Exhibit 10.2
REG NEWCO, INC.
STOCKHOLDER
AGREEMENT
This STOCKHOLDER AGREEMENT (this
“ Agreement ”) is made and entered into as of
, 2009, by and among: (i) REG Newco, Inc., a Delaware
corporation (the “ Company ”), (ii) certain
of the holders of the Company’s Series A Convertible
Preferred Stock (“ Series A Preferred Stock ”),
as listed on Exhibit A hereto (collectively referred to
herein as the “ Series A Stockholders ” and each
individually as a “ Series A Stockholder ”), and
(iii) certain of the holders of the Company’s Common
Stock (“ Common Stock ”), as listed on
Exhibit A hereto (collectively referred to herein as the
“ Common Stockholders ” and each individually as
a “ Common Stockholder ”). The Series A
Stockholders and the Common Stockholders are sometimes collectively
referred to herein as the “ Stockholders ” and
each individually as a “ Stockholder.
”
W I T N E S S E T H:
WHEREAS, pursuant to the Amended and
Restated Merger Agreement executed August 7, 2009 by and among
the Company, Renewable Energy Group, Inc. and REG Merger Sub, Inc.,
the Company is obligated to enter into this Agreement.
WHEREAS, certain terms are defined
in Section 1 of this Agreement;
NOW, THEREFORE, in consideration of
the premises and the mutual terms, covenants and conditions
contained herein, the parties hereto hereby agree as
follows:
Section 1. Definitions .
As used in this Agreement, the following terms shall have the
meanings assigned to them in this Section 1:
“ Bunge ” means
Bunge North America, Inc., a New York corporation.
“ Excluded Affiliate
Transfer ” means (i) any transfer of Preferred Stock
or Common Stock by a Stockholder that is an entity (a) whether
voluntarily or by operation of law, to a partner, member,
stockholder, subsidiary or other affiliate of such Stockholder
provided that, in the case of any transfer described in this clause
(i)(a), other than any transfer by a member of the USBG Group
(subject to the limitations set forth in the definition of USBG
Group below), all transferees or assignees of the same Stockholder
entity shall appoint a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking any action under
this Agreement, or (b) to an entity that is the legal
successor of such Stockholder; (ii) any transfer of Preferred
Stock or Common Stock, as the case may be, by a Stockholder who is
an individual to a member of such Stockholder’s family or to
a revocable trust for estate planning purposes; (iii) any
transfer occurring by will or intestate succession upon the death
of a Stockholder who is an individual; and (iv) any transfer
of Preferred Stock or Common Stock, as the case may be, by a
Stockholder which is a trust to the principal beneficiary of that
trust.
“ Indirect Transfer
” means (with respect to any Stockholder that is a
corporation, partnership, limited liability company, or other
entity) a deemed Transfer of the Preferred Stock or
Common
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Stock, which shall occur upon any Transfer to
any person of a majority of the ownership of, or voting rights
associated with, the equity or other ownership interests in such
Stockholder if at least seventy-five percent (75%) of the
value of all of such Stockholder’s assets is attributable to
such Stockholder’s investment in the Company (it being
understood that the acquisition by a holder of a majority of the
ownership of, or voting rights associated with, the equity or other
ownership interests in such Stockholder, of additional equity
securities of such Stockholder shall not be an Indirect Transfer);
provided, however, that in no event shall any transfer of equity or
other ownership interests in NGP, Bunge, Westway, USBG, or West
Central be deemed an Indirect Transfer of Preferred Stock or Common
Stock.
“ NGP ” means NGP
Energy Technology Partners L.P., a Delaware limited partnership,
and Natural Gas Partners VIII, L.P., a Delaware limited
partnership.
“ Person ”
(whether or not capitalized) means any individual, corporation,
partnership, limited liability company, trust, unincorporated
association, business, or other legal entity, and any governmental
agency or political subdivision thereof.
“ Pledge ” means
any pledge of an interest in, or other encumbrance placed upon,
Preferred Stock or Common Stock as security for indebtedness or for
other purposes.
“ Preferred Stock
” means Series A Preferred Stock.
“ Preferred
Stockholders ” means Series A Stockholders.
“ Preferred
Supermajority ” means the holders of at least
seventy-five percent (75%) of the then outstanding shares of
Preferred Stock that were issued in exchange for shares of the
series A, series AA, series B or series BB preferred stock of
Renewable Energy Group, Inc., a Delaware corporation
(“REG”), pursuant to the Agreement and Plan of Merger
dated
, 2009 by and among the Company, REG and REG Merger Sub,
Inc.
“ Securities Act
” means the Securities Act of 1933, as amended.
“ Transfer ”
(whether or not capitalized) means any sale, assignment or other
disposition of Preferred Stock or Common Stock, other than a Pledge
or an Indirect Transfer.
“ USBG Group ”
means USBG, its members and their respective direct or indirect
owners, partners, members, stockholders, subsidiaries and other
affiliates; provided , however , that the number of
members of the USBG Group shall not exceed seventy (70) and
any Transfer made by a Stockholder that would otherwise be a member
of the USBG Group which transfer would cause the number of members
of the USBG Group to exceed seventy (70) shall be subject to
the restrictions contained in this Agreement as if such Stockholder
were not a member of the USBG Group.
“ West Central ”
means West Central Cooperative, an Iowa cooperative
association.
“ Westway ” means
E D & F Man Netherlands BV.
Section 2. Election of
Directors; Other Voting Matters .
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(a) Company’s Board .
From and after the date hereof and until the termination of this
Agreement as provided in Section 8(a) below, the Stockholders
agree to vote all of their Preferred Stock, Common Stock and any
other voting securities of the Company over which they have voting
control, and the Company will take all reasonable actions within
its control, that may be necessary in order to cause:
(i) the authorized number of the
Company’s Board of Directors (the “ Board
”) to be maintained at not less than ten (10) nor more
than fourteen (14) directors;
(ii) the nomination and election to
the Board of (A) for so long as NGP holds at least 2,105,263
shares of Series A Preferred Stock (and/or Common Stock issued or
issuable upon conversion of such Series A Preferred Stock) (subject
to appropriate adjustments in the event of any stock dividend,
stock split, combination or other similar recapitalization
affecting such shares), two (2) representatives designated by
NGP, (B) for so long as Westway holds at least 657,895 shares
of Series A Preferred Stock (and/or Common Stock issued or issuable
upon conversion of such Series A Preferred Stock) (subject to
appropriate adjustments in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such
shares), one (1) representative designated by Westway,
(C) for so long as Bunge holds at least 526,316 shares of
Series A Preferred Stock (and/or Common Stock issued or issuable
upon conversion of such Series A Preferred Stock) (subject to
appropriate adjustments in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such
shares), one (1) representative designated by Bunge and
(D) for so long as the members of the USBG Group collectively
hold at least 1,277,167 shares of Series A Preferred Stock (and/or
Common Stock issued or issuable upon conversion of such Series A
Preferred Stock) (subject to appropriate adjustments in the event
of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares), one
(1) representative designated by the members of the USBG Group
holding a majority of the shares of Series A Preferred Stock
(and/or Common Stock issued or issuable upon conversion of the
shares of such Series A Preferred Stock) held by members of the
USBG Group (Westway, Bunge and the USBG Group are collectively
referred to herein as the “ Strategic Investors
”); provided, however, in the event any of NGP, Westway,
Bunge or USBG Group has elected to have all of its shares of Series
A Preferred Stock redeemed by the Company pursuant to the Series A
Certificate of Designation (a “ Redeeming Stockholder
”), and the Company is not able to redeem all the shares of
Series A Preferred Stock held by the Redeeming Stockholder, then
the Redeeming Stockholder shall not lose the right to have its
representative(s) nominated and elected to the Board pursuant to
this Subsection 2(a)(ii) until such redemption is
complete.
(iii) the nomination and election to
the Board of, for so long as West Central holds at least 4,750,000
shares of Common Stock (subject to appropriate adjustments in the
event of any stock dividend, stock split, combination or other
similar recapitalization affecting such shares), five
(5) representatives designated by
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West Central, who shall include
Jeffrey Stroburg, for so long as he is the Chief Executive Officer
of the Company, and shall include one (1) person knowledgeable
about the industry in which the Company operates who would qualify
as a “Disinterested Director” (as defined below in
Section 2(c)) immediately prior to his or her nomination
(whose nomination and election shall be approved by the holders of
eighty percent (80%) of the Series A Preferred Stock, such
approval not to be unreasonably withheld) (the “
Independent Director ”); provided, however, at any
time as the Chief Executive Officer of the Company is not nominated
and elected by West Central or the Series A Stockholders, the
Stockholders shall cause the nomination and election to the Board
of the Chief Executive Officer of the Company to replace the
Independent Director;
(iv) the nomination and election to
the Board of
,
, and
to serve until the expiration of the restrictions in Article X of
the Certificate of Incorporation of the Company, and until their
successors are elected and qualified, or until their earlier death,
resignation or removal, which obligations to nominate and elect
shall be specifically enforceable as third party beneficiaries of
this Section 2(a)(iv) by the holders of Series A Preferred
Stock and Common Stock, received pursuant to the Merger Agreement
dated
, 2009 by and among the Company, REG Danville, LLC and Blackhawk
Biofuels, LLC, the Asset Purchase Agreement dated
, 2009 by and among the Company, REG Newton, LLC and Central Iowa
Energy, LLC and the Asset Purchase Agreement dated
, 2009 by and among the Company, REG Wall Lake, LLC and Western
Iowa Energy, LLC;
(v) the removal from the Board (with
or without cause) of any representatives designated hereunder shall
be at the written request of the parties possessing the right to
designate such representative (but only upon such written request
and under no other circumstances);
(vi) in the event that any member of
the Board designated hereunder for any reason ceases to serve as a
member of the Board during such representative’s term of
office, the resulting vacancy to be filled by a representative
designated by the parties possessing the right to designate such
representative as provided hereunder;
(vii) in the event that NGP, any of
the Strategic Investors or West Central should cease to hold
sufficient shares of Series A Preferred Stock (or Common Stock
issuable upon conversion of the Series A Preferred Stock), or
Common Stock, as applicable, and, therefore, should lose its right
to designate a director as described in Section 2(a)(ii) or
(iii), the person(s) to fill the resulting Board vacancy or
vacancies shall be elected by the holders of a majority of the
Preferred Stock and Common Stock voting together as a single class
(with the Preferred Stock voting on an as-converted basis);
and
(viii) Each entity in which the
Company directly or indirectly owns more than fifty percent
(50%) of the outstanding equity interests (each, a
“Subsidiary”) shall reserve to the Company acting
through its Board of Directors (to the exclusion
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of the Board of Directors, Board of
Managers or other similar governing body of each Subsidiary) the
following powers and authorities:
(A) To authorize or issue, or
obligate the Subsidiary to issue any stock or units or any
securities or instruments convertible into stock or units, or to
authorize or approve any new stockholder or member being admitted
to the Subsidiary, or consent to allow an assignee to become a
stockholder or member;
(B) To amend the Articles of
Incorporation or Organization of the Subsidiary;
(C) To amend any Bylaws or Operating
Agreement of the Subsidiary;
(D) To otherwise alter or change the
rights, preferences or privileges of the stockholders or members of
the Subsidiary;
(E) To issue, or cause the
Subsidiary to issue, any indebtedness, other than trade accounts
payable, letters of credit, performance bonds and other similar
credit support incurred in the ordinary course of business, or to
amend, renew, increase or otherwise alter in any material respect
the terms of any indebtedness previously approved by the
stockholders or members;
(F) To redeem, purchase or otherwise
acquire any stock, units or equity of the Subsidiary;
(G) To declare bankruptcy, dissolve,
liquidate or wind up the affairs of the Subsidiary;
(H) To modify or change the nature
of the Subsidiary’s business such that a material portion of
the Subsidiary’s business is devoted to any business other
than the business of (x) designing, constructing or operating
biodiesel facilities and (y) manufacturing, selling or
marketing biodiesel fuels;
(I) To grant any exclusive rights or
licenses in the Subsidiary’s intellectual
property;
(J) To make any capital expenditure
in excess of $500,000 which is not otherwise included in the annual
budget previously approved by shareholders or members of the
Subsidiary;
(K) To elect or remove directors or
managers of the Subsidiary;
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(L) To sell, exchange, lease,
mortgage, pledge or other transfer all or substantially all of the
assets of the Subsidiary or any asset with a sale price in excess
of $500,000 outside the ordinary course of business;
(M) To merge or consolidate the
Subsidiary with another entity (excluding any merger with or into
another Subsidiary or the Company); and
(N) To indemnify any officer,
director or manager of the Subsidiary.
(b) Vote to Increase Authorized
Common Stock . Each Stockholder agrees to vote or cause to be
voted all shares of capital stock owned by such Stockholder, or
over which such Stockholder has voting control, in order to ensure
that at all times there are sufficient shares of Common Stock
available for (i) the conversion of all outstanding shares of
Series A Preferred Stock into shares of Common Stock in accordance
with the Certificate of Designation of Series and Determination of
Rights and Preferences of the Series A Convertible Preferred Stock,
and (ii) the exercise of all outstanding warrants to purchase
Common Stock in accordance with the terms of any and all
outstanding warrant agreements.
(c) In addition to any approvals and
approval processes that may be required from time to time by the
Board of Directors, the Bylaws of the Company or applicable law,
for so long as this Agreement is in effect, the Company shall not
enter into or engage in any contract or transaction with any person
who beneficially owns ten percent (10%) or more of the equity
securities of the Company (a “Principal Stockholder”)
or an affiliate (as defined in Rule 405 of the Securities Act of
1933) (an “Affiliate”) of a Principal Stockholder (such
Principal Stockholder or Affiliate, a “Related Party”),
unless such contract or transaction shall have been authorized,
approved or ratified by a majority of the “Disinterested
Directors” nominated by holders of the Series A Preferred
Stock pursuant to this Agreement, as amended from time to time. For
purposes of the foregoing, the term “Disinterested
Director” shall mean a director that is neither an Affiliate
of the Related Party nor nominated to the Board of Directors by
such Related Party.
Section 3. Transfer
Restrictions .
(a) General Rights and
Obligations . In addition to any restrictions on the Transfer
of any Preferred Stock or Common Stock that are imposed by the
Certificate of Incorporation of the Company, or under the
Securities Act or other applicable securities laws, no Stockholder
shall Transfer or Pledge all or any part of such
Stockholder’s Preferred Stock or Common Stock without the
prior written consent of all the other Stockholders or in
accordance with this Section 3.
(b) Lock Up . In the event
the Company shall undertake its first sale to the public pursuant
to a registration statement of the Company filed under the
Securities Act, each Stockholder shall agree in writing, in form
and substance customary for similar transactions, if requested by
the managing underwriter or underwriters thereof, not to lend,
offer, pledge,
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sell, contract to sell (including,
without limitation, any short sale), sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or
other securities of the Company convertible into or exercisable or
exchangeable for Common Stock held by such Stockholder immediately
before the effective date of the registration statement for such
offering, or enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock (whether any such
transaction is described in this subsection is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise, except for securities to be sold to such underwriter
pursuant to such registration statement; provided, however
that:
(i) such period shall not exceed one
hundred eighty (180) days after the effective date of the
registration statement, except that such 180-day period may be
extended for not more than eighteen (18) days if such
extension is reasonably necessary to allow the Company’s
underwriters to comply with NASD Conduct Rule 2711 (or any similar
successor rule); and
(ii) the Company’s directors,
officers and stockholders individually owning more than one percent
(1%) of the Company’s outstanding Common Stock (after
giving effect to conversion into Common Stock of all outstanding
Preferred Stock) also agree to such limitations.
The Company may impose stop-transfer
instructions with respect to the shares of Common Stock or other
securities of the Company convertible into or exercisable or
exchangeable for Common Stock subject to the foregoing restriction
until the end of such one hundred eighty (180) day period (or
the extended period set forth above).
(c) Right of First Refusal
.
(i) If at any time any Stockholder
intends to Transfer any or all of the Preferred Stock or Common
Stock owned by him (any such Stockholder is hereinafter referred to
as a “ Selling Stockholder ”), excluding any
Transfer in connection with a bona fide offer from a Proposed
Transferee to purchase all of the stock or all or substantially all
of the assets of the Company which shall be governed solely by
Section 3(d)(ii), the Selling Stockholder shall give written
notice (the “ Stockholder’s Notice ”) to
the Company and the Preferred Stockholders stating that the Selling
Stockholder intends to make such Transfer, identifying the proposed
purchaser (the “ Proposed Transferee ”),
specifying the number of shares of Preferred Stock or Common Stock
proposed to be transferred (the “ First Refusal Shares
”), and specifying the per share purchase price which the
Proposed Transferee has offered to pay for the First Refusal Shares
(the “ Sale Price ”). The Stockholder’s
Notice shall certify that the Selling Stockholder has received a
firm offer from the Proposed Transferee and in good faith believes
a binding agreement for the transfer of the First Refusal Shares is
obtainable on the terms set forth therein. A copy of the offer (or
a summary of the terms thereof) shall be attached to the
Stockholder’s Notice.
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(ii) If, at the time of receipt of
the Stockholder Notice, the Company is contractually restricted
from fully exercising its rights to purchase pursuant to this
Section 3(c) (and the Company does not reasonably believe it
can obtain a waiver or the Company does not intend to seek a waiver
of such restrictions) or the Company is legally restricted under
the Delaware General Corporation Law from fully exercising its
rights under this Section 3(c), the Company shall promptly so
notify the Selling Stockholder in writing. Otherwise, upon receipt
of the Stockholder’s Notice, the Company shall, subject to
Section 3(c)(iii) below, have the irrevocable and exclusive
option to purchase all or any portion of the First Refusal Shares
by delivery of a written notice to the Selling Stockholder, within
ten (10) business days of its receipt of the
Stockholder’s Notice, of its election to exercise its option
under this Section 3(c)(ii) and the number of shares it is
willing to purchase. To the extent the Company does not elect to
purchase all of the First Refusal Shares or the Company does not
respond to the Stockholder’s Notice within such ten
(10) business day period or the Selling Stockholder receives
the notice from the Company referred to in the first sentence of
this Section 3(c)(ii), the Selling Stockholder shall notify
the Preferred Stockholders of the number of First Refusal Shares
that remain eligible for purchase, and the Preferred Stockholders
shall, subject to Section 3(c)(iii) below, have the
irrevocable and exclusive option to purchase all or any portion of
the remaining First Refusal Shares at the Sale Price by delivery of
written notice to the Selling Stockholder and the Company of their
election to exercise their option under this Section 3(c)(ii)
(any such holder exercising this election, a “ First
Refusal Participant ”) and the maximum number of shares
(up to that portion of such First Refusal Shares that equals the
proportion that the aggregate number of shares of Common Stock that
were issued and/or are issuable upon conversion of the Preferred
Stock held by a First Refusal Participant (plus the aggregate
number of other shares of Common Stock held by such holder if the
First Refusal Participant is West Central or a member of the USBG
Group) bears to the sum of the total number of shares of Common
Stock that were issued or are issuable upon conversion of all of
the issued and outstanding shares of Preferred Stock and the number
of other shares of Common Stock held by West Central and the
members of the USBG Group, in each case excluding any such shares
held by the Selling Stockholder) that they are willing to purchase,
as well as the number of additional shares that such holder desires
to purchase in the event all of the remaining First Refusal Shares
not elected to be purchased by the other Preferred Stockholders
which shall be allocated on a pro rata basis (calculated in a
similar manner as described in the preceding sentence, and
continuing in a like manner until the First Refusal Participants
have purchased all of the First Refusal Shares as they may elect).
Within thirty (30) days of receipt of the Stockholder’s
Notice, the First Refusal Participants shall deliver to the Selling
Stockholder a written notice of their election to purchase any
remaining First Refusal Shares.
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(iii) The Company and the First
Refusal Participants shall deliver the Sale Price for any First
Refusal Shares that any such party elects to purchase to the
Selling Stockholder no later than sixty (60) days after
receipt of the Stockholder’s Notice, unless the
Stockholder’s Notice contemplated a later closing with the
Proposed Transferee. In the event the Company and the First Refusal
Participants, taken together, do not elect to purchase all of the
First Refusal Shares pursuant to Section 3(c)(ii), then the
Selling Stockholder shall be free for a period of one hundred and
twenty (120) days from the date of the Stockholder’s
Notice, to sell the remaining First Refusal Shares to the Proposed
Transferee, at a price equal to or greater than the Sale Price and
upon other terms no more favorable to the Proposed Transferee than
those specified in the Stockholder’s Notice. Any transfer of
the First Refusal Shares by the Selling Stockholder after the end
of such 120-day period or at a price lower than the Sale Price or
on more favorable terms of the sale than set forth in the
Stockholder’s Notice shall require a new notice of intent to
transfer to be delivered to the Company and the Preferred
Stockholders and shall give rise anew to the rights provided in the
preceding paragraphs.
(iv) If the Company and/or the First
Refusal Participants elect to purchase First Refusal Shares
mentioned in the Stockholder’s Notice, the Company and/or the
First Refusal Participants, as applicable, shall ha
