed to such term in Rule 12b-2
of the Exchange Act as in effect on the date hereof.

 

A Person shall be deemed the
“Beneficial Owner” of, and shall
be deemed to have “Beneficial Ownership”
of and to “Beneficially Own”, any
securities:

 

(i) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to Rule 13d-3
under the Exchange Act as in effect on the date hereof) (other than securities
acquired pursuant to customary agreements with and between underwriters,
initial purchasers or selling group members with respect to a bona fide public
offering of such securities, or a private placement of securities pursuant to
an exemption under the Securities Act, by the Company);

 

(ii) which such Person or any of its Affiliates or Associates,
directly or indirectly, has

 

(A) the right to acquire (whether such right is exercisable immediately
or only upon the occurrence of certain events or the passage of time or both)
pursuant to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters, initial purchasers or selling group
members with respect to a bona fide public offering of such securities, or a
private placement of securities pursuant to an exemption under the Securities
Act, by the Company); provided
that a Person shall not be deemed the “Beneficial Owner” of or to “Beneficially
Own”, (1) securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such

 

2

 

Person’s
Affiliates or Associates until such tendered securities are accepted for purchase
or exchange, (2) securities that such Person has a right to acquire upon
the exercise of Rights at any time prior to the time that any Person becomes an
Acquiring Person or (3) securities issuable upon the exercise of Rights
from and after the time that any Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such Person’s Affiliates or
Associates prior to the Distribution Date or pursuant to Sections 3(b), 4(c), 9(i) or
9(p); or

 

(B) the right to vote (whether such right is exercisable
immediately or only upon the occurrence of certain events or the passage of
time or both) pursuant to any agreement, arrangement or understanding; provided that a Person shall not be deemed
the “Beneficial Owner” of or to “Beneficially Own” any security under this
clause (B) as a result of an agreement, arrangement or other understanding
to vote such security if such agreement, arrangement or understanding (1) arises
solely from a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) (x) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable
or successor report) or (y) would not have also been then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report) if the Common Stock was registered pursuant to Section 12
of the Exchange Act; or

 

(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) other than an Exempt
Person and with respect to which the Person or any of its Affiliates or
Associates has any agreement, arrangement or other understanding (other than
customary agreements with and between underwriters, initial purchasers or
selling group members with respect to a bona fide public offering of such
securities, or a private placement of securities pursuant to an exemption under
the Securities Act, by the Company) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or consent as described in clause
(ii)(B) immediately above) or disposing of any such securities;

 

provided, however,
that no Person who is an officer, director or employee of an Exempt Person
shall be deemed, solely by reason of such position, to be the “Beneficial Owner”
of, to have “Beneficial Ownership” of or to “Beneficially Own” any securities
that are “Beneficially Owned”, including, without limitation, in a fiduciary
capacity, by an Exempt Person or by any other such officer, director or
employee of an Exempt Person.

 

3

 

“Board” means the Board of Directors of the Company.

 

“Business Day” means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.

 

“Close of Business” on any given date means 5:00 p.m., New
York City time, on such date; provided
that if such date is not a Business Day “close of business” means 5:00 p.m.,
New York City time, on the next succeeding Business Day.

 

“Common Stock” means the Common Stock, par value $0.001 per
share, of the Company, except that, when used with reference to any Person
other than the Company, “Common Stock” means the equity securities or other
equity interest having power to control or direct the management of such
Person.

 

“Distribution Date” means the earlier of (i) the close of
business on the tenth Business Day after the Stock Acquisition Date and (ii) the
close of business on the tenth Business Day (or such later day as may be
designated prior to the occurrence of a Section 9(a)(ii) Event by the
Board) after the date of the commencement of a tender or exchange offer by any
Person if, upon consummation thereof, such Person would be an Acquiring Person;
provided, however, that if either of such dates
occurs after the date of this Agreement and on or prior to the Record Date,
then the Distribution Date shall be the Record Date.

 

“Exempt Person” means (i) Aventine Renewable Energy
Holdings, LLC and its successors, the members of Aventine Renewable Energy
Holdings, LLC and their respective directors, officers, employees and general
or limited partners, and the Affiliates or Associates of each of the foregoing,
(ii) the Company or any Subsidiary of the Company (in each case including,
without limitation, in any fiduciary capacity) and (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
or trustee holding Common Stock for or pursuant to the terms of any such plan
or for the purpose of funding any such plan or other benefits for employees of
the Company or of any Subsidiary of the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as
amended, unless otherwise expressly specified.

 

“Expiration Date” means the earlier of (i) the Final
Expiration Date and (ii) the time at which all Rights are redeemed as
provided in Section 20 or exchanged as provided in Section 21.

 

“Final Expiration Date” means the close of business on November 30,
2015.

 

4

 

“Initial Public Offering” means the first underwritten sale of
the Company’s Common Stock pursuant to an effective registration statement
under the Securities Act filed with the Securities and Exchange Commission on Form S-1
(or a successor form) after which sale the Common Stock is (a) listed on a
national securities exchange or authorized to be quoted on an inter-dealer
quotation system of a registered national securities association and (b) registered
under the Securities Exchange Act.

 

“Person” means an individual, entity or organization.

 

“Preferred Stock” means the Series A Participating
Cumulative Preferred Stock, par value $0.001 per share, of the Company, having
the terms set forth in the form of certificate of designation attached hereto
as Exhibit A.

 

“Purchase Price” means the price (subject to adjustment as
provided herein) at which a holder of a Right may purchase one one-thousandth
of a share of Preferred Stock (subject to adjustment as provided herein) upon
exercise of a Right, which price shall initially be $60.00.

 

“Securities Act” means the Securities Act of 1933, as amended,
unless otherwise expressly specified.

 

“Specified Percentage” means 20% or more.

 

“Stock Acquisition Date” means the date of the first public
announcement (including the filing of a report on Schedule 13D under the
Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such.

 

“Subsidiary” of any Person means any other Person of which
securities or other ownership interests having ordinary voting power, in the
absence of contingencies, to elect a majority of the board of directors or
other Persons performing similar functions are at the time directly or
indirectly owned by such first Person.

 

“Trading Day” means a day on which the principal national
securities exchange or over-the-counter market on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange or over-the-counter market, a Business Day.

 

(b) Each
of the following terms is defined in the Section set forth opposite such
term:

 

	
  Term

  	
   

  	
   

  	
   

  	
  Section

  	
   

  
	
  Adjustment Shares

  	
   

  	
  9

  
	
  Company

  	
   

  	
  Preamble

  

 

5

 

	
  Term

  	
   

  	
   

  	
   

  	
  Section

  	
   

  
	
  equivalent preferred stock

  	
   

  	
  9

  
	
  Exchange Ratio

  	
   

  	
  21

  
	
  Principal Party

  	
   

  	
  11

  
	
  Record Date

  	
   

  	
  Recitals

  
	
  Redemption Price

  	
   

  	
  20

  
	
  Right

  	
   

  	
  Recitals

  
	
  Rights Agent

  	
   

  	
  Preamble

  
	
  Right Certificate

  	
   

  	
  4

  
	
  Event

  	
   

  	
  9(a)(ii)

  
	
  Event

  	
   

  	
  11

  
	
  Substitution Period

  	
   

  	
  9

  

 

Section 2. Other Definitional and Interpretative Provisions. The
words “hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof. References to Articles, Sections and Exhibits are to Articles, Sections
and Exhibits of this Agreement unless otherwise specified. All Exhibits annexed
hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit but
not otherwise defined therein, shall have the meaning as defined in this
Agreement. Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words “include”, “includes”
or “including” are used in this Agreement, they shall be deemed to be followed
by the words “without limitation”, whether or not they are in fact followed by
those words or words of like import. “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form. References to any agreement or contract
are to that agreement or contract as amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof; provided that with respect to any
agreement or contract listed on any schedules hereto, all such amendments,
modifications or supplements must also be listed in the appropriate schedule.
References to any Person include the successors and permitted assigns of that
Person. References from or through any date mean, unless otherwise specified,
from and including or through and including, respectively.

 

Section 3. Issuance Of Rights And Right Certificates. (a) As
soon as practicable after the Record Date, the Company will send a summary of
the Rights substantially in the form of Exhibit B hereto, by first-class
mail, postage prepaid, to each record holder of the Common Stock as of the
close of business on the Record Date. Certificates for the Common Stock issued
after the Record Date but prior to the earlier of the Distribution Date and the
Expiration Date shall have printed or written on or otherwise affixed to them
the following legend:

 

6

 

This
certificate also evidences certain Rights as set forth in a Rights Agreement
between Aventine Renewable Energy Holdings, Inc. (the “Company”) and American Stock Transfer &
Trust Company, as Rights Agent, dated as of December 19, 2005, and as
amended from time to time (the “Rights
Agreement”), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of
the Company. The Company will mail to the holder of this certificate a copy of
the Rights Agreement without charge promptly after receipt of a written request
therefor. Under certain circumstances, as set forth in the Rights Agreement, such
Rights may be evidenced by separate certificates instead of by this certificate
and may be redeemed or exchanged or may expire. As set forth in the Rights Agreement, Rights issued or transferred to, or
held by, any Person who is, was or becomes an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, may be null and void.

 

(b) Prior to the
Distribution Date, (i) the Rights will be evidenced by the certificates
for the Common Stock and not by separate Right Certificates (as hereinafter
defined) and the registered holders of the Common Stock shall be deemed to be
the registered holders of the associated Rights, and (ii) the Rights will
be transferable only in connection with the transfer of the underlying shares
of Common Stock.

 

(c) From and after the
Distribution Date, the Rights will be evidenced solely by separate Right
Certificates and will be transferable only in connection with the transfer of
the Right Certificates pursuant to Section 5. As soon as practicable after
the Company has notified the Rights Agent of the occurrence of the Distribution
Date, the Rights Agent will send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Distribution Date (other than any Acquiring Person or any Affiliate or
Associate thereof), one or more Right Certificates evidencing one Right
(subject to adjustment as provided herein) for each share of Common Stock so
held. If an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 9, the Company shall, at the time of
distribution of the Right Certificates, make the necessary and appropriate
rounding adjustments in accordance with Section 12(a) so that Right
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights.

 

(d) Rights shall be
issued in respect of all shares of Common Stock outstanding as of the Record
Date or issued (on original issuance or out of treasury) after the Record Date
but prior to the earlier of the Distribution Date and the Expiration Date. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company (i) shall,
with respect to shares of Common Stock so issued or

 

7

 

sold (A) pursuant to the exercise of stock options
or under any employee plan or arrangement or (B) upon the exercise,
conversion or exchange of other securities issued by the Company prior to the
Distribution Date, and (ii) may, in any other case, if deemed appropriate
by the Board, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided that no such Right Certificate shall be issued if,
and to the extent that, (i) the Company is advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificate would be issued or (ii) appropriate
adjustment shall otherwise be made in lieu of the issuance thereof.

 

Section 4. Form of Right Certificates. (a) The
certificates evidencing the Rights (and the forms of assignment, election to
purchase and certificates to be printed on the reverse thereof) (the “Right Certificates”) shall be substantially
in the form of Exhibit C hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law, rule or regulation or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. The Right Certificates, whenever distributed, shall be dated
as of the Record Date.

 

(b) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company’s seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company whose
manual or facsimile signature is affixed to the Right Certificates ceases to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may, nevertheless,
be countersigned by the Rights Agent and issued and delivered with the same
force and effect as though the Person who signed such Right Certificates had
not ceased to be such officer of the Company. Any Right Certificate may be
signed on behalf of the Company by any Person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company
to sign such Right Certificate, although at the date of the execution of this
Rights Agreement any such Person was not such an officer.

 

(c) Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares of stock
issuable upon exercise of the Rights made in accordance with the provisions of
this Agreement.

 

8

 

Section 5. Registration; Transfer and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) Following
the Distribution Date, the Rights Agent shall keep or cause to be kept, at its
principal office or offices designated as the place for surrender of Right
Certificates upon exercise, transfer or exchange, books for registration and
transfer of the Right Certificates. Such books shall show with respect to each
Right Certificate the name and address of the registered holder thereof, the
number of Rights indicated on the certificate and the certificate number.

 

(b) At any time after
the Distribution Date and prior to the Expiration Date, any Right Certificate
or Certificates may, upon the terms and subject to the conditions set forth in
this Agreement, be transferred or exchanged for another Right Certificate or
Certificates evidencing a like number of Rights as the Right Certificate or
Certificates surrendered. Any registered holder desiring to transfer or
exchange any Right Certificate or Certificates shall surrender such Right
Certificate or Certificates (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly executed) to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate or Certificates until the registered holder of
the Rights has complied with the requirements of Section 6(f). Upon
satisfaction of the foregoing requirements, the Rights Agent shall, subject to
Sections 6(e), 6(f), 8(e), 12 and 21, countersign and deliver to the Person
entitled thereto a Right Certificate or Certificates as so requested. The
Company may require payment of a sum sufficient to cover any transfer tax or
other governmental charge that may be imposed in connection with any transfer
or exchange of any Right Certificate or Certificates.

 

(c) Upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
them, and, at the Company’s request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will issue and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.

 

Section 6. Exercise of Rights. (a) The
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein, including Sections 6(e), 6(f), 8(c) and
9(a)) in whole or in part at any time after the Distribution Date and prior to
the Expiration Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment (in lawful money of the
United States of America by

 

9

 

certified check or bank draft payable in immediately
available or next day funds to the order of the Company) of the aggregate
Purchase Price with respect to the Rights then to be exercised and an amount
equal to any applicable transfer tax or other governmental charge.

 

(b) Upon satisfaction
of the requirements of Section 6(a) and subject to Section 18(k),
the Rights Agent shall thereupon promptly (i) (A) requisition from
any transfer agent of the Preferred Stock (or make available, if the Rights
Agent is the transfer agent therefor) certificates for the total number of one
one-thousandths of a share of Preferred Stock to be purchased (and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests) or (B) if the Company shall have elected to deposit the shares
of Preferred Stock issuable upon exercise of the Rights with a depositary
agent, requisition from the depositary agent depositary receipts representing
interests in such number of one one-thousandths of a share of Preferred Stock
to be purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent and the Company will direct the depositary agent to comply
with such request), (ii) requisition from the Company the amount of cash,
if any, to be paid in lieu of issuance of fractional shares in accordance with Section 12
and (iii) after receipt of such certificates or depositary receipts and
cash, if any, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate (with such certificates or receipts
registered in such name or names as may be designated by such holder). If the
Company is obligated to deliver Common Stock or other securities or assets
pursuant to this Agreement, the Company will make all arrangements necessary so
that such securities and assets are available for delivery by the Rights Agent,
if and when appropriate.

 

(c) Each Person (other
than the Company) in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any transfer taxes or other governmental charges) was made; provided that if the date of such
surrender and payment is a date upon which the transfer books of the Company
relating to the Preferred Stock are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the applicable transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company except as provided
herein.

 

10

 

(d) In case the
registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing the number of
Rights remaining unexercised shall be issued by the Rights Agent and delivered
to, or upon the order of, the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder, subject
to the provisions of Section 12.

 

(e) Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Section 9(a)(ii) Event, any Rights Beneficially Owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate of an
Acquiring Person) who (A) becomes a transferee after a Section 9(a)(ii) Event,
(B) becomes a transferee prior to or concurrently with a Section 9(a)(ii) Event
and receives such Rights pursuant to either (1) a transfer (whether or not
for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or in any
such Associate or Affiliate) or to any Person with whom the Acquiring Person
(or any such Associate or Affiliate) has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (2) a transfer which
the Board determines in good faith is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this Section 6(e),
shall become null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under this Agreement or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 6(e) are complied with,
but shall have no liability to any holder of Right Certificates or other Person
as a result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates and Associates or any transferee of any of
them hereunder.

 

(f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to any
purported transfer pursuant to Section 5 or exercise pursuant to this Section 6
unless the registered holder of the applicable Rights (i) shall have
completed and signed the certificate contained in the form of assignment or election
to purchase, as the case may be, set forth on the reverse side of the Right
Certificate surrendered for such transfer or exercise, as the case may be, (ii) shall
not have indicated an affirmative response to clause 1 or 2 thereof and (iii) shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.

 

Section 7. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for exercise, transfer or
exchange shall, if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent in canceled form, or, if surrendered to the
Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Agreement. The
Company shall deliver to the Rights Agent for cancellation, and

 

11

 

the Rights Agent shall cancel, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.

 

Section 8. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available a number of authorized but not outstanding shares of Preferred Stock
sufficient to permit the exercise in full of all outstanding Rights as provided
in this Agreement.

 

(b) So long as the
Preferred Stock issuable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all securities
reserved for such issuance to be listed on any such exchange upon official
notice of issuance upon such exercise.

 

(c) The Company shall (i) file,
as soon as practicable following the earliest date after the occurrence of a Section 9(a)(ii) Event
and determination of the consideration to be delivered by the Company upon
exercise of the Rights in accordance with Section 9(a)(iii), or as soon as
is required by law following the Distribution Date, as the case may be, a
registration statement under the Securities Act with respect to the securities
issuable upon exercise of the Rights, (ii) to cause such registration
statement to become effective as soon as practicable after such filing and (iii) cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date; provided that
prior to the Initial Public Offering the Company shall not be obligated under
this Section 8(c) to file or cause to become effective or remain
effective any registration statement. The Company shall also take such action
as may be appropriate to ensure compliance with the securities or blue sky laws
of the various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed 90 days
after the date set forth in Section 8(c)(i), the exercisability of the
Rights in order to prepare and file such registration statement and permit it
to become effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement when the suspension is no longer in
effect. Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable for securities in any jurisdiction if the
requisite qualification in such jurisdiction has not been obtained, such
exercise is not permitted under applicable law or, if required under the
Securities Act, a registration statement in respect of such securities has not
been declared effective.

 

(d) The Company shall
take all such action as may be necessary to insure that all one one-thousandths
of a share of Preferred Stock issuable upon exercise of Rights shall, at the
time of delivery of the certificates for such

 

12

 

securities (subject to payment of the Purchase
Price), be duly authorized, validly issued, fully paid and nonassessable.

 

(e) The Company shall
pay when due and payable any and all federal and state transfer taxes and other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred Stock
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax or other governmental charge which may be payable in respect
of any transfer involved in the issuance or delivery of any Right Certificates
or any certificates for Preferred Stock to a Person other than the registered
holder of the applicable Right Certificate. Prior to any such issuance or
delivery of any Right Certificates or any certificates for Preferred Stock, any
such transfer tax or other governmental charge shall have been paid by the
holder of such Right Certificate or it shall have been established to the
Company’s satisfaction that no such tax or other governmental charge is due.

 

Section 9. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. (a) (i) If the Company at any
time after the date of this Agreement (A) pays a dividend on the Preferred
Stock in shares of Preferred Stock, (B) subdivides the outstanding
Preferred Stock into a greater number of shares, (C) combines the
outstanding Preferred Stock into a smaller number of shares or (D) issues
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger involving the Company), the Purchase Price in effect immediately prior
to the record date for such dividend or the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Preferred
Stock or other capital stock issuable on such date, shall be proportionately
adjusted so that each holder of a Right shall (except as otherwise provided
herein, including Section 6(e)) thereafter be entitled to receive, upon
exercise of such Right at the Purchase Price in effect immediately prior to
such date, the aggregate number and kind of shares of Preferred Stock or other
capital stock, as the case may be, which such holder would have been entitled
to receive upon such exercise and by virtue of such dividend, subdivision,
combination or reclassification as if such Right had been exercised immediately
prior to the record date for such dividend or the effective date of such
subdivision, combination or reclassification. If an event occurs which requires
an adjustment under both this Section 9(a)(i) and Section 9(a)(ii),
the adjustment provided for in this Section 9(a)(i) shall be made
prior to, and in addition to, any adjustment required pursuant to Section 9(a)(ii).

 

(ii) If any Person, alone or together with its Affiliates and
Associates, becomes, at any time after the date of this Agreement, an Acquiring
Person (a “Section 9(a)(ii) Event”),
then each holder of a Right shall (except as otherwise provided herein,
including Section 6(e)) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to the first
occurrence of a Section 9(a)(ii) Event, in lieu of Preferred Stock,
such number of duly authorized,

 

13

 

validly
issued, fully paid and nonassessable shares of Common Stock of the Company
(such shares being referred to herein as the “Adjustment
Shares”) equal to the result obtained by dividing

 

(x) the product obtained by multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 9(a)(ii) Event
by the number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first occurrence (such product
being from such time on the “Purchase Price” for each Right and for all
purposes of this Agreement) by

 

(y) 50% of the current market price per share of Common Stock
(determined pursuant to Section 9(d)(i)) on the date of such first
occurrence;

 

provided, however, that the
Purchase Price (as so adjusted pursuant to the foregoing clause (ii)(x)) and
the number of Adjustment Shares so receivable upon exercise of a Right shall be
subject to further adjustment as appropriate in accordance with Section 9(f).
From and after the occurrence of a Section 11 Event, any Rights that have
not theretofore been exercised pursuant to this Section 9(a)(ii) shall
thereafter be exercisable only in accordance with Section 11 and not
pursuant to this Section 9(a)(ii).

 

(iii) If the number of shares of Common Stock which are authorized
by the Company’s certificate of incorporation but not outstanding or reserved
for issuance other than upon exercise of the Rights is not sufficient to permit
the exercise in full of the Rights in accordance with Section 9(a)(ii),
the Company shall, with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the Purchase Price then
in effect, (A) (to the extent available) Common Stock, then (B) (to
the extent available) such number of one one-thousandths of a share of
Preferred Stock as are then equivalent in value to the value of the Adjustment
Shares and then (C) other equity or debt securities of the Company, cash
or other assets, a reduction in the Purchase Price or any combination of the
foregoing, having an aggregate value (as determined by the Board based upon the
advice of a nationally recognized investment banking firm) equal to the value
of the Adjustment Shares; provided
that (1) the Company may, and (2) if the Company shall not have made
adequate provision as required above to deliver value within 30 days following
the first occurrence of a Section 9(a)(ii) Event (the “Substitution Period”), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, (x) (to the extent available)
Common Stock, then (y) (to the extent available) one-thousandths of a share of
Preferred Stock and then, (z) other equity or debt securities of the

 

14

 

Company,
cash or other assets or any combination of the foregoing, having an aggregate
value (as determined by the Board based upon the advice of a nationally
recognized investment banking firm) equal to the excess of the value of the
Adjustment Shares over the Purchase Price. To the extent that the Company determines
that some action is to be taken pursuant to the preceding sentence, the Company
(A) shall provide, subject to Section 6(e), that such action shall
apply uniformly to all outstanding Rights and (B) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to decide the appropriate form and value of any consideration to be
delivered as referred to in such sentence. If any such suspension occurs, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this Section 9(a)(iii),
the value of the Common Stock shall be the current market price per share of
Common Stock (as determined pursuant to Section 9(d)(i)) on the date of
the first occurrence of a Section 9(a)(ii) Event; any common stock
equivalent shall be deemed to have the same value as the Common Stock on such
date; and the value of other securities or assets shall be determined pursuant
to Section 9(d)(iii).

 

(b) If the Company
fixes a record date for the issuance of rights, options or warrants to all
holders of Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within 45 calendar days after such record date) Preferred Stock
(or securities having the same rights, privileges and preferences as the shares
of Preferred Stock (“equivalent preferred
stock”)) or securities convertible into or exercisable for Preferred
Stock (or equivalent preferred stock) at a price per share of Preferred Stock
(or equivalent preferred stock) (in each case, taking account of any conversion
or exercise price) less than the current market price per share of Preferred
Stock (as determined pursuant to Section 9(d)(ii)), then on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such date by a fraction, the numerator of which shall be the sum of (i) the
number of shares of Preferred Stock outstanding on such record date plus (ii) the
number of shares of Preferred Stock which the aggregate price (taking account
of any conversion or exercise price) of the total number of shares of Preferred
Stock (and/or equivalent preferred stock) so to be offered would purchase at
such current market price and the denominator of which shall be the sum of (i) number
of shares of Preferred Stock outstanding on such record date plus (ii) the
number of additional shares of Preferred Stock (and/or equivalent preferred
stock) so to be offered. If such subscription price may be paid by delivery of
consideration part or all of which will be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. Shares of Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding for the

 

15

 

purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and if such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

 

(c) If the Company
fixes a record date for the making of a distribution to all holders of
Preferred Stock (including any such distribution in connection with a
consolidation or merger involving the Company) of evidences of indebtedness,
equity securities other than Preferred Stock, assets (other than a regular
periodic cash dividend out of the earnings or retained earnings of the Company)
or rights, options or warrants (excluding those referred to in Section 9(b)),
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the current market price
per share of Preferred Stock (as determined pursuant to Section 9(d)(iii))
on such record date, less the value (as determined pursuant to Section 9(d)(iii))
of such evidences of indebtedness, equity securities, assets, rights, options
or warrants so to be distributed with respect to one share of Preferred Stock
and the denominator of which shall be such current market price per share of
Preferred Stock. Such adjustment shall be made successively whenever such a
record date is fixed, and if such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.

 

(d) (i) For
purposes of computations hereunder other than computations made pursuant to
Sections 9(a)(iii) or 12, the “current market price” per share of Common
Stock on any date shall be the average of the daily closing prices per share of
such Common Stock at the close of the regular session of trading for the 30
Trading Days immediately prior to such date; for purposes of computations made
pursuant to Section 9(a)(iii), the “current market price” per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock at the close of the regular session of
trading for the 10 Trading Days immediately following such date; and for
purposes of computations made pursuant to Section 12, the “current market
price” per share of Common Stock for any Trading Day shall be the closing price
per share of Common Stock at the close of the regular session of trading for
such Trading Day; provided that
if the current market price per share of the Common Stock is determined during
a period that is in whole or in part following the announcement by the issuer
of such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities exercisable for or
convertible into shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock, and prior to
the ex-dividend date for such dividend or distribution or the record date for
such subdivision, combination or reclassification, then, and in each such case,
the “current market price” shall be properly adjusted to take into account
ex-dividend trading. The closing price for

 

16

 

each day shall be the last sale price, regular way,
at the close of the regular session of trading or, if no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system at the close of the regular session of trading with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such
other successor system then in use or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Stock selected by the Board (in each case prices which are not
identified as having been reported late to such system). If on any such date,
no market maker is making a market in the Common Stock or the Common Stock is
not publicly held or not so listed or traded, the “current market value” of
such shares on such date shall be as determined in good faith by the Board (or,
if at the time of such determination there is an Acquiring Person, by a
nationally recognized investment banking firm selected by the Board) which
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.

 

(ii) For the purpose of any computation hereunder, the “current
market price” per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in Section 9(d)(i) (other
than the last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in such manner, the “current market price”
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 1000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of Common Stock (as determined pursuant to Section 9(d)(i)).
For all purposes of this Agreement, the “current market price” of one
one-thousandth of a share of Preferred Stock shall be equal to the “current
market price” of one share of Preferred Stock divided by 1000.

 

(iii) For the purpose of any computation hereunder, the value of
any securities or assets other than Common Stock or Preferred Stock shall be
the fair value as determined in good faith by the Board, or, if at the time of
such determination there is an Acquiring Person, by a nationally recognized
investment banking firm selected by the Board, which

 

17

 

determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.

 

(e) Notwithstanding any
provision of this Agreement to the contrary, no adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided
that any adjustments which by reason of this Section 9(e) are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 9 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may be.

 

(f) If at any time, as
a result of an adjustment made pursuant to Sections 9(a)(ii) or 11(a), the
holder of any Right is entitled to receive upon exercise of such Right any
shares of capital stock other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Stock contained in Section 9, and the provisions of Sections
6, 8, 11 and 12 with respect to the Preferred Stock shall apply on like terms
to any such other shares.

 

(g) All Rights
originally issued by the Company subsequent to any adjustment made hereunder
shall evidence the right to purchase, at the Purchase Price then in effect, the
then applicable number of one one-thousandths of a share of Preferred Stock and
other capital stock issuable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

 

(h) Unless the Company
has exercised its election as provided in Section 9(i), upon each
adjustment of the Purchase Price as a result of the calculations made in Sections
9(b) and 9(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a share of
Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying
(x) the number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.

 

(i) The Company may
elect on or after the date of any adjustment of the Purchase Price to adjust
the number of Rights, in lieu of any adjustment in the number of one
one-thousandths of a share of Preferred Stock issuable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-thousandths of a share of
Preferred Stock for which such Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the

 

18

 

number of Rights shall become that number of Rights
(calculated to the nearest one hundred-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section 9(i),
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 12, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.

 

(j)  Irrespective of any adjustment or change in
the Purchase Price or the number of one one-thousandths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per one one-thousandth of a share and the number of shares which were expressed
in the initial Right Certificates issued hereunder.

 

(k)  Before taking any action that would cause an
adjustment reducing the Purchase Price below the par value, if any, of the
number of one one-thousandths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-thousandths of a share of Preferred Stock at such adjusted Purchase Price.

 

(l)  In any case in which this Section 9
shall require that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of one one-thousandths of a share of
Preferred Stock or other capital stock, if any, issuable upon such exercise
over and above the number of one one-thousandths of a share of Preferred Stock
or other capital stock, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment;

 

19

 

provided that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.

 

(m)  Anything in this Section 9 to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly required by
this Section 9, as and to the extent that it, in its sole discretion,
determines to be advisable so that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any Preferred Stock at less than
the current market price, issuance wholly for cash of any Preferred Stock or
securities which by their terms are convertible into or exercisable for
Preferred Stock, stock dividends or issuance of rights, options or warrants
referred to in this Section 9 hereafter made by the Company to the holders
of its Preferred Stock, shall not be taxable to such stockholders.

 

(n)  The Company shall not at any time after the
Distribution Date (i) consolidate, merge or otherwise combine with, or (ii) sell
or otherwise transfer (or permit any of its Subsidiaries to sell or otherwise
transfer), directly or indirectly in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries, taken as a whole, to, any
other Person or Persons if (x) at the time of or immediately after such
consolidation, merger, combination, sale or transfer there are any rights,
warrants or other instruments or securities outstanding or any agreements or
arrangements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger,
combination, sale or transfer, the stockholders of a Person who constitutes, or
would constitute, the “Principal Party” for the purposes of Section 11
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.

 

(o)  The Company agrees that after the
Distribution Date, it will not, except as permitted by Sections 20, 21 or 25,
take (or permit any Subsidiary to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.

 

(p)  Notwithstanding anything in this Agreement to
the contrary, if at any time after the date hereof and prior to the
Distribution Date the Company (i) pays a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivides
the outstanding Common Stock into a larger number of shares or (iii) combines
the outstanding Common Stock into a smaller number of shares, the number of
Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter as contemplated by Section 3, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event equals the product
obtained by multiplying the number of Rights associated with

 

20

 

each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total number of shares
of Common Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event.

 

Section 10. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 9 or
11, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock and the Common Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate
(or, if prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in the manner set forth in Section 24.
The Rights Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained.

 

Section 11. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. (a) If, following the occurrence of a Section 9(a)(ii) Event,
directly or indirectly,

 

(x) the Company consolidates with, merges into or otherwise combines
with, any Acquiring Person or any Affiliate or Associate of an Acquiring Person,
and the Company is not the continuing or surviving corporation of such
consolidation, merger or combination;

 

(y) any Acquiring Person or any Affiliate or Associate of an Acquiring
Person merges into, or otherwise combines with, the Company, and the Company is
the continuing or surviving corporation of such merger or combination and, in
connection with such merger or combination, all or part of the outstanding
shares of Common Stock is changed into or exchanged for other stock or
securities of the Company or of any Acquiring Person or any Affiliate or
Associate of an Acquiring Person, cash or any other property; or

 

(z) the Company and/or one or more of its Subsidiaries sells or
otherwise transfers, in one transaction or a series of related transactions, to
any Acquiring Person or any Affiliate or Associate of an Acquiring Person,
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries, taken as a whole,

 

(each of the above, a “Section 11 Event”) then, and in each such case, proper
provision shall promptly be made so that

 

(i) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect immediately
prior to the first occurrence of a Section 9(a)(ii) Event, such
number of duly

 

21

 

authorized,
validly issued, fully paid and nonassessable shares of freely tradeable Common
Stock of the Principal Party (as hereinafter defined), not subject to any rights
of call or first refusal, liens, encumbrances or other claims, as shall be
equal to the result obtained by dividing

 

(A) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section 9(a)(ii) Event
by the number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first occurrence (such product
being from such time on the “Purchase Price” for each Right and for all
purposes of this Agreement) by

 

(B) 50% of the current market price (determined pursuant to Section 9(d)(i))
per share of the Common Stock of such Principal Party on the date of
consummation of such consolidation, merger, combination, sale or transfer;

 

provided, however, that the
Purchase Price (as so adjusted pursuant to the foregoing clause (i)(A)) and the
number of shares of Common Stock of such Principal Party so receivable upon
exercise of a Right shall be subject to further adjustment as appropriate in
accordance with Section 9(f) to reflect any events occurring in
respect of the Common Stock of such Principal Party after the occurrence of
such consolidation, merger, sale or transfer;

 

(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement;

 

(iii) the term “Company”
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 9 shall apply only to
such Principal Party following the first occurrence of a Section 11 Event;
and

 

(iv) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its Common
Stock to permit exercise of all outstanding Rights in accordance with this Section 11(a))
in connection with the consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights.

 

(b) “Principal Party”
means

 

22

 

(i) in the case of any transaction described in Sections 11(a)(x)
or 11(a)(y), the Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger, consolidation or
combination, and if no securities are so issued, the Person that survives or
results from such merger, consolidation or combination; or

 

(ii) in the case of any transaction described in Section 11(a)(z),
the Person that is receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions;

 

provided that in any such case, (A) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, “Principal Party” shall refer to such other Person;
and (B) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are and have
been so registered, “Principal Party” shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market value.

 

(c) The Company shall
not consummate any such consolidation, merger, combination, sale or transfer
unless the Principal Party has a sufficient number of authorized shares of its
Common Stock which are not outstanding or otherwise reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 11
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in Sections 11(a) and 11(b) and providing
that, as soon as practicable after the date of any consolidation, merger,
combination, sale or transfer mentioned in Section 11(a), the Principal
Party shall (i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, and shall use its best efforts to cause such registration statement (A) to
become effective as soon as practicable after such filing and (B) to
remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date, and (ii) deliver to holders
of the Rights historical financial statements for the Principal Party which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.

 

Section 12. Fractional Rights and Fractional Shares. (a) The
Company is not required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 9(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
price of a whole Right. For purposes of this Section 12(a), the current
market price of a whole Right shall be the closing price of a

 

23

 

Right at the close of the regular session of trading
for the Trading Day immediately prior to the date on which such fractional
Rights would otherwise have been issuable. The closing price of a Right for any
day shall be determined in the manner set forth for the Common Stock in Section 9(d)(i).

 

(b) The Company is not
required to issue fractions of shares of Preferred Stock (other than fractions
which are multiples of one one–thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are multiples of one
one-thousandth of a share of Preferred Stock). In lieu of any such fractional
shares of Preferred Stock, the Company shall pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market price of one
one-thousandth of a share of Preferred Stock. For purposes of this Section 12(b),
the current market price of one one-thousandth of a share of Preferred Stock
shall be one one-thousandth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 9(d)) for the Trading Day immediately
prior to the date of such exercise.

 

(c) Following the
occurrence of any Section 9(a)(ii) Event or Section 11 Event or
upon any exchange pursuant to Section 21, the Company shall not be
required to issue fractions of shares of Common Stock upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company shall pay to
the registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the same
fraction of the current market price of a share of Common Stock. For purposes
of this Section 12(c), the current market price of a share of Common Stock
shall be the closing price of a share of Common Stock (as determined pursuant
to Section 9(d)) for the Trading Day immediately prior to the date of such
exercise or exchange.

 

(d) Each holder of a
Right, by his acceptance of the Right, expressly waives his right to receive
any fractional Rights or any fractional shares upon exercise of a Right except
as permitted by this Section 12.

 

Section 13. Rights of Action. All rights of action
in respect of this Agreement are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of certificates representing Common Stock); and any such holder,
without the consent of any other such holder or the Rights Agent, may, in his
own behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the

 

24

 

obligations under, and injunctive relief against
actual or threatened violations of the obligations of, any Person subject to
this Agreement.

 

Section 14. Agreement of Right Holders. Each holder
of a Right, by his acceptance of the Right, consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that:

 

(a) prior to the Distribution Date, the Rights will be evidenced
by and transferable only in connection with the transfer of Common Stock;

 

(b) after the Distribution Date, the Rights will be evidenced by
Right Certificates and transferable only on the registry books of the Rights
Agent pursuant to Section 5;

 

(c) subject to Sections 5 and 6, the Company and the Rights Agent
may deem and treat the Person in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing shares of Common Stock) is
registered as the absolute owner of such certificate and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the certificate representing shares of Common Stock made
by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 6(e), shall be affected by any notice to the contrary;
and

 

(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided
that the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.

 

Section 15. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of capital
stock which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company (including any right to
vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, to give or withhold consent to any corporate action, to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 22),

 

25

 

or to receive dividends or subscription rights, or
otherwise) until the Right or Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof.

 

Section 16. Appointment of Rights Agent. (a) The
Company hereby appoints the Rights Agent to act as agent for the Company and
the holders of the Rights in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company may from time
to time appoint such co-rights agents as it may deem necessary or desirable. If
the Company appoints one or more co-rights agents, the respective duties of the
Rights Agent and any co-rights agents shall be as the Company shall determine.

 

(b) The Company shall
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the execution or administration of this Agreement and the exercise and
performance of its duties hereunder. The Company also shall indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability.

 

Section 17. Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into or with which the Rights
Agent or any successor Rights Agent may be merged, consolidated or combined,
any corporation resulting from any merger, consolidation or combination to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any party hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 19.
If at the time such successor Rights Agent succeeds to the agency created by
this Agreement any of the Right Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and if at that time any of the Right Certificates have not been countersigned,
any successor Rights Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

 

(b) If at any time the
name of the Rights Agent shall be changed and at such time any of the Right
Certificates have been countersigned but not delivered,

 

26

 

the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and if at
that time any of the Right Certificates have not been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.

 

Section 18. Duties of the Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:

 

(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.

 

(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary that any fact or matter (including the
identity of any “Acquiring Person” and the determination of “current market
price”) be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the President or any Vice President or the Secretary, of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.

 

(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.

 

(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

 

(e) The Rights Agent shall not be responsible (i) in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof), (ii) for
any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate, (iii) for any change in the
exercisability of the Rights (including the Rights becoming void pursuant

 

27

 

to
Section 6(e)) or (iv) any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided herein or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment). The Rights Agent shall not by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or other securities
to be issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Preferred Stock or other securities will, when issued, be
duly authorized, validly issued, fully paid and nonassessable.

 

(f) The Company agrees that it will perform, execute, acknowledge
and deliver, or cause to be performed, executed, acknowledged and delivered,
all such acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.

 

(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President or the Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such officer.

 

(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other
Person.

 

(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or to any holders of Rights
resulting from any such act, default, neglect or misconduct; provided that reasonable care was
exercised in the selection and continued employment thereof.

 

(j)  No provision
of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its

 

28

 

rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.

 

(k)  If, with
respect to any Right Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of assignment or form of
election to purchase, as the cases may be, has either not been completed or
indicates an affirmative response to clause 1 or 2 thereof, the Rights Agent
shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.

 

(l)  The Rights
Agent shall be protected and shall incur no liability for or in respect of any
action taken, suffered or omitted by it in connection with the administration
of this Agreement or the exercise or performance of its duties hereunder in
reliance upon any Right Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement or other paper or document reasonably believed
by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper Person or Persons.

 

Section 19. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days’ notice to the Company and to each transfer
agent of the Common Stock and Preferred Stock, and, after the Distribution
Date, to the holders of the Right Certificates. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days’ notice to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock and Preferred Stock by registered or certified mail, and,
after the Distribution Date, to the holders of the Right Certificates. If the
Rights Agent resigns or is removed or otherwise becomes incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company fails
to make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate
for inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized, in good standing and doing business under the laws of the United
States or of any state of the United States, having a principal office in the
State of New York, authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000 or (b) an Affiliate
of a corporation described

 

29

 

in Section 19(a). After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof with the predecessor Rights
Agent and each transfer agent of the Common Stock and the Preferred Stock, and,
subsequent to the Distribution Date, mail a notice thereof to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 19, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.

 

Section 20. Redemption. (a) At any time prior
to the occurrence of a Section 9(a)(ii) Event, the Board may, at its
option, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”).
The redemption of the Rights may be made effective at such time, on such basis
and with such conditions as the Board in its sole discretion may establish. The
Redemption Price shall be payable, at the option of the Company, in cash,
shares of Common Stock, or such other form of consideration as the Board shall
determine.

 

(b) Immediately upon
the action of the Board electing to redeem the Rights (or at such later time as
the Board may establish for the effectiveness of such redemption) and without
any further action and without any notice, the right to exercise the Rights
will terminate and thereafter the only right of the holders of Rights shall be
to receive the Redemption Price for each Right so held. The Company shall
promptly thereafter give notice of such redemption to the Rights Agent and the
holders of the Rights in the manner set forth in Section 24; provided that the failure to give, or any
defect in, such notice shall not affect the validity of such redemption. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made.

 

Section 21. Exchange. (a) At any time after the
occurrence of a Section 9(a)(ii) Event, the Board may, at its option,
exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to Section 6(e))
for shares of Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the “Exchange
Ratio”). The exchange of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board in
its sole discretion

 

30

 

may establish. Notwithstanding the foregoing, (i) the
Board shall not be empowered to effect such exchange at any time after an
Acquiring Person, together with all Affiliates and Associates of such Acquiring
Person, becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding and (ii) from and after the occurrence of a Section 11
Event, any Rights that theretofore have not been exchanged pursuant to this Section 21(a) shall
thereafter be exercisable only in accordance with Section 11 and may not
be exchanged pursuant to this Section 21(a).

 

(b) Immediately upon
the effectiveness of the action of the Board to exchange any Rights pursuant to
Section 21(a) (or at such later time as the Board may establish) and
without any further action and without any notice, the right to exercise such
Rights will terminate and thereafter the only right of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly thereafter give notice of such exchange to the Rights
Agent and the holders of the Rights to be exchanged in the manner set forth in Section 24;
provided that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Rights for shares of
Common Stock will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to Section 6(e)) held by each holder of Rights.

 

(c) The Company may at
its option substitute, and, if there shall not be sufficient shares of Common
Stock authorized but not outstanding to permit the exchange of Rights for
Common Stock in accordance with Section 21(a), shall substitute to the
extent of such insufficiency, for each share of Common Stock that would otherwise
be issuable upon exchange of a Right, a number of one one-thousandths of a
share of Preferred Stock such that the current market price (determined
pursuant to Section 9(d)) of such number of one one-thousandths of a share
of Preferred Stock is equal to the current market price (determined pursuant to
Section 9(d)) of one share of Common Stock as of the date of such
exchange.

 

Section 22. Notice of Proposed Actions. (a) If
the Company proposes, at any time after the Distribution Date, (i) to pay
any dividend payable in stock of any class or to make any other distribution
(other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company) to the holders of Preferred Stock, (ii) to offer
to the holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision or combination of outstanding shares of
Preferred Stock), (iv) to effect, or permit any of its Subsidiaries to
effect, any consolidation, merger or

 

31

 

combination with any other Person, or to effect any
sale or other transfer, in one transaction or a series of related transactions,
of assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries, taken as a whole, or (v) to
effect the liquidation, dissolution or winding-up of the Company, then, in each
such case, the Company shall give to each holder of a Right, a notice of such
proposed action specifying the record date for the purposes of any such
dividend, distribution or offering of rights or warrants, or the date on which
any such reclassification, consolidation, merger, combination, sale, transfer,
liquidation, dissolution or winding-up is to take place and the date of
participation therein by the holders of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered
by Sections 22(a)(i) or 22(a)(ii) above at least 20 days prior to the
record date for determining holders of the Preferred Stock entitled to participate
in such dividend, distribution or offering, and in the case of any such other
action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Preferred Stock,
whichever shall be earlier. The failure to give notice required by this Section or
any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.

 

(b) If a Section 9(a)(ii) Event
or Section 11 Event occurs, then, in any such case, (i) the Company
shall as soon as practicable thereafter give to each holder of a Right, in
accordance with Section 24, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Sections 9(a)(ii) or 11, as the case may be, and (ii) all
references in Section 22(a) to Preferred Stock shall be deemed
thereafter to refer to Common Stock or other capital stock, as the case may be.

 

Section 23. Independent Director Evaluation. It is
understood that the Independent Directors Committee (as described below) of the
Board shall review and evaluate this Rights Agreement in order to consider
whether the maintenance of this Rights Agreement continues to be in the interests
of the Company, its stockholders and any other relevant constituencies of the
Company, at least once every three years. Following each such review, the
Independent Directors Committee will communicate its conclusions to the full
Board, including any recommendation in light thereof as to whether this Rights
Agreement should be modified or the rights should be redeemed. The Independent
Directors Committee shall, subject to the final proviso of this sentence, be
comprised of all of the directors of the Company who are independent of the
management of the Company and free from any relationship that, in the opinion
of the Board, would interfere with the exercise of independent judgment as a
member of the Independent Director Committee; provided,
however, that any director who is an officer or employee of the Company or its
Subsidiaries shall not qualify for membership in the Independent Director
Committee; provided further,
however, that a director who was formerly an officer of the Company or any of
its Subsidiaries may qualify for membership even though he or she may be
receiving

 

32

 

pension or deferred compensation payments from the
Company if, in the opinion of the Board, such person will exercise independent judgment
and will materially assist the function of the Independent Director Committee.

 

Section 24. Notices. Except as set forth below, all
notices, requests and other communications to any party hereunder and to the
holder of any Right shall be in writing unless otherwise expressly specified
herein. Notices or demands authorized by this Agreement to be given or made to
or on the Company or (subject to Section 19) the Rights Agent shall be
sufficiently given or made if sent by registered or certified mail (postage
prepaid) to the addresses set forth below (or such other address as such party
specifies in writing to the other party):

 

if to the Company, to:

 

Aventine Renewable Energy
Holdings, Inc. 

1300 South Second Street

Pekin, IL 61554

Attention: President

Fax: (309) 346-0742

 

if to the Rights Agent, to:

 

American Stock Transfer &
Trust Company 

59 Maiden Lane New York, NY
10038

Attention: Corporate Trust
Department

Facsimile Number: 718-236-4588

 

Except as otherwise
expressly set forth in this Agreement, notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent to the holder
of any Right Certificate any certificate representing shares of Common Stock is
sufficiently given or made if sent by first-class mail (postage prepaid) to
each record holder of such Certificate at the address of such holder shown on
the registry books of the Company. Notwithstanding anything in this Agreement
to the contrary, prior to the Distribution Date a public filing by the Company
with the Securities and Exchange Commission shall constitute sufficient notice
to the holders of securities of the Company, including the Rights, for purposes
of this Agreement and no other notice need be given to such holders.

 

Section 25. Supplements and Amendments. At any time
prior to the occurrence of a Section 9(a)(ii) Event, the Company may,
and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of certificates representing shares of Common Stock; provided that no supplement or amendment that adversely
affects an Exempt Person under this Agreement shall be effective without such
Person’s consent. At any time after the occurrence of a Section 9(a)(ii) Event,
the Company may, and the Rights Agent shall if the

 

33

 

Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights; provided, however, that no such supplement
or amendment may (a) adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), (b) cause this Agreement again to become amendable
other than in accordance with this sentence or (c) cause the Rights again
to become redeemable. Upon the delivery of a certificate from the Chairman of
the Board, the President, any Vice President and the Secretary of the Company
stating that the proposed supplement or amendment is in compliance with the
terms of this Agreement, the Rights Agent shall execute such supplement or
amendment.

 

Section 26. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.

 

Section 27. Determinations and Actions by the Board, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act
as in effect on the date of this Agreement. The Board shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including the
right and power to (i) interpret the provisions of this Agreement and (ii) make
all determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or exchange or not to redeem or
exchange the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by
the Board in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board to any liability to the holders of the Rights.

 

Section 28. Benefits of This Agreement. Nothing in
this Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the certificates representing the shares of
Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the certificates
representing the shares of Common Stock).

 

Section 29. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions,

 

34

 

covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.

 

Section 30. Governing Law. This Agreement, each
Right and each Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes
shall be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State,
except that the rights and obligations of the Rights Agent shall be governed by
the law of the State of New York.

 

Section 31. Counterparts. This Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof
signed by all of the other parties hereto. Until and unless each party has
received a counterpart hereof signed by the other party hereto, this Agreement
shall have no effect and no party shall have any right or obligation hereunder
(whether by virtue of any other oral or written agreement or other
communication).

 

35

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.

 

 

	
   

  	
  AVENTINE RENEWABLE ENERGY

  
	
   

  	
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN STOCK TRANSFER &

  
	
   

  	
  TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT A

 

FORM OF

CERTIFICATE OF DESIGNATION

OF

SERIES A PARTICIPATING CUMULATIVE

PREFERRED STOCK

OF

AVENTINE RENEWABLE ENERGY HOLDINGS, INC.

 

Pursuant to Section 151
of the

General Corporation Law of the

State of Delaware

 

I,                                ,
[Title], of Aventine Renewable Energy Holdings, Inc., a corporation
organized and existing under the General Corporation Law of the State of
Delaware (“Delaware Law”), in
accordance with the provisions thereof, HEREBY CERTIFY that pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Corporation, the Board of Directors on December 12,
2005, adopted the following resolution creating a series of Preferred Stock in
the amount and having the designation, voting powers, preferences and relative,
participating, optional and other special rights and qualifications,
limitations and restrictions thereof as follows:

 

Section 1. Designation and Number of Shares. The
shares of such series shall be designated as “Series A Participating
Cumulative Preferred Stock” (the “Series A
Preferred Stock”), and the number of shares constituting such series
shall be 100,000. Such number of shares of the Series A Preferred Stock
may be increased or decreased by resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares issuable upon
exercise or conversion of outstanding rights, options or other securities
issued by the Corporation.

 

Section 2. Dividends and Distributions. (a) The
holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable on March 31,
June 30, September 30 and December 31 of each year (each such
date being referred to herein as a “Quarterly
Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after the first issuance of any share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (i) $1.00 and

 

 

(ii) subject to the provision for adjustment
hereinafter set forth, 1000 times the aggregate per share amount of all cash
dividends or other distributions and 1000 times the aggregate per share amount
of all non-cash dividends or other distributions (other than (A) a
dividend payable in shares of Common Stock, par value $ 0.001 per share, of the
Corporation (the “Common Stock”)
or (B) a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise)), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. If the Corporation, at
any time after December 19, 2005 (the “Rights
Declaration Date”), pays any dividend on Common Stock payable in
shares of Common Stock or effects a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under Section 2(a)(ii) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

 

(b) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in Section 2(a) above
immediately after it declares a dividend or distribution on the Common Stock
(other than as described in Sections 2(a)(ii)(A) and 2(a)(ii)(B) above);
provided that if no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date (or, with respect to the first Quarterly Dividend Payment
Date, the period between the first issuance of any share or fraction of a share
of Series A Preferred Stock and such first Quarterly Dividend Payment
Date), a dividend of $1.00 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 

(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such shares of Series A
Preferred Stock, unless the date of issuance of such shares is on or before the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue and be cumulative from the date
of issue of such shares, or unless the date of issue is a date after the record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and on or before such Quarterly
Dividend Payment Date, in which case dividends shall begin to accrue and be
cumulative from such Quarterly

 

A-2

 

Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall not be more than 60 days prior to the date fixed for the payment
thereof.

 

Section 3. Voting Rights. In addition to any other
voting rights required by law, the holders of shares of Series A Preferred
Stock shall have the following voting rights:

 

(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
1000 votes on all matters submitted to a vote of stockholders of the
Corporation. If the Corporation shall at any time after the Rights Declaration
Date pay any dividend on Common Stock payable in shares of Common Stock or
effect a subdivision or combination of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

 

(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as a single class on all matters submitted to a vote
of stockholders of the Corporation.

 

(c) (i) If at any time dividends on any Series A
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a “default period”)
which shall extend until such time when all accrued and unpaid dividends for
all previous quarterly dividend periods and for the current quarterly dividend
period on all shares of Series A Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock and any other series of Preferred Stock
then entitled as a class to elect directors, voting together as a single class,
irrespective of series, shall have the right to elect two Directors.

 

A-3

 

(ii) During any default period, such voting right of the holders
of Series A Preferred Stock may be exercised initially at a special
meeting called pursuant to Section 3(c)(iii) hereof or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders; provided that neither such voting right
nor the right of the holders of any other series of Preferred Stock, if any, to
increase, in certain cases, the authorized number of Directors shall be
exercised unless the holders of 10% in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of a quorum of
holders of Common Stock shall not affect the exercise by holders of Preferred
Stock of such voting right. At any meeting at which holders of Preferred Stock
shall initially exercise such voting right, they shall have the right, voting
as a class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors or, if such right is exercised
at an annual meeting, to elect two Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of the Preferred Stock shall have the right to make such increase in
the number of Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A
Preferred Stock.

 

(iii) Unless the holders of Preferred Stock shall have previously
exercised their right to elect Directors during an existing default period, the
Board of Directors may order, or any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of shares of Preferred Stock
outstanding, irrespective of series, may request, the calling of a special
meeting of holders of Preferred Stock, which meeting shall thereupon be called
by the President, a Vice President or the Secretary of the Corporation. Notice
of such meeting and of any annual meeting at which holders of Preferred Stock
are entitled to vote pursuant to this Section 3(c)(iii) shall be
given to each holder of record of Preferred Stock by mailing such notice to him
at the address of such holder shown on the registry books of the Corporation.
Such meeting shall be called for a time not earlier than 20 days and not later
than 60 days after such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting may be called
on similar

 

A-4

 

notice
by any stockholder or stockholders owning in the aggregate not less than 10% of
the total number of shares of Preferred Stock outstanding, irrespective of
series. Notwithstanding the provisions of this Section 3(c)(iii), no such
special meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of stockholders.

 

(iv)  In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two Directors voting as a
class, after the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided
in Section 3(c)(ii) hereof) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this Section 3(c) to Directors elected by the holders of a particular
class of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.

 

(v)  Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the certificate of incorporation or bylaws
irrespective of any increase made pursuant to the provisions of Section 3(c)(ii) (such
number being subject, however, to change thereafter in any manner provided by
law or in the certificate of incorporation or bylaws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.

 

(d) The Certificate of Incorporation of the Corporation shall not
be amended in any manner (whether by merger or otherwise) so as to adversely
affect the powers, preferences or special rights of the Series A Preferred
Stock without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting separately as a
class.

 

A-5

 

(e) Except as otherwise provided herein, holders of Series A
Preferred Stock shall have no special voting rights, and their consent shall
not be required for taking any corporate action.

 

Section 4. Certain Restrictions. (a) Whenever
quarterly dividends or other dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on outstanding shares of Series A Preferred Stock shall have
been paid in full, the Corporation shall not:

 

(i) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding-up) to the Series A Preferred Stock;

 

(ii) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding-up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
other parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;

 

(iii) redeem, purchase or otherwise acquire for value any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding-up) to the Series A Preferred Stock; provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of stock of the Corporation ranking junior (as to dividends
and upon dissolution, liquidation or winding-up) to the Series A Preferred
Stock; or

 

(iv) redeem, purchase or otherwise acquire for value any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding-up) with
the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of Series A Preferred Stock and all such other parity stock
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.

 

(b) The Corporation
shall not permit any subsidiary of the Corporation to purchase or otherwise
acquire for value any shares of stock

 

A-6

 

of
the Corporation unless the Corporation could, under paragraph 4(a), purchase or
otherwise acquire such shares at such time and in such manner.

 

Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock redeemed, purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock without designation as to
series and may be reissued as part of a new series of Preferred Stock to be
created by the Board of Directors as permitted by the Certificate of
Incorporation or as otherwise permitted under Delaware Law.

 

Section 6. Liquidation, Dissolution and Winding-up.
Upon any liquidation, dissolution or winding-up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding-up)
to the Series A Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received $1.00 per share,
plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment; provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1000
times the aggregate amount to be distributed per share to holders of Common
Stock, or (b) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding-up) with the Series A
Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such other parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding-up. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso in clause (a) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.

 

Section 7. Consolidation, Merger, etc. If the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash or any other property, then in any such
case the shares of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1000 times the
aggregate amount of stock, securities, cash or any other property, as the

 

A-7

 

case may be, into which or for which each share of
Common Stock is changed or exchanged. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

 

Section 8. No Redemption. The Series A Preferred
Stock shall not be redeemable.

 

Section 9. Rank. The Series A Preferred Stock
shall rank junior (as to dividends and upon liquidation, dissolution and
winding-up) to all other series of the Corporation’s preferred stock except any
series that specifically provides that such series shall rank junior to the Series A
Preferred Stock.

 

Section 10. Fractional Shares. Series A Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holder’s fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock.

 

A-8

 

IN WITNESS WHEREOF, we have
executed and subscribed this Certificate this      day
of                     ,
2005.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Attest:

 

 

	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

 

EXHIBIT B

 

AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED OR TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS
OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID.

 

SUMMARY OF
TERMS

 

AVENTINE
RENEWABLE ENERGY HOLDINGS, INC.

 

STOCKHOLDER
RIGHTS PLAN

 

	
  Form of Security

  	
   

  	
  The Board of Directors has declared a dividend of one preferred stock
  purchase right for each outstanding share of the Company’s Common Stock,
  payable to holders of record as of the close of business on December 19,
  2005 (each a “Right” and
  collectively, the “Rights”).

  

 

 

	
  Issuance of Right Certificates;

  Transfer

  	
   

  	
  Prior to the Distribution Date(1), (i) the Rights
  will be evidenced by the certificates for the common stock, par value $ 0.001
  per share (“Common Stock”) of
  the Company and not separate certificates evidencing the Rights (a “Right Certificate”), and the registered
  holders of the Common Stock shall be deemed to be the registered holders of
  the associated Rights; and (ii) the Rights will be transferable only in
  connection with the transfer of the underlying shares of Common Stock.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  After the Distribution Date, the Rights Agent will mail separate
  Right Certificates to each record holder of the Common Stock as of the close
  of business on the Distribution Date, and thereafter the Rights will be
  transferable separately from the Common Stock.

  
	
   

  	
   

  	
   

  
	
  Exercise

  	
   

  	
  Prior to the Distribution Date, the Rights are not
  exercisable.

  

  After the Distribution Date,
  but prior to the occurrence of an event described below under “Flip-In” or
  “Flip-Over”, each Right shall be exercisable to purchase, for $60.00, subject
  to adjustment (the “Purchase Price”),
  one one-thousandth of a share of Series A Participating Cumulative
  Preferred Stock, par value $ 0.001 per share, of the Company.

  

 

(1) Distribution Date generally means the earlier
of:

 

(1)          the 10th day after public announcement that any person or group has
become an Acquiring Person (as defined below), and

 

(2)          the 10th business day after the date of the commencement of a tender or
exchange offer by any person which would, if consummated, result in such person
becoming an Acquiring Person.

 

B-2

 

	
  Acquiring Person

  	
   

  	
  Subject to certain exceptions, an “Acquiring
  Person” is any person or group who becomes the beneficial owner of
  20% or more of the Common Stock. The exceptions include: (i) the Company
  or any Subsidiary of the Company, (ii) the Company’s employee benefit
  plans, (iii) Aventine Renewable Energy Holdings, LLC and certain related
  persons, (iv) any person that the Company’s Board of Directors
  determines exceeded the threshold inadvertently and then promptly divests the
  excess shares and (v) any person who becomes an Acquiring Person because
  the Company repurchases outstanding shares of Common Stock unless such person
  acquires additional shares of Common Stock.

  
	
   

  	
   

  	
   

  
	
  Flip-In

  	
   

  	
  If any person or group becomes an Acquiring Person, then each Right
  (other than Rights beneficially owned by the Acquiring Person and certain
  affiliated persons) will entitle the holder to purchase, for the Purchase
  Price, a number of shares of the Company’s Common Stock having a market value
  of twice the Purchase Price.

  
	
   

  	
   

  	
   

  
	
  Flip-Over

  	
   

  	
  If, after any person or group becomes an Acquiring Person,
  (1) the Company is involved in a merger or other business combination in
  which the Company is not the surviving corporation or its Common Stock is
  exchanged for other securities or assets or (2) the Company and/or one
  or more of its subsidiaries sell or otherwise transfer assets or earning
  power aggregating more than 50% of the assets or earning power of the Company
  and its subsidiaries, taken as a whole, then each Right will entitle the
  holder to purchase, for the Purchase Price, a number of shares of common
  stock of the other party to such business combination or sale (or in certain
  circumstances, an affiliate) having a market value of twice the Purchase
  Price.

  

 

B-3

 

	
  Exchange

  	
   

  	
  At any time after any person becomes an Acquiring Person (but before
  any person becomes the beneficial owner of 50% or more of the Company’s
  Common Stock or the occurrence of a merger, combination, sale or transfer
  described in “Flip-Over” above), the Board of Directors may exchange all or
  part of the Rights (other than the Rights beneficially owned by the Acquiring
  Person and certain affiliated persons) for shares of Common Stock at an
  exchange ratio of one share of Common Stock per Right.

  
	
   

  	
   

  	
   

  
	
  Redemption

  	
   

  	
  The Board of Directors may redeem all of the Rights at a price of
  $.001 per Right at any time prior to the time that any person becomes an
  Acquiring Person.

  
	
   

  	
   

  	
   

  
	
  Expiration

  	
   

  	
  The Rights will expire on November 30, 2015, unless earlier
  exchanged or redeemed.

  
	
   

  	
   

  	
   

  
	
  Amendments

  	
   

  	
  Prior to any person becoming an Acquiring Person,
  the Rights Agreement may be amended in any respect.

  

  After any person has become an
  Acquiring Person, the Rights Agreement may not be amended in any respect that
  would adversely affect the Rights holders (other than any Acquiring Person
  and certain affiliated persons) or cause the Rights again to become
  redeemable.

  
	
   

  	
   

  	
   

  
	
  Voting Rights

  	
   

  	
  Rights holders have no stockholder rights, including no right to vote
  or to receive dividends.

  
	
   

  	
   

  	
   

  
	
  Antidilution Provisions

  	
   

  	
  The Rights Agreement includes standard antidilution provisions
  designed to protect the efficacy of the Rights.

  
	
   

  	
   

  	
   

  
	
  Taxes

  	
   

  	
  While the dividend of the Rights will not be taxable to stockholders
  or to the Company, stockholders or the Company may, depending upon the
  circumstances, recognize taxable income in the event that the Rights become
  exercisable.

  

 

B-4

 

A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, as amended from
time to time, the complete terms of which are hereby incorporated by reference.

 

B-5

 

EXHIBIT C

 

FORM OF
RIGHT CERTIFICATE

 

	
  No. R -

  	
  [Number of] Rights

  

 

NOT EXERCISABLE AFTER THE EARLIER OF NOVEMBER 30,
2015 AND THE DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR
EXCHANGED BY THE COMPANY AS SET FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN
THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID.

 

RIGHT CERTIFICATE

 

AVENTINE RENEWABLE ENERGY
HOLDINGS, INC.

 

This Right Certificate
certifies that                                           ,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the holder (upon the terms and subject to
the conditions set forth in the Rights Agreement dated as of December 19,
2005 (the “Rights Agreement”)
between Aventine Renewable Energy Holdings, Inc., a Delaware corporation
(the “Company”), and American
Stock Transfer & Trust Company (the “Rights
Agent”)) to purchase from the Company, at any time after the
Distribution Date and prior to the Expiration Date, one-thousandths of a fully
paid, nonassessable share of Series A Participating Cumulative Preferred
Stock (the “Preferred Stock”) of
the Company at a purchase price of $60.00 per one one-thousandth of a share
(the “Purchase Price”), payable in
lawful money of the United States of America, upon surrender of this Right
Certificate, with the form of election to purchase and related certificate duly
executed, and payment of the Purchase Price at an office of the Rights Agent
designated for such purpose.

 

Terms used herein and not
otherwise defined herein shall have the meanings given to them in the Rights
Agreement.

 

The number of Rights
evidenced by this Right Certificate (and the number and kind of shares issuable
upon exercise of each Right) and the Purchase Price set forth above are as of December 19,
2005, and may have been or in the future be adjusted as a result of the
occurrence of certain events, as more fully provided in the Rights Agreement.

 

Upon the first occurrence of
a Section 9(a)(ii) Event, if the Rights evidenced by this Right
Certificate are beneficially owned by (a) an Acquiring

 

C-1

 

Person or an Associate or Affiliate of such
Acquiring Person, (b) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who (i) becomes a transferee after a Section 9(a)(ii) Event,
(ii) becomes a transferee prior to or concurrently with a Section 9(a)(ii) Event
and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or in any
Associate or Affiliate) or to any Person with whom the Acquiring Person (or any
such Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which is
part of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of these transfer restrictions, such Rights shall become
null and void without any further action, and no holder hereof shall have any
rights whatsoever with respect to such Rights.

 

This Right Certificate is
subject to all of the terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates, which limitations of rights include
the temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement.

 

At any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth below
in the Rights Agreement, be transferred or exchanged for another Right
Certificate or Certificates evidencing a like number of Rights as the Right
Certificate or Certificates surrendered. Any registered holder desiring to
transfer or exchange any Right Certificate or Certificates shall surrender such
Right Certificate or Certificates (with, in the case of a transfer, the form of
assignment and certificate on the reverse side thereof duly executed) to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such purpose.

 

Subject to the provisions of
the Rights Agreement, the Board of Directors of the Company may, at its option,

 

(a) at any time prior to the occurrence of a Section 9(a)(ii) Event
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.001 per Right as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of the Rights Agreement; or

 

(b) at any time after the occurrence of a Section 9(a)(ii) Event
exchange all or part of the then outstanding Rights (which shall not include
Rights that have become void pursuant to Section 6(e)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per

 

C-2

 

Right
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of the Rights Agreement. If the Rights
shall be exchanged in part, the holder of this Right Certificate shall be
entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exchanged.

 

The Company shall not be
required to issue fractions of shares of Preferred Stock (other than fractions
which are multiples of one one-thousandth of a share of Preferred Stock) upon
the exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are multiples
of one one-thousandth of a share of Preferred Stock). In lieu of any such
fractional shares of Preferred Stock, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised an amount
in cash equal to the same fraction of the current market price of one
one-thousandth of a share of Preferred Stock. If this Right Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Certificates for the number of whole Rights
not exercised.

 

No holder of this Right
Certificate shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of the shares of capital stock which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company (including any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), to receive dividends or subscription rights,
or otherwise) until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Rights Agreement.

 

This Right Certificate shall
not be valid or obligatory for any purpose until it shall have been
countersigned by the Rights Agent.

 

C-3

 

IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed under its corporate seal
by its authorized officers.

 

Dated as of                                    ,
2005

 

 

	
   

  	
  AVENTINE RENEWABLE ENERGY

  
	
   

  	
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  [SEAL]

  
	
   

  
	
  Attest:

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Countersigned:

  
	
   

  
	
   

  
	
  AMERICAN STOCK TRANSFER &

  
	
  TRUST COMPANY,

  
	
  as Rights Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Form of Reverse Side of
Right Certificate

 

FORM OF
ASSIGNMENT

 

(To be executed if the
registered holder

desires to transfer the Right Certificate.)

 

FOR VALUE RECEIVED

hereby sells, assigns and transfers unto                                                                                                                             

 

(Please print name and address of transferee)

                                                                                                                                                                                               
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint                                               
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.

 

Dated:                                      ,
20     

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

 

 

Signature Guaranteed:

 

 

CERTIFICATE

 

The undersigned hereby
certifies by checking the appropriate boxes that:

 

(1) the Rights
evidenced by this Right Certificate       are      
are not being assigned by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement); and

 

(2) after due inquiry
and to the best knowledge of the undersigned, it      
did       did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.

 

	
  Dated:                     ,
  20     

  	
   

  	
   

  
	
   

  	
  Signature

  

 

 

The signatures to the
foregoing Assignment and Certificate must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.

 

 

FORM OF
ELECTION TO PURCHASE

 

(To be executed if the
registered holder desires to exercise Rights

represented by the Right Certificate.)

 

To: Aventine Renewable Energy Holdings, Inc.

 

The undersigned hereby
irrevocably elects to exercise                      
Rights represented by this Right Certificate to purchase shares of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be issued in the
name of and delivered to:

 

	
  Please insert social security or other identifying
  number

  	
   

  	
   

  

 

	
   

  
	
  (Please print name and
  address)

  

 

 

If such number of Rights
shall not be all the Rights evidenced by this Right Certificate, a new Right
Certificate for the balance of such Rights shall be registered in the name of
and delivered to:

 

	
  Please insert social security or other identifying
  number

  	
   

  	
   

  

 

	
   

  
	
  (Please
  print name and address)

  

 

 

Dated:                              ,
20    

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

 

 

Signature Guaranteed:

 

 

CERTIFICATE

 

The undersigned hereby
certifies by checking the appropriate boxes that:

 

(1) the Rights
evidenced by this Right Certificate      are     
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement); and

 

(2) after due inquiry
and to the best knowledge of the undersigned, it     
did      did not acquire the Rights evidenced by
this Right Certificate from any Person who is, was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.

 

Dated:                    ,
20      

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

 

 

The signature to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.EXHIBIT 10.6

 

EXHIBIT A

 

AVENTINE
RENEWABLE ENERGY HOLDINGS, INC.

2003 STOCK INCENTIVE PLAN

 

ARTICLE 1

PURPOSE

 

Aventine Renewable Energy
Holdings, Inc. (the “Company”)
established the Aventine Renewable Energy Holdings, Inc. 2003 Stock Option
Plan effective May 30, 2003, as amended September 6, 2005, and as
further amended and renamed the Aventine Renewable Energy Holdings, Inc.
2003 Stock Incentive Plan, as of December 12, 2005 (as so amended and
restated, the “Plan”). The
purposes of the Plan are to advance the interests of the Company and its
stockholders by providing a means by which the Company and its Subsidiaries can
attract, retain and motivate selected directors, officers, other key employees
and consultants and provide such personnel with an opportunity to participate
in the increased value of the Company which their effort, initiative and skill
have helped produce.

 

ARTICLE 2

DEFINITIONS

 

“Affiliate” of any particular Person means any other
Person controlling, controlled by or under common control with such particular
Person where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities, by
contract or otherwise.

 

“Award” means any grant of an option, stock appreciation right, share of
restricted stock, restricted stock unit or other equity-based award under the
Plan.

 

“Award Agreement” means any written agreement, contract or
other instrument or document evidencing any Award, which may, but need not (as
determined by the Committee) be required to be executed or acknowledged by a
Participant as a condition precedent to receiving an Award or the benefits
under an Award.

 

“Board” means the Board of Directors of the Company.

 

“Cause” means, with respect to any Participant, that such Participant (i) is
convicted of or enters a plea of guilty or nolo
contendere to a felony, or to a crime or offense involving the
property of the Company or any of its Subsidiaries, (ii)

 

 

commits any act involving dishonesty, fraud or
disloyalty, or breach of his or her fiduciary duty to the Company or any of its
Subsidiaries, which in any such case is of material detriment to the business,
condition (financial or otherwise), reputation, character or standing of the
Company or any of its Subsidiaries, (iii) engages in gross negligence or
willful misconduct with respect to his or her duties on behalf of the Company
or any of its Subsidiaries, or (iv) breaches any of the covenants
contained in the Award Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means either the Board or the Compensation
Committee of the Board, as duly appointed from time to time by the Board.

 

“Covered Employee” means a “covered employee” within the
meaning of Section 162(m)(3) of the Code or any successor provision
thereto.

 

“Disability” means, with respect to any Participant, (i) any
permanent physical or mental incapacity or disability rendering such
Participant unable or unfit to perform effectively the duties and obligations
under his or her employment, directorship or other consulting relationship with
the Company or any of its Subsidiaries, as applicable, or (ii) any
illness, accident, injury, physical or mental incapacity or other disability,
where such condition has rendered such Participant unable or unfit to perform
effectively the duties and obligations under his or her employment,
directorship or other consulting relationship with the Company or any of its
Subsidiaries, as applicable for a period of at least ninety consecutive days or
four months in any twelve-month period (in either case, as determined in the
good faith judgment of the Committee).

 

“Eligible Individual” means any officer, director or employee of,
or consultant to, the Company or a Subsidiary and includes any holders of
Substitute Awards (whether or not employed by the Company or a Subsidiary).

 

“Exercise Price” means (i) in the case of an Option,
the price at which a Share may be purchased by a Participant pursuant to such
Option and (ii) in the case of a Stock Appreciation Right, the base price
of such Stock Appreciation Right.

 

“Fair Market Value” means (i) if the Shares are not listed
or traded on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq Stock Market, or reported by Pink Sheets, LLC, or any similar successor
organization, the fair market value as determined by the Committee in good
faith, and (ii) otherwise, the average of the closing prices of all Shares
(at the end of the regular session, as reported on the Consolidated Tape) on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock
Market, as applicable, or, if there have been no sales on any such exchange on
any day, the

 

2

 

average of the highest bid and lowest asked prices
on all such applicable exchanges (at the end of the regular session, as
reported on the Consolidated Tape) on such day or, if on any day the Shares are
not so listed, the average of the highest bid and lowest asked prices on such
day in the domestic over-the-counter market as reported by Pink Sheets LLC, or
any similar successor organization, in each case averaged over a 21-day period
consisting of the day as of which the Fair Market Value is being determined and
the 20 consecutive business days prior to such day.

 

“LLC” means Aventine Renewable Energy Holdings, LLC, a Delaware limited
liability company and its successors.

 

“LLC Agreement” means the Limited Liability Company
Agreement of the LLC dated as of May 30, 2003, as amended from time to
time.

 

“MS” means Morgan Stanley & Co. Incorporated and its successors.

 

“MSCP Funds” means, collectively, Morgan Stanley Dean
Witter Capital Partners IV, L.P., Morgan Stanley Dean Witter Capital Investors
IV, L.P. and MSDW IV 892 Investors, L.P., and any of their Permitted
Transferees.

 

“Option” means an option to purchase Shares granted to an Eligible Individual
under Article 6.

 

“Participant” means an Eligible Individual who receives
an Award under the Plan.

 

“Permitted Transferee” means:

 

(i) with respect to any MSCP Fund or the LLC, (A) any
Affiliate of a MSCP Fund, MS or any Affiliate or member of the LLC, (B) any
general or limited partner of any MSCP Fund (a “MSCP Partner”), (C) any current or former managing director,
general partner, director, limited partner, officer or employee of any MSCP
Fund or any MSCP Partner (collectively, “MSCP
Associates”), (D) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any MSCP Partner or MSCP
Associate and (E) a trust, corporation, partnership, or other entity
substantially all the economic interests of which are held by or for the
benefit of the MSCP Funds, their Affiliates, MSCP Partners, MSCP Associates,
their spouses or their children (whether by birth or adoption); or

 

(ii) with respect to a Participant, (A) a Person to whom
securities are Transferred by the Participant by will or the laws of descent
and distribution and (B) a trust controlled solely by the Participant

 

3

 

established
for the exclusive benefit of the Participant or his or her issue; provided
that, in the case of clause (B), the Participant retains sole voting control of
the securities that are Transferred.

 

“Person” means an individual, corporation, partnership, association, trust,
limited liability company or any other entity or organization, including a
government or political subdivision or an agency, unit or instrumentality
thereof.

 

“Qualified Public Offering” means a firm commitment underwritten public
offering of common equity securities of the Company pursuant to an effective
registration statement under the Securities Act, other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor or
similar form, that shall realize at least $75,000,000 in gross proceeds to the
Company.

 

“Restricted Stock” means any Share granted to an Eligible
Individual under Article 7.

 

“Restricted Stock Unit” or “RSU”
means a contractual right granted to an Eligible Individual under Article 7
that is denominated in Shares. Each unit represents a right to receive the
value of one Share (or a percentage of such value) upon the terms and
conditions set forth in the Plan and the applicable Award Agreement.

 

“Sale of the Company” means either (i) a sale, lease,
transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries, taken as a whole or (ii) a transaction or series of
transactions (including by way of merger, consolidation, sale of stock or
otherwise) the result of which is that any Person or “group” (as defined in Section 13
of the Securities Exchange Act), other than the LLC, the MSCP Funds or any of
their respective Affiliates (or a group containing any of them), becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 and Rule 13d-5
promulgated under the Securities Exchange Act), directly or indirectly, of more
than 50% of the voting power of the outstanding voting stock of the Company.

 

“Securities Act” means the Securities Act of 1933, as
amended.

 

“Securities Exchange Act” means the Securities Exchange Act of 1934,
as amended.

 

“Shares” means shares of common stock of the Company, par value $0.001 per
share.

 

“SAR” or “Stock Appreciation Right”
means any right granted to an
Eligible Individual under Article 6 to receive, upon exercise by such
individual,

 

4

 

the excess of (i) the Fair Market Value of one Share
on the date of exercise or at any time during a specified period before the
date of exercise over (ii) the Exercise Price of the right on the date of
grant, or if granted in connection with an outstanding Option, on the date of
grant of the related Option, as specified by the Committee in its sole
discretion.

 

“Subsidiary” means (i) any company during any
period in which it is a “subsidiary corporation” as that term is defined in Section 424(f) of
the Code with respect to the Company, or (ii) any other entity of which
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are directly
or indirectly owned by the Company.

 

“Substitute Award” means an Award granted pursuant to Article 5
in assumption of, or as an alternative to or replacement of, an outstanding
award previously granted by a business or entity all or a portion of which is
acquired by the Company or any Affiliate, or with which the Company or any
Affiliate combines.

 

ARTICLE 3

ADMINISTRATION

 

Section 3.01. Committee. The Plan shall be
administered by the Committee. Following an initial public offering of the
Shares, it is intended that each member of the Committee shall be (a) independent,
within the meaning of and to the extent required by applicable rulings and
interpretations of the Securities and Exchange Commission and the applicable
stock exchange on which the Shares trade or are quoted, (b) a “Non-Employee
Director”, as defined from time to time for purposes of Section 16 of the
Securities Act and the rules promulgated thereunder and (c) an
outside director pursuant to Section 162(m) of the Code, and any
regulations issued thereunder, in each case at such time as the Company becomes
subject to the respective regulatory regime.

 

Section 3.02. Authority of the Committee. Subject to
the provisions of the Plan, the Committee shall have the authority, in its
discretion and on behalf of the Company:

 

(a) to select from
among the Eligible Individuals those persons who shall receive Awards, to
determine the time or times of receipt, to determine the types of Awards and
the number of Shares covered by the Awards, to establish the terms, conditions,
performance criteria, restrictions and other aspects of the Awards and the
provisions of the applicable Award Agreement and to modify, amend, cancel or
suspend Awards;

 

5

 

(b) to interpret the
Plan;

 

(c) to prescribe, amend
and rescind any rules and regulations relating to the Plan;

 

(d) to determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares, other Awards or other property, including without limitation the
authority to settle Awards in cash or property upon a Sale of the Company or
other similar corporate transaction;

 

(e) to determine
whether, to what extent and under what circumstances cash, Shares, other
Awards, other property and any other amounts payable with respect to an Award
shall or may be deferred either automatically or at the election of the
Participant or of the Committee;

 

(f) to cancel and
regrant, accelerate vesting or otherwise adjust the Exercise Price of an Award
previously granted under the Plan; and

 

(g) to make all other
determinations and findings, including factual findings, deemed necessary or
advisable for the administration of the Plan.

 

Section 3.03. Committee Discretion. In exercising its
authority, the Committee shall have the broadest possible discretion. Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations and other decisions made in good faith by the Committee under
or with respect to the Plan, any Award or Award Agreement shall be final,
binding and conclusive on all persons.

 

Section 3.04. Committee Delegation. To the extent
permitted by applicable law or regulation, the Committee may delegate its
authority, or specified items thereof, to one or more designated individuals or
other committees of the Board.

 

ARTICLE 4

SHARES SUBJECT TO THE PLAN

 

Section 4.01. General Limitation. (a) Subject to
the provisions of Section 4.02, the maximum number of Shares that may be
delivered to Participants and their beneficiaries under the Plan shall be
5,001,172 Shares in the aggregate (including all grants made prior to the
amendment of the Plan). Following an initial public offering of the Shares,
notwithstanding the foregoing and subject to adjustment as provided in Section 4.02,
no Covered Employee may be granted Options or SARs under this Plan in any
calendar year that relate to more than 750,000 Shares.

 

6

 

(b) To the extent any
Shares covered by an Award are not delivered to a Participant or beneficiary
because the Award is forfeited, canceled, expires without being exercised, or
the Shares are not delivered because the Award is settled in cash or used to
satisfy applicable minimum tax withholding obligations or otherwise, such
Shares shall not be deemed to have been delivered for purposes of determining
the maximum number of Shares available for delivery under the Plan.

 

(c) If the Exercise
Price of any Option or SAR granted under the Plan is satisfied by tendering
Shares to the Company (by either actual delivery or by attestation), only the
number of Shares issued net of the Shares tendered shall be deemed delivered
for purposes of determining the maximum number of Shares remaining available
for delivery under the Plan.

 

(d) Any Shares covered
by a Substitute Award shall not be deemed to have been delivered for purposes
of determining the maximum number of Shares remaining available for delivery
under the Plan.

 

Section 4.02. Adjustments. In the event that the
Committee determines that any corporate transaction or distribution (including,
without limitation, any stock split, stock dividend, extraordinary cash
dividend, issuance of warrants or other rights to purchase Shares or other
securities of the Company, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, repurchase, combination or exchange of
Shares or other securities of the Company) affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee may, in such manner as it may
deem equitable, adjust any or all of (i) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
with respect to which Awards may be granted under Section 4.01; (ii) the
number of Shares or other securities of the Company (or number and kind of
other securities and property) subject to outstanding Awards; and (iii) the
grant, purchase or exercise price or other terms and conditions of any Award or,
if deemed appropriate, the Committee may make provision for a cash payment to
the holder of an outstanding Award in full satisfaction of such Award.

 

ARTICLE 5

ELIGIBILITY AND PARTICIPATION

 

Subject to the terms and
conditions of the Plan, the Committee shall determine and designate, from time
to time, from among the Eligible Individuals those persons who will be granted
one or more Awards under the Plan and thereby become Participants in the Plan.
Awards may be granted on conditions

 

7

 

specified by the Committee. Awards may be granted as
alternatives to or in replacement of Awards outstanding under the Plan or any
other plan or arrangement of the Company or an Affiliate (including a plan or
arrangement of a business or entity, all or a portion of which is acquired by
or combines with the Company or an Affiliate).

 

ARTICLE 6

OPTIONS AND STOCK APPRECIATION RIGHTS

 

Section 6.01. Options. The Committee is hereby
authorized to grant Options to Participants. Options granted pursuant to the
Plan may be either “incentive stock options” within the meaning of Section 422
of the Code or nonqualified stock options. “Incentive stock options” may only
be granted to officers and other key employees of the Company or its Subsidiaries.
Any Option granted under the Plan may be evidenced by an Award Agreement and
shall contain terms and conditions not inconsistent with the following
limitations and conditions.

 

Section 6.02. Stock Appreciation Rights. The Committee
is hereby authorized to grant Stock Appreciation Rights to Participants with
terms and conditions as the Committee shall determine not inconsistent with the
provisions of the Plan. SARs may be granted hereunder to Participants either
alone or in addition to other Awards granted under the Plan and may, but need
not, relate to a specific Option granted under this Article 6. Any SAR
granted under the Plan may be evidenced by an Award Agreement.

 

Section 6.03. Exercise Price. The Exercise Price of
each Option and each SAR shall be established by the Committee at the time of
grant. Unless otherwise determined by the Committee and specified in the Award
Agreement, the Exercise Price shall be the Fair Market Value of a Share on the
date of grant of the Option or SAR, as applicable.

 

Section 6.04. Vesting. Unless the Committee determines
otherwise, 20% of the Shares subject to an Option or SAR shall vest on each of
the first five anniversaries of the date of grant of such Option or SAR, as
applicable; provided that the
Participant remains a director, employee or consultant of the Company or the
Subsidiaries on each such date.

 

Section 6.05. Terms of Exercise. An Option or SAR
shall be exercisable only in accordance with the terms and conditions and
during such periods as may be established by the Committee in the Award
Agreement or otherwise in accordance with the Plan and the Award Agreement. The
Committee may, in its discretion, provide that such an Option or SAR may be
exercised in whole or in part, in installments, cumulative or otherwise, for
any period of time specified by

 

8

 

the Committee or based on performance or other
criteria established by the Committee.

 

Section 6.06. Payment. No Shares shall be delivered
pursuant to any exercise of an Option until payment in full of the Exercise
Price, or adequate provision therefor (in the discretion of the Committee), is
received by the Company. The Committee shall determine the method or methods by
which such payment shall be made, and the form or forms of such payment, which
shall include: (i) cash, (ii) Shares owned by the Participant for at
least six months or in Shares which may be received by the Participant upon
exercise of the Option or SAR (in each case, the value of such Shares shall be
their Fair Market Value on the date of exercise), or (iii) any combination
thereof.

 

Section 6.07. Expiration and Termination. An Option or
SAR and all rights and obligations thereunder shall expire on the date to be
determined by the Committee and set forth in the Award Agreement, which shall
not be greater than ten years from the date of grant of such Option or SAR, as
applicable. Except as otherwise determined by the Committee at the time of
grant or thereafter, upon any termination of a Participant’s employment or
service with the Company or the Subsidiaries, the unvested portion of an Option
or SAR, as applicable, held by such Participant shall be deemed immediately
forfeited and cancelled without any payment or consideration being due from the
Company.

 

ARTICLE 7

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

Section 7.01. Restricted Stock and Restricted Stock Units. (a) The
Committee is hereby authorized to grant Awards of Restricted Stock and
Restricted Stock Units to Participants. Restricted Stock and Restricted Stock
Units shall be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may impose
(including, without limitation, any limitation on the right to vote Shares
underlying the Restricted Stock or the right to receive any dividend, other
rights or property), which restrictions may lapse separately or in combination
at such times, under such circumstances (including future service
requirements), in such installments or otherwise and under such other
circumstances as the Committee may determine at the date of grant or
thereafter. Awards of Restricted Stock and Restricted Stock Units may be issued
to Participants for no consideration, for such minimum consideration as may be required
by applicable law or for other consideration, as determined by the Committee in
its sole discretion.

 

(b) Forfeiture. Except as otherwise determined
by the Committee, upon termination of employment or service during the
applicable restriction period, Restricted Stock or Restricted Stock Units that
are at that time subject to

 

9

 

restrictions shall be forfeited and reacquired by
the Company; provided that the
Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock and Restricted Stock Units will lapse
in whole or in part on certain events, including in the event of terminations resulting
from specified causes.

 

(c) Certificates for Stock. Restricted Stock
granted under the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are registered in the
name of the Participant, the Committee may require that such certificates bear
an appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical
possession of the certificates, and that the Participant deliver a stock power
to the Company, endorsed in blank, relating to the Restricted Stock.

 

ARTICLE 8

OTHER STOCK-BASED AWARDS

 

The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such
other Awards that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Shares. The Committee
shall determine the terms and conditions of such Awards, which shall be
consistent with the terms of the Plan. Shares or other securities delivered
pursuant to an Award in the nature of a purchase right granted under this Article 8
shall be purchased for such consideration, which may be paid by such method or
methods and in such form or forms, including, without limitation, cash, Shares,
other securities, other Awards, or other property, or any combination thereof,
as the Committee shall determine.

 

ARTICLE 9

OTHER PROVISIONS APPLICABLE TO ALL AWARDS

 

Section 9.01. Sale of the Company. Unless otherwise
determined by the Committee and specified in the Award Agreement, upon a Sale
of the Company, any unvested Awards shall become fully vested and
nonforfeitable.

 

Section 9.02. Settlement of Award. Shares delivered
pursuant to the exercise of an Option or SAR or upon settlement of any other
Award shall be subject to such conditions, restrictions and contingencies as
the Committee may establish pursuant to the Plan and any Award Agreement, in
addition to the conditions set forth herein.

 

10

 

Section 9.03. Cancellation of Awards. Any provision of
this Plan or any Award Agreement to the contrary notwithstanding, the Committee
may cause any Option or SAR granted hereunder to be canceled in consideration
of a cash payment to the holder of such Option or SAR equal in value to the
product of (i) the number of Shares subject to such Option or SAR,
multiplied by (ii) the excess of the Fair Market Value of a Share as of
the date of such cancellation over the Exercise Price with respect to such canceled
Option or SAR. Any other Awards may be canceled in consideration of a cash
payment to the holder of such Award equal in value to the product of (i) the
number of Shares underlying such Award, multiplied by the excess of (ii) the
Fair Market Value of a Share as of the date of such cancellation over the
amount paid for such Award (if any).

 

Section 9.04. Amendment to Awards. The Committee may
waive any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted, prospectively
or retroactively.

 

Section 9.05. Repurchase of Options or Other Awards. (a) Upon
any termination of a Participant’s employment or service with the Company or
the Subsidiaries, the unvested portion of any Options or SAR or any other Award
held by such Participant shall be deemed immediately forfeited and cancelled
and the vested portion of any Options or SARs or any other Award held by the
Participant shall, at the Company’s election after such termination, be subject
to purchase by the Company for an amount equal to the Fair Market Value of the
Shares subject to such Options or other Award on the date of termination of
employment or service, less, in the case of an Option or SAR, the aggregate
Exercise Price with respect to such Option or SAR, and in the case of any other
Award, the aggregate amount paid for such Award (if any). In the event that the
amount determined according to the preceding sentence shall be zero or less,
the repurchase of such Awards shall be effected by the delivery by the Company
to the Participant of a written notice stating that the value thereof is zero
and that such Awards are cancelled.

 

(b) If the Company
elects to purchase Options or SARs or other Awards pursuant to this Section 9.05,
the Company shall deliver written notice (a “Purchase
Notice”) to such Participant to such effect. Each Award subject to
being purchased shall be deemed to be expired and cancelled automatically upon
receipt of the Purchase Notice and the purchase price calculated as set forth
in Section 9.05(a). Payment of the purchase price may be made by delivery
of a check or by wire transfer.

 

Section 9.06. Repurchase of Shares. (a) Upon any
termination of a Participant’s employment or service with the Company or the Subsidiaries,
the Company will be entitled to repurchase at the Company’s election all or any
of the Shares held by a Participant (whether or not previously acquired by the
Participant in connection with the exercise of an Option or SAR or upon

 

11

 

settlement of any other Award) (the “Repurchase Option”). If the Company elects
to exercise the Repurchase Option with respect to Shares held by any
Participant pursuant to this Section 9.06, it shall deliver written notice
(the “Repurchase Notice”) to such
Participant to such effect within 90 days after the occurrence of the event
giving rise to the Repurchase Option.

 

(b) The repurchase
price (the “Repurchase Price”) for
a Participant’s Shares to be repurchased (the “Surrendered Securities”) shall be the Fair Market Value of
such Surrendered Securities on the date of termination of employment or
service. Notwithstanding the foregoing, in the case of a termination of a
Participant’s employment or service involving a breach of any of the covenants
contained in the Award Agreement (including any covenants relating to
non-competition, non-solicitation and confidentiality), the Repurchase Price
shall be the lesser of the Fair Market Value of the Surrendered Securities on
the date of termination of employment or service and the original Exercise
Price (or other amount paid with respect to an Award, if any, in the case of
Awards other than Options and SARs) paid for such Surrendered Securities or the
Fair Market Value of such Surrendered Securities on the original date of
purchase, as applicable.

 

(c) (i) Within 10
business days after the Repurchase Price for the Surrendered Securities has
been determined, the Company shall send a notice to such holder of the
Surrendered Securities setting forth the consideration to be paid for such
securities and the time and place for the closing of the transaction, which
date shall not be more than 20 days nor less than five days after the delivery
of such notice. At such closing, the holder of the Surrendered Securities shall
deliver all certificates (if any exist) evidencing the Surrendered Securities
to be repurchased to the Company, and the Company shall pay for the Surrendered
Securities to be repurchased pursuant to the Repurchase Option by delivery of a
check or wire transfer in the aggregate amount of the Repurchase Price for such
securities.

 

(ii) The Company shall
be entitled to receive customary representations and warranties from such
holder that he or she is the record and beneficial owner of the Surrendered
Securities free and clear of any liens, and that he or she will transfer and
deliver valid title to such securities free and clear of any liens.

 

(d) Notwithstanding
anything to the contrary contained in this Plan, all repurchases of Surrendered
Securities by the Company shall be subject to applicable state and federal laws
and regulations and, to the extent applicable, the Company’s debt and equity
financing agreements. If any of the foregoing prohibits (in the discretion of the
Company) the repurchase of Surrendered Securities which are otherwise permitted
or required hereunder, the time periods provided in this Section 9.06
shall be suspended, and the Company may make such repurchases as soon as it is
permitted to do so under such restrictions, unless

 

12

 

by such time such Repurchase Option has terminated
pursuant to Section 9.07 provided that, notwithstanding the foregoing, in
no event shall the time periods provided in this Section 9.06 be suspended
for more than 6 months.

 

(e) In the event the
Company delivers a Repurchase Notice to a Participant but does not elect to
repurchase all Shares held by such Participant, the Shares held by such
Participant which the Company has not elected to repurchase in the Repurchase
Notice shall no longer be subject to the Repurchase Option, but shall continue
to be subject to Article 12 hereof.

 

Section 9.07. Termination Of Certain Company Rights. The
Company’s rights under Sections 9.03, 9.05 and 9.06 shall terminate upon the
consummation of a Qualified Public Offering so long as Participant is a
director, employee or consultant of the Company or the Subsidiaries immediately
prior to such Qualified Public Offering and upon a Sale of the Company.

 

Section 9.08. Other Provisions. The grant of any Award
may also be subject to such other provisions as the Committee deems appropriate
(whether or not applicable to any Award granted to any other Participant),
including the treatment of Awards and Shares upon the occurrence of any
corporate transaction or distribution involving the Company, including any
merger, reorganization, recapitalization or other similar corporate event.

 

ARTICLE 10

DEFERRALS

 

The Committee, in an Award
Agreement or otherwise, may permit a Participant to defer such Participant’s
receipt of the payment of cash or delivery of Shares that would otherwise be
due to such Participant by virtue of the exercise of an Option or SAR or the
settlement of any other Award made under this Plan.

 

ARTICLE 11

TAX WITHHOLDING

 

All distributions under the
Plan are subject to withholding of all applicable taxes, and the Committee may
condition the delivery of Shares or other benefits upon satisfaction of all
applicable withholding requirements. The Committee, in its discretion and
subject to such requirements as it may prescribe, may permit such withholding
obligations to be satisfied through any combination of the following: (i) cash
payment by the Participant, (ii) payroll withholding of the Participant’s
salary, wages or other compensation, (iii) surrender of Shares which the
Participant already owns (either by actual surrender or attestation), or (iv) surrender
of Shares or other benefits to which the Participant is otherwise entitled

 

13

 

(e.g.,
upon exercise of an Option or SAR or the settlement of any other Award made
under this Plan) under the terms of the Plan.

 

ARTICLE 12

TRANSFERABILITY

 

Section 12.01. Transferability of Options and Other Awards. Except
as otherwise expressly provided in an Award Agreement, no Award granted under
this Plan may be anticipated, assigned, attached, garnished, optioned,
transferred or made subject to any creditor’s process, whether voluntarily,
involuntarily or by operation of law. An Option or any other Award granted
under this Plan may be exercised during the lifetime of the Participant only by
him or her or by his or her legal representative.

 

Section 12.02. Transferability of Shares. Except as
otherwise expressly provided in an Award Agreement, Shares delivered pursuant
to the exercise of an Option or SAR or upon settlement of any other Award
granted under this Plan may not be anticipated, assigned, attached, garnished,
optioned, transferred or made subject to any creditor’s process, whether
voluntarily, involuntarily or by operation of law.

 

ARTICLE 13

LIMITATION ON IMPLIED RIGHTS

 

Section 13.01. Property Rights. Neither a Participant
nor any other Person shall, by reason of participation in the Plan, acquire any
right in or title to any assets, funds or property of the Company or any
Affiliate whatsoever including without limitation, any specific funds, assets
or other property which the Company or any Affiliate, in its or their sole
discretion, may set aside in anticipation of a liability under the Plan.
Subject to the terms of the Plan, a Participant shall have only a contractual
right to the Shares or amounts, if any, payable under the Plan, unsecured by
any assets of the Company or any Affiliate, and nothing contained in the Plan
shall constitute a representation or guarantee that the assets of the Company
or any Affiliate shall be sufficient to pay any benefits to any Person.

 

Section 13.02. Employment Rights. Nothing in this Plan
nor in any Award Agreement shall confer upon any Participant any promise or
commitment by the Company or an Affiliate regarding employment, employment
positions, work assignments, compensation or any other term or condition of
employment or affiliation.

 

14

 

Section 13.03. No Implied Rights or Obligations. The
Company, in establishing and maintaining this Plan as a voluntary and
unilateral undertaking, expressly disavows the creation of any rights in
Participants or others claiming entitlement under the Plan or any obligations
on the part of the Company, any Affiliate or the Committee, except as expressly
provided herein. In particular, unless otherwise expressly provided for in the
Award Agreement, no third-party beneficiary rights shall be created under the
Plan.

 

Section 13.04. No Trust or Fund Created. Neither the
Plan nor any Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Affiliate pursuant
to an Award, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.

 

Section 13.05. Rights as a Shareholder. No Participant
or holder of any Option or of any other Award under this Plan shall have any
rights as a shareholder with respect to any Shares to be issued with respect to
any Option or other Award under the Plan until he or she shall have become the
holder of such Shares in accordance with the terms of the Plan.

 

ARTICLE 14

GOVERNMENT AND STOCK EXCHANGE REGULATIONS

 

The Committee may refuse to
issue or transfer any Shares or other consideration under an Award if, acting
in its sole discretion, it determines that the issuance or transfer of such
Shares or such other consideration might violate any applicable law or
regulation or entitle the Company to recover the same under Section 16(b) of
the Exchange Act, and any payment tendered to the Company by a Participant,
other holder or beneficiary in connection with the exercise of such Award shall
be promptly refunded to the relevant Participant, holder or beneficiary.
Without limiting the generality of the foregoing, no Award granted hereunder
shall be construed as an offer to sell securities of the Company, and no such
offer shall be outstanding, unless and until the Committee in its sole
discretion has determined that any such offer, if made, would be in compliance
with all applicable requirements of the U.S. federal and state securities laws
and any other laws to which such offer, if made, would be subject.

 

Upon the exercise of an
Option or settlement of any other Award under this Plan at a time when there is
not in effect a registration statement under the Securities Act relating to the
Shares issuable upon exercise or payment thereof and available for delivery a
prospectus meeting the requirements of Section 10(a)(3) of the
Securities Act or if the rules or interpretations of the Securities and

 

15

 

Exchange Commission so require, the Shares may be
issued only if the holder represents and warrants in writing to the Company
that the Shares purchased are being acquired for investment and not with a view
to distribution thereof.

 

The Company is under no duty
to ensure that Shares may legally be delivered under the Plan, and shall have
no liability to Award recipients in the event such delivery of Shares may not
be made.

 

ARTICLE 15

AMENDMENTS,  SUSPENSIONS
OR TERMINATION OF PLAN

 

The Board may at any time
suspend or terminate the Plan and may amend it from time to time in such
respects as the Board may deem advisable in order that Awards granted
thereunder shall conform to any change in the law, or in any other respect
which the Board may deem to be in the best interests of the Company; provided, however, that no such amendment
shall, without the approval of holders of a majority of the voting power
represented by the securities of the Company entitled to vote, increase the
maximum number of Shares for which Awards may be granted under the Plan (in the
aggregate or to any single individual), except as specified in Section 4.02,
or change the class of employees eligible to participate in the Plan.

 

ARTICLE 16

TERMINATION

 

The Plan shall continue in
effect until May 29, 2013, unless earlier terminated by the Board pursuant
to Article 15.

 

ARTICLE 17

GOVERNING LAW

 

The validity, construction
and effect of the Plan, the Award Agreements and any rules, regulations or
procedures relating thereto shall be determined in accordance with the laws of
the State of Delaware, without application of the conflict of laws principles
thereof.

 

16

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