EXHIBIT 10.2
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (this "Agreement") is made and entered into
as of the 27th day of August, 1997, by and between XXXXXX XXXXXXX MIDLAND
COMPANY, a Delaware business corporation ("ADM"), and MINNESOTA CORN PROCESSORS,
INC., a Minnesota cooperative corporation ("MCP").
WHEREAS, the parties to this Agreement have entered into a Transaction
Agreement dated as of July 9, 1997 (the "Transaction Agreement"), pursuant to
which ADM will acquire an equity stake (in the form of ADM Units, as such term
is defined in the Transaction Agreement) in MCP; and
WHEREAS, the conclusion of this Agreement is a condition precedent to
the obligations of the parties to consummate the issuance and acquisition of the
ADM Units under the Transaction Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the covenants
of the parties set forth herein, the parties hereby covenant and agree as
follows:
1. Rights and Obligations of ADM. By virtue of its holding of the ADM
Units, ADM shall:
(a) From and after October 1, 1997, have rights and obligations to
deliver corn to MCP on the same basis as members of MCP,
including (i) the right to satisfy its delivery obligations by
participating in the Growers Procurement Agency, and (ii) the
right to have a pro rata portion of the annual savings of MCP
allocated to ADM according to the Articles of Incorporation
and Bylaws of MCP; and
(b) Take into income any distributions with respect to MCP's
patronage which are made in the form of written notices of
allocation (as defined in 26 U.S.C. ss. 1388 (1994)), as
required by 26 U.S.C. ss. 1385(a) (1994); and
(c) Be treated by MCP for all other purposes as a non-member
patron of MCP.
2. Restrictions on MCP. MCP shall not, without the prior consent of
ADM:
(a) Make any material change in the principal businesses of MCP; or
(b) Sell, lease, liquidate, exchange, dispose of or otherwise
transfer substantially all of the assets of MCP; or
(c) Amend Article VI of MCP's Second Amended and Restated Articles
of Incorporation (which relates to the ADM Units) or Article
VII of MCP's Amended and Restated Bylaws (which relates to
allocation of annual savings) in any manner inconsistent with
this Agreement or the rights of ADM as holder of ADM Units as
contemplated herein; or
(d) Make any material changes to MCP's corn delivery program
applicable to MCP's members and ADM; or
(e) Embark upon any capital expenditure project that would involve
the expenditure by MCP of any amount in excess of Two Hundred
and Fifty Thousand Dollars ($250,000.00).
ADM shall not unreasonably withhold any consent required of it pursuant to this
paragraph 2. For purposes of assessing the reasonableness of the withholding by
ADM of consent hereunder, reference shall be made to the viewpoint of a lender
or passive investor that occupies the position of sole holder of the ADM
Preferred Equity Units.
3. Corn Delivery Program. MCP and ADM shall use all reasonable efforts
to reach mutual agreement from time to time concerning changes to MCP's corn
delivery program applicable to MCP's members and ADM, with a view to enhancing
the economic impact of the corn delivery program on MCP's equity holders, taking
into account MCP's corn procurement costs as well as the tax effects of the corn
delivery program.
4. Maintenance of Proportionate Equity of ADM Units. In the event MCP
proposes to issue any additional Units of Equity Participation, MCP shall invite
ADM to indicate its interest in purchasing such number of additional ADM Units
as would permit ADM to maintain at a constant level its percentage of the total
participating equity of ADM. Such indication of interest on the part of ADM
shall be given within seven (7) days of MCP's invitation, and shall not be
binding on either party. In the event that the proposed issuance of additional
Units of Equity Participation takes place, and if ADM has previously indicated
an interest in participating as hereinbefore described, then ADM shall be
permitted to purchase such number of additional ADM Units as would permit it to
maintain its percentage of the total participating equity of ADM at a level
equal to that prior to such additional issuance of Units of Equity
Participation. For purposes of this Section 4, Units of Equity Participation
that are redeemed by MCP from terminated or defaulting members of MCP shall be
treated as outstanding while held by MCP after such redemption and shall not be
treated as "additional Units of Equity Participation" hereunder upon re-issuance
(or proposed re-issuance) to MCP members thereafter.
5. Term and Termination. This Agreement shall enter into force as of
the date hereof and shall terminate upon mutual agreement of the parties.
6. Miscellaneous.
6.1 This Agreement shall be governed in all respects by the laws of the
State of Minnesota, excluding its conflicts of laws rules.
6.2 Neither party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the prior written consent of
the other party (which consent may be withheld at such other party's sole
discretion).
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6.3 All notices hereunder shall be served as provided in Section 7.8 of
the Transaction Agreement.
6.4 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
6.5 The paragraph headings in this Agreement are for convenience only
and shall not affect the meaning or construction of this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first written above.
XXXXXX XXXXXXX MIDLAND COMPANY MINNESOTA CORN PROCESSORS, INC.
By: /s/ (illegible) By: /s/ L. Xxxxxx Xxxxxxxx
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Its: President & Chief Executive Officer Its: President
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