1
EXECUTION COPY
TRANSACTION AGREEMENT
DATED AS OF OCTOBER 21, 1998
AMONG
ARANCIA INDUSTRIAL, S.A. DE C.V.,
PROMOCIONES INDUSTRIALES ARALIA, S.A. DE C.V.,
AND
CORN PRODUCTS INTERNATIONAL, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I................................................................... 2
DEFINITIONS AND INTERPRETATION.............................................. 2
1.1. Definitions...................................................... 2
1.2. Interpretation................................................... 10
ARTICLE II.................................................................. 10
PURCHASE AND SALE OF SHARES; PURCHASE PRICE................................. 10
2.1. Purchase and Sale of Shares...................................... 10
2.2. Purchase Price................................................... 11
ARTICLE III................................................................. 12
CLOSING AND PURCHASE PRICE ADJUSTMENT....................................... 12
3.1. Closing Date..................................................... 12
3.2. Payment of Purchase Price; Delivery of Shares.................... 13
3.3. Corn Products' Additional Deliveries............................. 15
3.4. Parent Companies' Additional Deliveries.......................... 17
3.5. Purchase Price Adjustment For Earnout............................ 18
ARTICLE IV.................................................................. 20
REPRESENTATIONS AND WARRANTIES OF THE PARENT COMPANIES...................... 20
4.1. Due Incorporation................................................ 20
4.2. Due Authorization................................................ 20
4.3. Enforceability................................................... 21
4.4. No Conflict...................................................... 21
4.5. Authorized and Issued Capital.................................... 22
4.6. No Subsidiaries.................................................. 22
4.7. Title to Shares.................................................. 22
4.8. No Options....................................................... 22
4.9. Proceedings Pertaining to Shares................................. 22
4.10. Corporate Records............................................... 23
4.11. Financial Statements............................................ 23
4.12. Liabilities..................................................... 23
4.13. Property........................................................ 23
4.14. Condition....................................................... 24
4.15. Intellectual Property Rights.................................... 24
4.16. Product Liability............................................... 24
4.17. Insurance....................................................... 25
4.18. Bank Accounts; Powers of Attorney............................... 25
4.19. Litigation...................................................... 25
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4.20. No Default Under Material Contracts............................. 25
4.21A. Aracorn Tax Matters............................................ 26
4.21B. Poliecsa and Joint Venture Tax Matters......................... 26
4.22. Employee Matters................................................ 27
4.23. Benefit Plans................................................... 27
4.24. Compliance with Laws............................................ 28
4.25. Compliance with Environmental Laws.............................. 28
4.26. Licenses and Permits............................................ 28
4.27. Ordinary Course................................................. 28
4.28. Stand Alone..................................................... 29
4.29. Copies.......................................................... 29
4.30. Relationships with Affiliates................................... 29
4.31. Investment Representation....................................... 29
4.32. U.S. Antitrust Compliance....................................... 29
4.33. No Finder....................................................... 30
4.34. No Other Representations........................................ 30
ARTICLE V................................................................... 30
REPRESENTATIONS AND WARRANTIES OF CORN PRODUCTS............................. 30
5.1. Due Incorporation................................................ 30
5.2. Due Authorization................................................ 30
5.3. Enforceability................................................... 31
5.4. No Conflict...................................................... 31
5.5. Investment Representation........................................ 31
5.6. Consideration Shares............................................. 32
5.7. No Finder........................................................ 32
5.8. SEC Reports...................................................... 32
5.9. Financial Statements............................................. 32
5.10. Litigation...................................................... 32
5.11. Subsequent Liabilities.......................................... 33
5.12. No Other Representations........................................ 33
ARTICLE VI.................................................................. 33
ACTION PRIOR TO THE CLOSING DATES........................................... 33
6.1. Examination of Corn Products and the Companies................... 33
6.2. Preserve Accuracy of Representations and Warranties.............. 34
6.3. Consents of Third Parties; Governmental Approvals................ 34
6.4. Operations Prior to the Initial Closing Date and the
Transfer of Aracorn Shares...................................... 35
6.5. Notification by Parent Companies of Certain Matters.............. 36
6.6. Mexican Regulatory Compliance.................................... 36
6.7. Insurance........................................................ 37
6.8. Facilitation of Closings......................................... 37
6.9. U.S. Antitrust Law Compliance.................................... 37
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ARTICLE VII................................................................. 37
ADDITIONAL AGREEMENTS....................................................... 37
7.1. Confidential Nature of Information................................ 38
7.2. No Public Announcement............................................ 38
7.3. Expenses.......................................................... 38
7.4. Further Assurances................................................ 38
7.5. Termination of Joint Ownership Agreement.......................... 38
7.6. Dividends......................................................... 38
7.7. Amendment to Confidentiality Agreement............................ 39
ARTICLE VIII................................................................ 39
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES.............................. 39
8.1. Conditions to the Initial Closing................................. 39
8.2. Conditions to the First Put Closing............................... 41
8.3. Conditions to the Second Put Closing.............................. 42
ARTICLE IX.................................................................. 43
INDEMNIFICATION............................................................. 43
9.1. Indemnification by Parent Companies............................... 43
9.2. Indemnification by Corn Products.................................. 43
9.3. Limitation on Indemnification..................................... 44
9.4. Notification of Claims............................................ 44
9.5. Defense of Claims................................................. 44
9.6. Exclusive Remedy.................................................. 46
9.7. Waiver of Claims.................................................. 46
9.8. Available Claims.................................................. 46
ARTICLE X................................................................... 46
TERMINATION................................................................. 46
10.1. Termination...................................................... 46
10.2. Notice of Termination............................................ 47
10.3. Effect of Termination............................................ 47
ARTICLE XI.................................................................. 47
GENERAL PROVISIONS.......................................................... 47
11.1. Survival of Obligations.......................................... 47
11.2. Notices.......................................................... 47
11.3. Language......................................................... 48
11.4. Successors and Assigns........................................... 49
11.5. Amendments....................................................... 49
11.6 Disclaimer of Warranties......................................... 49
11.7. Waivers.......................................................... 49
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11.8. Severability.................................................... 49
11.9. Execution in Counterparts....................................... 50
11.10. Governing Law................................................... 50
11.11. Submission to Jurisdiction...................................... 50
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EXHIBITS
A Opinion of Counsel to Corn Products
B Corporate Name License Agreement
C Non-Competition Agreement
D Stockholder Agreement
E Opinion of Counsel to Parent Companies
F Amended and Restated Bylaws of Joint Venture
SCHEDULES
1.1A Arancia Entities
1.1B Knowledge
3.3 Individuals Entering into Non-Competition Agreements
3.4 Resignations
3.5(g) Earnout Payment Example
4.4 No Conflict
4.5 Authorized and Issued Capital
4.6 No Subsidiaries
4.10 Corporate Records
4.11(a) Parent Companies Financial Statements
4.11(b) Companies Financial Statements
4.12(a) Aracorn Liabilities
4.12(b) Poliecsa Liabilities
4.13 Property
4.14(a) Condition
4.15 Intellectual Property Rights
4.16 Inventories and Product Liability
4.17 Insurance
4.18 Bank Accounts; Powers of Attorney
4.19 Litigation
4.20 No Default Under Material Contracts
4.21A Aracorn Tax Matters
4.21B Poliecsa Tax Matters
4.22 Employee Matters
4.23 Benefit Plans
4.24 Compliance with Laws
4.25 Compliance with Environmental Laws
4.27 Ordinary Course
4.28 Stand Alone
4.30 Relationships with Affiliates
4.33 No Finder
5.4 No Conflict
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5.7 No Finder
5.10(b) Litigation
5.11 Subsequent Liabilities
6.4 Transferable Employees
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TRANSACTION AGREEMENT
TRANSACTION AGREEMENT, dated as of October 21, 1998 (the "Agreement"),
among Corn Products International, Inc., a Delaware corporation ("Corn
Products"), Promociones Industriales Aralia, S.A. de C.V., a corporation
organized and existing under the laws of the Republic of Mexico ("Aralia") and
Arancia Industrial, S.A. de C.V., a corporation organized and existing under the
laws of the Republic of Mexico ("Arinsa" and, together with Aralia, the "Parent
Companies").
PRELIMINARY STATEMENT
WHEREAS, (i) CPC International, Inc., the predecessor of Corn Products
("CPC"), (ii) Productos de Maiz, S.A. de C.V., a corporation organized and
existing under the laws of the Republic of Mexico ("PM"), (iii) Arinsa, (iv)
Arancia Productos Industriales, S.A. de C.V., a corporation organized and
existing under the laws of the Republic of Mexico ("Apisa"), (v) Arancia, S.A.
de C.V., a corporation organized and existing under the laws of the Republic of
Mexico ("Arancia"), and (vi) the following real estate companies: (1)
Inmobiliaria Zuri, S.A. de C.V., (2) Arrendadora Gefemesa, S.A. de C.V., (3)
Inmobiliaria la Gloria, S.A. de C.V., (4) Arrendadora la Gloria, S.A. de C.V.,
and (5) Arrendadora del Roble, S.A. de C.V., each organized and existing under
the laws of the Republic of Mexico (together with Apisa and Arancia, the
"Arancia Companies"), entered into that certain Joint Ownership Agreement dated
October 12, 1994 (the "Joint Ownership Agreement").
WHEREAS, on November 1, 1994, prior to the closing of the transactions
contemplated by the Joint Ownership Agreement, PM transferred its consumer
products and modified starch businesses to wholly-owned subsidiaries of CPC and
changed its corporate name to CPC Industrial, S.A. de C.V. and on September 1,
1995, again changed its corporate name to Arancia-CPC, S.A. de C.V.
WHEREAS, on January 1, 1996, all of the Arancia Companies, other than
Arrendadora Gefemesa, S.A. de C.V., merged with and into Arancia - CPC S.A. de
C.V. (the "Joint Venture").
WHEREAS, Aracorn S.A. de C.V., a corporation organized under the laws of
the Republic of Mexico ("Aracorn"), was spun-off from Arinsa, which spin-off
was effective as of July 31, 1998.
WHEREAS, Aralia is owner, beneficially and of record, of all (except
thirty-two) of the issued and outstanding capital stock of Aracorn S.A. de C.V.
and Arinsa is owner, beneficially and of record of (a) 100,000 shares (the
"Arinsa JV Shares") of capital stock of the Joint Venture, and (b) 2,201,205
shares (the "Poliecsa Shares") of capital stock of Poliquimicos del Ecuador,
S.A., a corporation organized under the laws of the Republic of Ecuador
("Poliecsa" and, together with Aracorn and the Joint Venture, the "Companies").
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WHEREAS, Aralia desires to sell to Corn Products, and Corn Products desires
to purchase from Aralia, forty-nine percent of the outstanding capital stock of
Aracorn represented by 110,079,250 shares, including the thirty-two shares not
held of record by Aralia (the "Aracorn Minority Shares"), on the terms and
subject to the conditions set forth herein.
WHEREAS, Corn Products desires to grant to Aralia, and Aralia desires to
have, an option to sell the remaining fifty-one percent of the outstanding
capital stock of Aracorn to Corn Products on the terms and subject to the
conditions set forth herein.
WHEREAS, Arinsa desires to sell to Corn Products, and Corn Products desires
to purchase from Arinsa, (a) the Arinsa JV Shares and (b) the Poliecsa Shares,
on the terms and subject to the conditions set forth herein.
Accordingly, in consideration of the mutual agreements hereinafter set
forth, Corn Products and the Parent Companies agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. In this Agreement, the following terms have the
meanings specified or referred to in this Section 1.1 and shall be equally
applicable to both the singular and plural forms.
"24.4% SHARES" has the meaning specified in Section 2.1(c).
"26.6% SHARES" has the meaning specified in Section 2.1(b).
"ACCOUNTING PRINCIPLES" Wherever in this Agreement reference is made to
Accounting Principles, any such reference with respect to the Parent Companies,
the Joint Venture or Aracorn shall be deemed to be the generally accepted
accounting principles from time to time approved by the Mexican Institute of
Chartered Accountants (Instituto Mexicano de Contadores Publicos), any such
reference with respect to Poliecsa shall be deemed to be the generally accepted
accounting principles in general usage in the Republic of Ecuador, and any such
reference to Corn Products shall be deemed to be United States generally
accepted accounting principles.
"AFFILIATE" means with respect to any Person, any other Person or
Individual which directly or indirectly controls, is controlled by or is under
common control with such Person. In addition to the foregoing, as used in the
definition of "Arancia Entity," the term "Affiliate" shall include, with respect
to any Individual, any present or future child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, brother-in-law, sister-in-law, mother-
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in-law, father-in-law, son-in-law, daughter-in-law of such Individual, and shall
include adoptive relationships. For the avoidance of doubt, the Parties
acknowledge that (i) Corn Products, on the one hand, and the Arancia Entities,
on the other hand, shall not be considered "Affiliates" of each other, (ii) the
Companies and their Subsidiaries shall not be considered "Affiliates" of the
Parent Companies at any time, and (iii) the Companies and their Subsidiaries
shall be considered "Affiliates" of Corn Products following the Initial Closing.
"AGREED RATE" means the rate calculated from time to time pursuant to the
term "Base Rate," as such term is defined, without giving effect to any
amendments, in the U.S.$340,000,000 5-Year Revolving Credit Agreement dated as
of December 17, 1997 among Corn Products, the Lenders named therein, Citibank,
N.A., as Administrative Agent, Citicorp Securities, Inc. as Arranger, The First
National Bank of Chicago, as Documentation Agent, The Chase Manhattan Bank, as
Co-Agent and CPC International Inc., as Interim Guarantor, whether or not such
agreement thereafter remains in effect. Except as otherwise provided herein,
interest calculations based on the Agreed Rate shall be computed based on
quarterly compounding.
"AGREEMENT" has the meaning specified in the first paragraph of this
Agreement.
"ANNUAL GOALS" has the meaning specified in Section 3.5 (b).
"APISA" has the meaning specified in the second paragraph of this
Agreement.
"ARACORN" has the meaning specified in the fifth paragraph of this
Agreement.
"ARACORN MINORITY SHARES" has the meaning specified in the seventh
paragraph of this Agreement.
"ARALIA" has the meaning specified in the first paragraph of this
Agreement.
"ARANCIA" has the meaning specified in the second paragraph of this
Agreement.
"ARANCIA COMPANIES" has the meaning specified in the second paragraph of
this Agreement, and "ARANCIA COMPANY" means any one of them.
"ARANCIA ENTITY" means those Persons and Individuals set forth on Schedule
1.1A and any Persons or Individuals who are, from time to time, Affiliates or
Subsidiaries of any Arancia Entity.
"ARINSA" has the meaning specified in the first paragraph of this
Agreement.
"ARINSA JV SHARE PURCHASE PRICE" has the meaning specified in Section
2.2(b).
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"ARINSA JV SHARES" has the meaning specified in the sixth paragraph of this
Agreement.
"BANKRUPTCY" means the rendering of a ruling or an order by a court of
competent jurisdiction declaring a Person or Individual bankrupt or naming a
trustee to its goods; or the rendering of a ruling by a court of competent
jurisdiction or the passing of a resolution for the liquidation or the
dissolution of a Person's or Individual's enterprise or affairs or the filing by
a Person or Individual of procedures to be declared voluntarily bankrupt or the
assignment of its goods for the benefit of its creditors; or the loss, by a
Person or Individual, in the hands of a creditor, of the enjoyment of its goods
or a substantial part thereof, unless this Person or Individual contests in good
faith the right of such creditor to seize its goods within 10 days of such loss
before the competent authorities and the creditor does not prevail.
"BENEFIT PLANS" means all pension, retirement, bonus, profit sharing,
compensation, incentive, stock purchase, stock option, savings, stock
appreciation, phantom stock, severance, change-of-control, savings, thrift,
insurance, medical, hospitalization, disability, death, and other similar plans,
programs, arrangements or practices applicable to any or all of the past or
present shareholders, directors, officers, employees, or agents of the Person in
question; and "BENEFIT PLAN" means any one of them.
"BUSINESS" means the following activities: corn wet milling processing,
manufacturing, marketing, distribution, sales and trading of all types of
products derived from the corn wet milling process, such as, but not limited to,
all types of starches, modified corn starch, corn syrups, syrup blends, fructose
sweeteners, caramel colors, maltrodextrins, dextroses, sorbitols, gluten meal,
gluten feed and corn germ meal, corn germ, corn oil, ethanol, citric acid, and
lactic acid. The aforesaid products covered by this Agreement will not be
limited to regular corn derivatives, but will also include starches derived from
any other agricultural products such as, but not limited to: waxy corn, sorghum,
high amylose corn, potato, wheat, and tapioca, and their derivatives
independently of the industrial process employed to produce them.
"BUSINESS DAY" shall mean any day on which the principal commercial banks
located in Mexico City, Mexico and New York, New York, United States of America
are open for business during normal banking hours.
"COMMISSION" shall mean the United States Securities and Exchange
Commission.
"COMPANIES" has the meaning specified in the sixth paragraph of this
Agreement, and "COMPANY" means any one of them.
"COMPANY AGREEMENTS" has the meaning specified in Section 4.20.
"COMPOSITE BONUS PERCENTAGE" has the meaning specified in Section 3.5(b).
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"CONFIDENTIALITY AGREEMENT" has the meaning specified in Section 6.1.
"CONSIDERATION SHARES" means shares of Corn Products Common Stock delivered
pursuant to Section 2.2(a)(ii) plus the Optional Shares, if any.
"CORN PRODUCTS" has the meaning specified in the first paragraph of this
Agreement.
"CORN PRODUCTS ANCILLARY AGREEMENTS" means all agreements, instruments and
documents being or to be executed and delivered by Corn Products to the Parent
Companies on the date hereof, or otherwise pursuant to this Agreement.
"CORN PRODUCTS CHANGE IN CONTROL" shall be deemed to have occurred when, as
the result of a transaction or a series of related transactions (including any
proxy contests): (a) Individuals who constitute the Board of Directors of Corn
Products immediately prior to such transactions or series of related
transactions (including any proxy contests) constitute less than 50% of the
Board of Directors of Corn Products, (b) the stockholders of Corn Products
immediately prior to such transaction or series of related transactions own
beneficially less than 50% of the issued and outstanding Voting Securities of
Corn Products or (c) all or substantially all of the assets of Corn Products are
transferred pursuant to Section 11.4(b) unless after such transaction at least
50% of the Individuals who constitute the Board of Directors of the transferee
were members of the Corn Products Board of Directors immediately prior to such
transaction and at least 50% of the issued and outstanding Voting Stock of the
transferee is held by stockholders of Corn Products immediately prior to the
transaction.
"CORN PRODUCTS COMMON STOCK" has the meaning specified in Section 2.2(a).
"CORN PRODUCTS GROUP MEMBER" means Corn Products, the Companies and their
Subsidiaries and any Affiliates of Corn Products and their respective successors
and assigns.
"CORN PRODUCTS SEC DOCUMENTS" has the meaning specified in Section 5.8.
"CPC" has the meaning specified in the second paragraph of this Agreement.
"EARNOUT NOTICE" has the meaning specified in Section 3.5(a).
"EARNOUT PAYMENT" has the meaning specified in Section 3.5(a).
"EARNOUT YEAR" means any of the twelve-month periods ending December 31,
2000, December 31, 2001, and December 31, 2002.
"ENVIRONMENTAL LAW" means all Laws relating to or addressing the
environment, health or safety.
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"EXCHANGE ACT" shall mean the United States Securities Exchange Act of
1934, as amended.
"FAIR MARKET VALUE" has the meaning specified in Section 2.2(f).
"FINANCIAL STATEMENTS" means a balance sheet and income statement for the
year ended December 31, 1997 and unaudited balance sheet and income statement
for the nine-month period ended September 30, 1998 or the latest available
quarterly period, including, in the case of year end financial statements, the
appropriate notes thereto. In the case of Aracorn, "Financial Statements" means
an unaudited balance sheet as of September 30, 1998 and an income statement from
inception through September 30, 1998.
"FIRST PUT CLOSING" means the closing of the transfer of the 26.6% Shares
from Aralia to Corn Products or its designated Affiliate pursuant to the First
Put Exercise Notice.
"FIRST PUT CLOSING DATE" has the meaning specified in Section 3.1(b).
"FIRST PUT EXERCISE NOTICE" has the meaning specified in Section 2.1(b).
"FIRST PUT PURCHASE PRICE" has the meaning specified in Section 2.2(d).
"GOVERNMENTAL BODY" means: (i) any national, federal, provincial, state,
municipal or other government or body; (ii) any multinational, multilateral or
international body; (iii) any subdivision, ministry, department, secretariat,
bureau, agency, commission, board, instrumentality or authority of any of the
foregoing governments or bodies; (iv) any administrative agency or
quasi-governmental or private body exercising any regulatory, expropriation or
taxing authority under or for the account of any of the foreign governments or
bodies; or (v) any national, international, multilateral or multinational
judicial, quasi-judicial, arbitration or administrative court, tribunal, grand
jury, commission, board or panel.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"INDEMNIFIED PARTY" has the meaning specified in Section 9.5(a).
"INDEMNIFYING PARTY" has the meaning specified in Section 9.5(a).
"INDIVIDUAL" means a physical person.
"INITIAL CLOSING" means the closing of the transfer of the Aracorn Minority
Shares, the Arinsa JV Shares and the Poliecsa Shares from the Parent Companies
to Corn Products.
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"INITIAL CLOSING DATE" has the meaning specified in Section 3.1(a).
"INTELLECTUAL PROPERTY RIGHTS" means (i) all patents, trademarks, trade
names, service marks, copyrights, industrial designs, trade secrets, processes,
inventions, know-how, recipes, technology, software, formulas, franchises,
licenses, right-to-use, drawings, specifications for products, materials and
equipment, process development, manufacturing information, quality control
information, performance data, policy or procedure manuals, plant service
information and other intellectual property, and (ii) all registrations and
applications for registration of intellectual property, in each case used or
held for use in connection with the Business of any of the Companies, and
"INTELLECTUAL PROPERTY RIGHT" means any one of them; provided however, that, in
no case shall the term Intellectual Property Rights include intellectual
property rights (A) in the form of software that is available in consumer retail
stores or is available "off-the-shelf" and is subject to "shrink wrap" or "box
top" license agreements, or (B) licensed or otherwise made available by Corn
Products to any of the Companies.
"JOINT OWNERSHIP AGREEMENT" has the meaning specified in the second
paragraph of this Agreement.
"JOINT VENTURE" has the meaning specified in the fourth paragraph of this
Agreement.
"JVA ANCILLARY AGREEMENTS" means the Arinsa Trademark License and
Technology Agreement dated November 1, 1994 between Arancia Industrial, S.A. de
C.V. and CPC Industrial, S.A. de C.V., the Arinsa Trademark License and
Technology Agreement dated November 1, 1994 between Arinsa and Arancia, the CPC
Technology and Trademark License Agreement dated November 1, 1994 between Corn
Products and CPC Industrial, S.A. de C.V. and the CPC Technology and Trademark
License Agreement dated November 1, 1994 between Corn Products and Arancia.
"KNOWLEDGE" shall mean, with respect to the Parent Companies, actual
knowledge of any Individual listed on Schedule 1.1B hereto.
"LAWS" means: (i) all constitutions, treaties, laws, statutes, codes,
ordinances, orders, decrees, rules, regulations, and municipal by-laws, whether
domestic, foreign or international; (ii) all judgments, orders, writs,
injunctions, decisions, rulings, regulations, notices, administrative
pronouncements, interpretations, decrees, and awards of any Governmental Body;
and (iii) all provisions of the foregoing; in each case binding on or affecting
the Party or Person, or the property thereof, referred to in the context in
which such word is used; and "LAW" means any one of them; for greater certainty
the words "LAWS" and "LAW" shall include Laws relating in whole or in part to
the environment and its protection.
"LIENS" mans (i) all hypothecations, mortgages, pledges, liens, security
interests, transfers of property in stock, servitudes, easements, conditional
sale contracts, ownership or title
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retention agreements, occupation rights, encroachments, restrictive covenants,
title defects and other encumbrances or rights of others of any nature
whatsoever or however arising; and (ii) any arrangement or condition that in
substance secures payment or performance of an obligation; and a "LIEN" means
any one of them.
"LOSSES" has the meaning specified in Section 9.1.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the business,
assets or results of operations of (a) in the case of the Companies, the
Companies and their Subsidiaries, taken as whole, except any such effect
resulting from or arising in connection with (i) this Agreement or the
transaction contemplated hereby, (ii) changes or conditions affecting the
corn-milling industry generally, (iii) economic conditions in the United States
or Mexico generally, (iv) any action by Corn Products or any of its Affiliates,
or (v) any inaction by Corn Products or any of its Affiliates not taken in good
faith and, (b) in the case of Corn Products, Corn Products and its Subsidiaries,
taken as a whole, except any such effect resulting from or arising in connection
with (i) this Agreement or the transactions contemplated hereby, (ii) changes or
conditions affecting the corn-milling industry generally or (iii) economic
conditions in the United States or Mexico generally.
"MINORITY SHARE PURCHASE PRICE" has the meaning specified in Section 2.2.
"OPTIONAL SHARES" has the meaning specified in Section 2.2(f).
"PARENT COMPANIES" has the meaning specified in the first paragraph of
this Agreement.
"PARENT COMPANY ANCILLARY AGREEMENTS" means all agreements, instruments and
documents being or to be executed and delivered by either of the Parent
Companies to Corn Products on the date hereof, or otherwise pursuant to this
Agreement.
"PARENT COMPANY GROUP MEMBER" means the Parent Companies and their
Affiliates, and their respective successors and assigns.
"PARTIES" means all of the parties hereto collectively; and a "PARTY" shall
mean any one of them.
"PERMITTED ENCUMBRANCES" means: (i) Liens arising solely by operation of
Law or of any employees for salary or wages earned but not yet due and payable;
(ii) Liens of workmen, suppliers of material, builders and architects, or
warehousemen's and carriers' Liens, or unregistrable Liens of unpaid vendors of
moveable property, arising solely by operation of Law in each case arising in
the ordinary course of business for charges which are earned but not yet due and
payable and (iii) Liens that neither detract from the value of, nor interfere
with the use or operation of, the applicable asset.
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"PERSON" means a corporation, company, limited liability company,
cooperative, partnership, trust, unincorporated association, entity with
juridical personality or Governmental Body, but shall not include any
Individual.
"PM" has the meaning specified in the second paragraph of this Agreement.
"POLIECSA" has the meaning specified in the sixth paragraph of this
Agreement.
"POLIECSA SHARE PURCHASE PRICE" has the meaning specified in Section
2.2(c).
"POLIECSA SHARES" has the meaning specified in the sixth paragraph of this
Agreement.
"SECOND PUT CLOSING" means the closing of the transfer of the 24.4% Shares
from Aralia to Corn Products or its designated Affiliate pursuant to the Second
Put Exercise Notice.
"SECOND PUT CLOSING DATE" has the meaning specified in Section 3.1(c).
"SECOND PUT EXERCISE NOTICE" has the meaning set forth in Section 2.1(c).
"SECOND PUT PURCHASE PRICE" has the meaning specified in Section 2.2(e).
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"SUBSIDIARY" means, with respect to any Person, any other Person which is
controlled by it or by one or more Persons each of which is controlled by it,
and for the purpose of this definition "CONTROL" means, with respect to any
Person, the ownership of more than 50% of the voting shares of the Person.
"TARGET AMOUNT" has the meaning specified in Section 3.5(a).
"TARGET BONUSES" has the meaning specified in Section 3.5(b).
"TAX" (and, with correlative meaning, "TAXES" and "TAXABLE") means any
taxes, charges, fees, levies, contributions or other assessments or
reassessments imposed or administered by any Taxing Authority, including all net
income, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, trade, franchise, privilege, profits, license, withholding, payroll,
employment, profit sharing, social security, housing fund, retirement savings
systems, excise, estimated, severance, stamp, occupation, property, assets or
other taxes, customs, duties, fees, assessments or charges of any kind
whatsoever, together with any interest, penalties, additions to tax or
additional amounts imposed thereon or with respect thereto.
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"TAXING AUTHORITY" means any Governmental Body having or exercising any
authority to assess, impose or collect Taxes of any kind.
"TAX RETURN" means all returns (including amended returns and estimated Tax
returns), Dictamen Fiscal, declarations, reports, schedules, information
returns, statements or other documents, any amendments thereto and any related
or supporting information filed or required to be filed, with respect to Taxes.
"TAX SHARING ARRANGEMENT" means any written or unwritten agreement or
arrangement for the allocation or payment of Tax liabilities or payment for Tax
benefits with respect to a consolidated, combined or unitary Tax Return which
Tax Return includes any Company or any Subsidiary of a Company.
"VOTING SECURITIES" means any securities entitled to vote in the election
of directors generally, securities convertible or exchangeable into or
exchangeable for such securities and any rights or options to acquire any such
securities.
1.2. INTERPRETATION. As used in this Agreement, the word "including"
means without limitation, the word "or" is not exclusive and the words "herein",
"hereof", "hereby", "hereto" and "hereunder" refer to this Agreement as a whole.
Unless the context otherwise requires, references herein: (i) to Articles,
Sections, Exhibits and Schedules mean the Articles and Sections of and the
Exhibits and Schedules attached to this Agreement; (ii) to an agreement,
instrument or other document means such agreement, instrument or other document
as amended, supplemented and modified from time to time to the extent permitted
by the provisions thereof and by this Agreement; and (iii) except with respect
to Articles IV and V hereof, to a statute means such statute as amended from
time to time and includes any successor legislation thereto. The Schedules and
Exhibits referred to herein shall be construed with and as an integral part of
this Agreement to the same extent as if they were set forth verbatim herein.
Titles to Articles and headings of Sections are inserted for convenience of
reference only and shall not be deemed a part of or to affect meaning or
interpretation of this Agreement.
ARTICLE II
PURCHASE AND SALE OF SHARES; PURCHASE PRICE
2.1. PURCHASE AND SALE OF SHARES. (a) Upon the terms and subject to the
conditions of this Agreement, on the Initial Closing Date, (i) Arinsa shall
sell, transfer, assign, convey and deliver to Corn Products, free and clear of
all Liens, and Corn Products shall purchase from Arinsa, the Arinsa JV Shares,
(ii) Aralia shall sell, transfer, assign, convey and deliver, or cause to be
sold, transferred, assigned, conveyed and delivered, to Corn Products, free and
clear of all Liens, and Corn Products shall purchase from Aralia, the Aracorn
Minority Shares and (iii)
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Arinsa shall sell, transfer, assign, convey and deliver to Corn Products, free
and clear from all Liens, and Corn Products shall purchase from Arinsa, the
Poliecsa Shares.
(b) At the option of Aralia, exercised by written notice (the "First Put
Exercise Notice") delivered to Corn Products no later than two Business Days
prior to the First Put Closing Date, and upon the terms and subject to the
conditions of this Agreement, on the First Put Closing Date, Aralia shall sell,
transfer, assign, convey and deliver to Corn Products, free and clear of all
Liens, 59,757,307 shares of capital stock of Aracorn (the "26.6% Shares"), and
Corn Products shall purchase such 26.6% Shares from Aralia.
(c) At the option of Aralia, exercised by written notice (the "Second Put
Exercise Notice") delivered to Corn Products no later than December 1, 2003, and
upon the terms and subject to the conditions of this Agreement, on the Second
Put Closing Date, Aralia shall sell, transfer, assign, convey and deliver to
Corn Products, free and clear of all Liens, 54,814,973 shares of capital stock
of Aracorn (the "24.4% Shares") and Corn Products shall purchase such 24.4%
Shares from Aralia.
2.2. PURCHASE PRICE. (a) The purchase price for the Aracorn Minority
Shares (the "Minority Share Purchase Price") shall be (i) cash in the amount of
US$10,152,939, plus (ii) 1,764,706 shares of Common Stock, par value US$.01 per
share, of Corn Products ("Corn Products Common Stock"), plus (iii) amounts
payable pursuant to Section 3.5 hereof.
(b) The purchase price for the Arinsa JV Shares (the "Arinsa JV Share
Purchase Price") shall be cash in an amount of US$34,901,960.
(c) The purchase price for the Poliecsa Shares (the "Poliecsa Share
Purchase Price") shall be cash in the amount of US$2,000,000.
(d) The purchase price for the 26.6% Shares (the "First Put Purchase
Price") shall be, at Corn Products' option, either (i) cash in the amount equal
to US$38,043,141 plus the amount accrued thereon from the Initial Closing Date
to the First Put Closing Date at the Agreed Rate, or (ii) (A) cash in the amount
equal to US$18,043,141 plus the amount accrued thereon from the Initial Closing
Date to the First Put Closing Date at the Agreed Rate plus (B) a number of
shares of Corn Products Common Stock determined by dividing (1) US$20,000,000
plus the amount accrued thereon from the Initial Closing Date to the First Put
Closing Date at the Agreed Rate by (2) the average of the Fair Market Value of
Corn Products Common Stock for the twenty (20) trading days immediately prior to
the First Put Closing Date.
(e) The purchase price for the 24.4% Shares (the "Second Put Purchase
Price") shall be, at Corn Products' option, either (i) cash in the amount equal
to US$34,901,960 plus the amount accrued thereon from the Initial Closing Date
to the Second Put Closing Date at the Agreed Rate, subject to adjustment, if
any, pursuant to Section 7.6 hereof, or (ii) (A) cash in the amount equal to
US$24,901,960 plus the amount accrued thereon from the Initial Closing Date to
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the Second Put Closing Date at the Agreed Rate, subject to adjustment pursuant
to Section 7.6 hereof, plus (B) a number of shares of Corn Products Common Stock
determined by dividing (1) US$10,000,000 plus the amount accrued thereon from
the Initial Closing Date to the Second Put Closing Date at the Agreed Rate by
(2) the average of the Fair Market Value of Corn Products Common Stock for the
twenty (20) trading days immediately prior to the Second Put Closing Date.
(f) The term "Fair Market Value" means the closing sales price of Corn
Products Common Stock, on the applicable exchange if it is listed on a national
securities exchange, or if not, as reported on the Nasdaq National Market
System, or if there have been no sales on any such exchange or the Nasdaq
National Market System on any day, the average of the highest bid and lowest
asked prices at the end of such day. If Corn Products Common Stock is not
listed on any national securities exchange or the Nasdaq National Market System,
then Corn Products shall not have the option to pay any of the First Put
Purchase Price or the Second Put Purchase Price in shares of Corn Products
Common Stock. The term "Optional Shares" means any shares of Corn Products
Common Stock received by Aralia or its designee from Corn Products as partial
consideration for the purchase by Corn Products of the 26.6% Shares or the
24.4% Shares from Aralia.
ARTICLE III
CLOSING AND PURCHASE PRICE ADJUSTMENT
3.1. CLOSING DATE. (a) The Initial Closing shall take place on the third
Business Day after the conditions set forth in Section 8.1 have been satisfied
or waived, at the offices of Sidley & Austin, 875 Third Avenue, New York, New
York 10022 or at such other place or at such other time as shall be agreed upon
by Corn Products and the Parent Companies. The date on which the Initial
Closing is actually held is sometimes referred to herein as the "Initial Closing
Date."
(b) If the First Put Exercise Notice shall have been delivered by Aralia
as provided in Section 2.1(b), the First Put Closing shall take place on the
date that is 366 calendar days (or, if such day is not a Business Day, on the
immediately succeeding Business Day), after the Initial Closing Date at the
offices of Sidley & Austin, 875 Third Avenue, New York, New York 10022 or at
such other place or at such other time as shall be agreed upon by Corn Products
and Aralia. In the event that the First Put Closing cannot take place on the
date specified above solely because the conditions to such Closing have not been
satisfied, the date of such Closing shall be deferred for up to 120 days so long
as there exists a good faith expectation that such conditions will be satisfied
within such 120 day period and throughout such period the Parties shall use all
commercially reasonable efforts in accordance with Section 6.8(a) to consummate
such closing. The date on which the First Put Closing is actually held is
sometimes referred to herein as the "First Put Closing Date."
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(c) If the Second Put Exercise Notice shall have been delivered by Aralia
as provided in Section 2.1(c), the Second Put Closing shall take place on the
thirtieth day (or, if such day is not a Business Day, on the immediately
succeeding Business Day), after delivery of the Second Put Exercise Notice, at
the offices of Sidley & Austin, 875 Third Avenue, New York, New York 10022 or at
such other place or at such other time as shall be agreed upon by Corn Products
and Aralia. In no event shall the Second Put Closing take place unless the
transfer of the 26.6% Shares to Corn Products shall have occurred and, in any
event, the Second Put Closing shall not take place before the date that is
eighteen months after the Initial Closing Date or after December 31, 2003,
unless otherwise agreed by Corn Products and Aralia. In the event that the
Second Put Closing cannot take place on the date specified above solely because
the conditions to such Closing have not been satisfied, the date of such Closing
shall be deferred for up to 120 days so long as there exists a reasonable
expectation that such conditions will be satisfied within such 120 day period
and throughout such period the Parties shall use all commercially reasonable
efforts in accordance with Section 6.8(a) to consummate such closing. The time
and date on which the Second Put Closing is actually held are sometimes referred
to herein as the "Second Put Closing Date."
3.2. PAYMENT OF PURCHASE PRICE; DELIVERY OF SHARES.
(a) Subject to fulfillment or waiver of the conditions set forth in
Section 8.1 of the Transaction Agreement, at the Initial Closing:
(i) Corn Products shall:
(A) pay to Aralia the cash portion of the Minority Share
Purchase Price (other than amounts to be paid pursuant to Section
3.5) by wire transfer of immediately available funds to the account
in the United States or Mexico specified by Aralia in writing to
Corn Products at least two Business Days prior to the Initial
Closing;
(B) deliver to Aralia a stock certificate representing
1,764,706 shares of Corn Products Common Stock registered in the
name of Aralia or such other Arancia Entity as Aralia may specify in
writing at least two Business Days prior to the Initial Closing
Date; provided that if such shares are to be delivered to an Arancia
Entity other than Aralia, such Arancia Entity shall enter into an
agreement with Corn Products pursuant to which such Arancia Entity
agrees to be bound by Sections 2.2, 2.3, 3.4, 3.5 and 3.8 of the
Stockholder Agreement; and
(C) pay to Arinsa an amount equal to the sum of the Arinsa JV
Share Purchase Price plus the Poliecsa Share Purchase Price by wire
transfer of immediately available funds to the account in the United
States or Mexico specified by Arinsa in writing to Corn Products at
least two Business Days prior to the Initial Closing;
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(ii) Aralia shall deliver to Corn Products a stock certificate
representing the Aracorn Minority Shares, duly endorsed in favor of Corn
Products or such other Affiliate of Corn Products as Corn Products may
specify in writing at least two Business Days prior to the Initial Closing
Date (provided that Corn Products may not designate an Affiliate if such
designation would adversely affect or delay the closing) and shall duly
record such transfer in the stock record books of Aracorn; and
(iii) Arinsa shall deliver to Corn Products:
(A) a stock certificate representing the Arinsa JV Shares,
duly endorsed in favor of Corn Products or such other Affiliate of
Corn Products as Corn Products may specify in writing at least two
Business Days prior to the Initial Closing Date (provided that Corn
Products may not designate an Affiliate if such designation would
adversely affect or delay the closing) and, together with Corn
Products, shall cause such transfer to be duly recorded in the stock
record books of the Joint Venture; and
(B) a stock certificate representing the Poliecsa Shares, duly
endorsed in favor of Corn Products or such Affiliate of Corn
Products as Corn Products may specify in writing at least two
Business Days prior to the Initial Closing Date (provided that Corn
Products may not designate an Affiliate if such designation would
adversely affect or delay the Closing) and shall duly record such
transfer in the stock record books of Poliecsa.
(iv) Corn Products and Aralia shall cause (i) Ignacio Aranguren
Castiello to be the representative of Aracorn on the Board of Directors
of the Joint Venture and (ii) the following individuals to be elected to
the Board of Directors of Aracorn:
Members Alternate Members
------- -----------------
Ignacio Aranguren Castiello Santiago Aranguren Trellez
Luis Aranguren Trellez Miguel Guzman
Ignacio Aranguren Trellez Arturo Tovar Romero
Jack C. Fortnum James W. Ripley
Marcia E. Doane Cheryl Beebe
(b) Subject to the fulfillment or waiver of the conditions set
forth in Section 8.2, at the First Put Closing:
(i) Corn Products shall:
(A) pay, without any right of setoff, to Aralia an amount
equal to (x) the First Put Purchase Price or (y) the cash component
of the First Put Purchase Price as described in Section 2.2(d)
hereof, in either case by wire transfer of immediately available
funds to the account in the United States or Mexico specified by
Aralia in writing to Corn Products at least two Business Days prior
to the First Put Closing; and
(B) deliver to Aralia a stock certificate representing
Optional Shares, if any, registered in the name of Aralia or such
other Arancia Entity as Aralia may specify in writing at least two
Business Days prior to the First Put Closing Date;
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provided that if such Optional Shares are to be delivered to an
Arancia Entity other than Aralia, such Arancia Entity shall enter
into an agreement with Corn Products pursuant to which such Arancia
Entity agrees to be bound by Sections 2.2, 2.3, 3.4, 3.5 and 3.8 of
the Stockholder Agreement;
(ii) Aralia shall deliver to Corn Products a stock certificate
representing the 26.6% Shares, duly endorsed in favor of Corn Products to
Corn Products or such other Affiliate of Corn Products as Corn Products
may specify in writing at least two Business Days prior to the First Put
Closing Date (provided that Corn Products may not designate an Affiliate
if such designation would adversely affect or delay the Closing) and,
together with Corn Products, cause such transfer to be duly recorded in
the stock record books of Aracorn.
(c) Subject to the fulfillment or waiver of the conditions set
forth in Section 8.3, at the Second Put Closing:
(i) Corn Products shall:
(A) pay, without any right of setoff, to Aralia an amount
equal to (x) the Second Put Purchase Price or (y) the cash component
of the Second Put Purchase Price as described in Section 2.2(e)
hereof, in either case, by wire transfer of immediately available
funds to the account in the United States or Mexico specified by
Aralia in writing to Corn Products at least two Business Days prior
to the Second Put Closing; and,
(B) deliver to Aralia a stock certificate representing the
Optional Shares, if any, registered in the name of Aralia or such
other Arancia Entity as Aralia may specify in writing at least two
Business Days prior to the Second Put Closing Date; provided that if
such Optional Shares are to be delivered to an Arancia Entity other
than Aralia, such Arancia Entity shall enter into an agreement with
Corn Products pursuant to which such Arancia Entity agrees to be
bound by Sections 2.2, 2.3, 3.4, 3.5 and 3.8 of the Stockholder
Agreement;
(ii) Aralia shall deliver to Corn Products a stock certificate
representing the 24.4% Shares, duly endorsed in favor of Corn Products or
to such other Affiliate of Corn Products as Corn Products may specify in
writing at least two Business Days prior to the Second Put Closing Date
(provided that Corn Products may not designate an Affiliate if such
designation would adversely affect or delay the Closing).
3.3. CORN PRODUCTS' ADDITIONAL DELIVERIES. Subject to fulfillment or
waiver of the conditions set forth in Section 8.1(a), at the Initial Closing
Corn Products shall deliver to the Parent Companies all of the following:
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(i) A copy of Corn Products' Certificate of Incorporation certified
as of a recent date by the Secretary of State of the State of Delaware;
(ii) Certificate of good standing of Corn Products issued as of a
recent date by the Secretary of State of the State of Delaware;
(iii) Certificate of the secretary or an assistant secretary of
Corn Products, dated the Initial Closing Date, in form and substance
reasonably satisfactory to the Parent Companies, as to (A) no amendments
to the Certificate of Incorporation of Corn Products since a specified
date, (B) the by-laws of Corn Products, (C) the resolutions of the Board
of Directors of Corn Products authorizing the execution and performance of
this Agreement and the transactions contemplated hereby, and (D)
incumbency and signatures of the officers of Corn Products executing this
Agreement and any Corn Products Ancillary Agreement;
(iv) Opinion of counsel to Corn Products substantially in the form
contained in Exhibit A.
(v) A certificate to the effect of Section 8.1(b)(i) and (ii), duly
executed by the President or any Vice President of Corn Products;
(vi) The Corporate Name License Agreement substantially in the form
contained in Exhibit B duly executed by Corn Products;
(vii) A Non-Competition Agreement with each of the Individuals
listed on Schedule 3.3 substantially in the form contained in Exhibit C
duly executed by Corn Products;
(viii) The Stockholder Agreement substantially in the form of
Exhibit D duly executed by Corn Products; and
(ix) All approvals and consents from the Mexican Federal
Competition Commission and the Mexican Foreign Investment Commission and
from the Persons and Individuals listed in Schedule 4.4, in form and
substance reasonably satisfactory to the Parent Companies' legal counsel,
necessary in order to permit the transactions contemplated herein to be
completed at the Initial Closing, the First Put Closing and the Second Put
Closing without adversely affecting, modifying, amending, varying or
renegotiating in a way that is not insignificant to the Parent Companies
in their judgment exercised in good faith, or resulting in the termination
or cancellation of this Agreement or any Corn Products Ancillary
Agreements;
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3.4. PARENT COMPANIES' ADDITIONAL DELIVERIES. (a) Subject to
fulfillment or waiver of the conditions set forth in Section 8.1(b), at the
Initial Closing the Parent Companies shall deliver to Corn Products all of the
following:
(i) Copies of the Certificate of Incorporation of each Parent
Company and each Company notarized as of a recent date by a notary public
of the appropriate jurisdiction;
(ii) Certificate of the secretary or an assistant secretary of each
Parent Company and each Company, dated the Initial Closing Date, in form
and substance reasonably satisfactory to Corn Products, as to (A) no
amendments to the Certificate of Incorporation of such Parent Company or
such Company as the case may be, since a specified date, (B) the by-laws
of such Parent Company or Company, as the case may be, (C) the resolutions
of the Board of Directors of such Parent Company and of the stockholders
of such Parent Company authorizing the execution and performance of this
Agreement and the transactions contemplated hereby, and (D) incumbency and
signatures of the officers of such Parent Company executing this Agreement
and any Parent Company Ancillary Agreement to which such Parent Company is
a party;
(iii) Opinion of counsel to the Parent Companies substantially in
the form contained in Exhibit E;
(iv) All approvals and consents from the Mexican Federal
Competition Commission and the Mexican Foreign Investment Commission and
from the Persons and Individuals listed in Schedule 4.4, in form and
substance reasonably satisfactory to Corn Products legal counsel,
necessary in order to permit the transactions contemplated herein to be
completed at the Initial Closing, the First Put Closing and the Second Put
Closing without adversely affecting, modifying, amending, varying or
renegotiating in a way that is not insignificant to Corn Products in its
judgment exercised in good faith, or resulting in the termination or
cancellation of this Agreement or any Parent Company Ancillary Agreements;
(v) The Corporate Name License Agreement substantially in the form
contained in Exhibit B duly executed by Arinsa;
(vi) A Non-Competition Agreement substantially in the form
contained in Exhibit C duly executed by each of the Individuals listed on
Schedule 3.3;
(vii) A certificate to the effect of Section 8.1(a)(i) and (ii),
duly executed by the authorized officer of each Parent Company;
(viii) A copy of a signed resignation tendered by each of the
directors and officers of each of the Companies set forth on Schedule 3.4;
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(ix) A certificate representing one share of Arrendadora Gefemesa,
S.A. de C.V. duly endorsed for transfer to Corn Products;
(x) The Stockholder Agreement substantially in the form contained
in Exhibit D duly executed by the Parent Companies; and
(xi) The minute books and stock record books of the Joint Venture.
(b) Subject to fulfillment or waiver of the conditions set forth in
Section 8.2(b), at the First Put Closing Aralia shall deliver to Corn Products
all of the following:
(i) The minute books and stock record books of Aracorn;
(ii) Copies of the Certificate of Incorporation for Aralia and
Aracorn certified by a Mexican notary public as of a recent date; and
(iii) Certificate of the secretary or an assistant secretary of
Aralia, dated the First Put Closing Date, in form and substance reasonably
satisfactory to Corn Products, as to (A) no amendments to the by-laws of
Aralia except as provided therein, and (B) the continued existence of
Aralia.
(c) Subject to fulfillment or waiver of the conditions set forth in
Section 8.3(b), at the Second Put Closing Aralia shall deliver to Corn Products
all of the following:
(i) Copies of the Certificate of Incorporation for Aralia certified
as of a recent date; and
(ii) Certificate of the secretary or an assistant secretary of
Aralia dated the Second Put Closing Date, in form and substance reasonably
satisfactory to Corn Products, as to (A) no amendments to the by-laws of
Aralia except as provided therein, and (B) the continued existence of
Aralia.
3.5. PURCHASE PRICE ADJUSTMENT FOR EARNOUT. The Minority Share
Purchase Price shall be increased by the Earnout Payments, which Earnout
Payments shall be as follows:
(a) Prior to each of March 1, 2001, March 1, 2002 and March 1,
2003, Corn Products shall pay to Aralia an "Earnout Payment" equal to the
Composite Bonus Percentage (as defined below) determined as set forth below, for
the most recently ended Earnout Year multiplied by US$4,000,000 in the case of
Earnout Years 2000 and 2001 and US$4,500,000 in the case of Earnout Year 2002
(each, a "Target Amount") and shall deliver to Aralia a certificate setting
forth Corn Products' calculation of such amounts for such Earnout Year (an
"Earnout Notice"). Notwithstanding the previous sentence, no Earnout Payment
for any Earnout Year shall exceed US$5,000,000 or be less than US$3,000,000.
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(b) For purposes of determining the amount of each Earnout Payment,
the "Composite Bonus Percentage" for each Earnout Year shall be the average of
the percentage of each of the Target Bonuses (as defined below) earned by the
Chief Operating Officer and the Chief Executive Officer of Corn Products with
respect to such Earnout Year. The "Target Bonuses" shall be the bonuses payable
to such officers, respectively, in the event that 100% of the performance
targets determined in good faith by the Board of Directors of Corn Products are
achieved. Such performance targets shall be established no later than January
31 of the applicable Earnout Year. In the event no such performance target is
established for any Earnout Year, the performance target for the preceding
calendar year shall apply, provided that the Earnout Payment shall not be less
than the Target Amount for such Earnout Year.
(c) If Aralia disagrees with any calculation in the Earnout Notice
delivered pursuant to paragraph (a) above, Aralia may, within 30 Business Days
after the delivery of such Earnout Notice, deliver a notice of disagreement to
Corn Products setting forth Aralia's calculation of the disputed amounts. Any
such notice shall specify those items or amounts as to which Aralia disagrees,
and Aralia shall be deemed to have agreed to all other items and amounts
contained in the Earnout Notice. If Aralia fails to deliver a notice of
disagreement within such 30 Business Day period, Corn Products' Earnout Notice
shall be final and binding.
(d) If a notice of disagreement is timely delivered by Aralia
pursuant to Section 3.5(c), Corn Products and Aralia will use their good faith
best efforts to resolve any such disagreement. If, within 30 Business Days of
the date of receipt by Corn Products of Aralia's notice of disagreement, Corn
Products and Aralia are unable to resolve such disagreement, they shall promptly
thereafter appoint a firm of independent accountants of internationally
recognized standing (who shall not have any material relationship with Corn
Products or Aralia) promptly to review the disputed calculation of the Earnout
Payment, and to make their own calculation thereof. Such review shall not
include the validity or accuracy of any of the amounts used in calculating the
Earnout Payment, to the extent they are included in the audited financial
statements or the regularly maintained financial and accounting records of Corn
Products or the notes or schedules thereto. Such independent accountants shall,
as promptly as practicable, deliver a calculation of the Earnout Payment and a
report thereof to Corn Products and Aralia, and the calculation of the Earnout
Payment effected by such independent accountant shall be final and binding on
all Parties. The cost of such independent accountant shall be borne equally by
Corn Products, on the one hand, and Aralia, on the other.
(e) Upon final determination of any Earnout Payment with respect to
any Earnout Year, Corn Products shall deliver to Aralia the amount of the
shortfall, if any, so determined, together with interest thereon at the Agreed
Rate from the date that the Earnout Payment was otherwise payable to the date of
payment.
(f) In the event that a Corn Products Change in Control shall occur
prior to the last date upon which any one or more Earnout Payments shall be
payable hereunder, such remaining Earnout Payment or Payments shall be payable
to Aralia promptly, but in no event later
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than 10 Business Days, following the occurrence of such Corn Products Change of
Control, and if the amount of such remaining Earnout Payment or Payments cannot
be determined at the time as provided in Section 3.5(b) above, the amount of
each remaining Earnout Payment or Payments shall be the Target Amount for the
relevant Earnout Year.
(g) Set forth on Schedule 3.5(g), for illustrative purposes only,
is an example of the method for calculating the Earnout Payment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT COMPANIES
The Parent Companies, jointly and severally, represent and warrant
as of the date hereof and as of the Initial Closing Date to Corn Products as
follows:
4.1. DUE INCORPORATION. (a) Each of the Parent Companies is a
corporation duly incorporated and organized and validly existing under the laws
of the Republic of Mexico and has all necessary corporate power and authority to
own, lease and operate its properties and to conduct its business as and in the
places where such properties are now owned, leased or operated or such business
is now conducted.
(b) Aracorn is a corporation duly incorporated and organized and
validly existing under the laws of the Republic of Mexico. Poliecsa is a
corporation duly incorporated and organized and validly existing under the laws
of the Republic of Ecuador.
(c) The Joint Venture is a corporation duly incorporated and
organized and validly existing under the laws of the Republic of Mexico.
(d) Each of the Companies has all necessary corporate power and
authority to own, lease and operate its properties and to conduct its business
as and in the places where such properties are now owned, leased or operated or
such business is now conducted. Parent Companies have delivered to Corn
Products true and complete copies of each Company's Articles of Incorporation,
as in effect on the date hereof, and Bylaws, as in effect on the date hereof.
4.2. DUE AUTHORIZATION. (a) Each of the Parent Companies has the
necessary corporate power and authority to enter into and deliver this Agreement
and the Parent Company Ancillary Agreements to which it is or will be a party
and to perform its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the Parent Company Ancillary Agreements by Arinsa
and Aralia, as the case may be, and the performance by each of them of their
respective obligations hereunder and thereunder have been duly authorized by all
necessary corporate action on their parts. Except for the authorization of the
Mexican Foreign Investment Commission and the notification to the Mexican
Federal Competition Commission as set forth in
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Section 6.6, and the filings under the HSR Act pursuant to Section 6.9, and
except as set forth in Schedule 4.4, such execution, delivery and performance by
each of the Parent Companies does not require any action or consent of, any
registration with, or notification to, any Person or Individual, or any action
or consent under any Laws to which any of them is subject, which, if not
obtained or made would be material to any of the Companies or the transactions
contemplated by this Agreement.
(b) Except as set forth in Schedule 4.4, no approvals or consents
are required to be obtained from any Person or Individual pursuant to any
material contracts, agreements, indentures, instruments or commitments to which
any of the Parent Companies or the Companies or any of their Subsidiaries, as
the case may be, is a party or by which it is bound.
4.3. ENFORCEABILITY. This Agreement constitutes, and the Parent
Company Ancillary Agreements that are intended to constitute binding obligations
will constitute, legal, valid and binding obligations of each of the Parent
Companies who is a party hereto or thereto, enforceable against each of them in
accordance with their terms subject, however, to limitations with respect to
enforcement imposed by Bankruptcy and other Laws affecting creditors' rights
generally.
4.4. NO CONFLICT. Except as set forth in Schedule 4.4, the
execution and delivery of this Agreement and the Parent Company Ancillary
Agreements, the consummation of the transactions contemplated herein and therein
and the performance by each of the Parent Companies of their obligations
hereunder and thereunder and the compliance by each of them with the provisions
hereof and thereof do not or will not:
(a) violate, contravene or breach, or constitute a default under,
(i) the instruments of incorporation or by-laws of either Parent Company
or any of the Companies, or (ii) any Laws;
(b) violate, contravene or breach, or constitute a default under,
any material contract, agreement, indenture, instrument, or commitment to
which any of the Parent Companies, any of the Companies or any of their
Affiliates may be a party, or their properties may be subject, or by which
any of them are bound;
(c) result in the creation of, or require the creation of, any
material Lien upon any property of either of the Parent Companies or any
of the Companies or their Subsidiaries;
(d) result in the loss of any material license, permit,
registration or certificate held by any of the Companies or any of their
Subsidiaries; or
(e) result in, or give any Person or Individual the right to cause,
(i) the termination, cancellation, modification, amendment, variation or
renegotiation of any material contract, agreement, indenture, instrument
or commitment to which any of the
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Parent Companies or any of the Companies or their Subsidiaries may be a
party or by which any of them are bound or their properties affected, or
(ii) the acceleration or forfeiture of any term of payment, or (iii) the
loss in whole or in material part of any material benefit which would
otherwise accrue to, or be to the benefit of, either of the Parent
Companies or any of the Companies or their Subsidiaries.
4.5. AUTHORIZED AND ISSUED CAPITAL. The authorized capital of each
of the Companies consists only of the number of shares reflected in Schedule 4.5
(and no more), which are duly and validly subscribed and issued to the Parties
listed in Schedule 4.5 and, other than shares of the Companies owned by Corn
Products, are outstanding as fully paid and non-assessable and are not subject
to any preemptive rights.
4.6. NO SUBSIDIARIES. (a) The Companies do not, and will not upon
the Initial Closing, own, directly or indirectly, any shares of the capital
stock of any Person and have not made any equity investment in, and do not have
any equity interest in, any Person, except as specifically reflected herein in
Schedule 4.6.
(b) Schedule 4.6 sets forth a true and complete list of the names
and addresses of each of the holders of record of capital stock of each of the
Subsidiaries of the Companies and the respective number of outstanding shares or
other equity interests held by each such holder; each such holder which is the
Company or a Subsidiary thereof is the beneficial owner and holder of record
with good and valid title, free and clear of all Liens, of all of such capital
stock or other equity interests.
4.7. TITLE TO SHARES. Arinsa is the beneficial owner and holder of
record with good and valid title, free and clear of all Liens, of all of the
Arinsa JV Shares and all of the Poliecsa Shares. Aralia is the beneficial owner
and holder of record with good and valid title, free and clear of all Liens, of
all of the Aracorn Minority Shares, the 26.6% Shares and the 24.4% Shares.
4.8. NO OPTIONS. Other than agreements to which Corn Products or
its Affiliates are parties, there is no: (a) outstanding security of any of the
Companies convertible or exchangeable into any share or shares of the capital
stock of such Company; (b) outstanding subscription, option, call, commitment or
other agreement obligating any of the Companies to issue any share or shares of
its capital stock or any security or securities of any class or kind which in
any way relate to the authorized or issued capital stock of such Company; (c)
agreement which grants to any Person or Individual the right to purchase or
otherwise acquire any share or shares issued and outstanding or otherwise, of
the capital stock of any of the Companies; or (d) voting trust or proxy with
respect to any shares of the capital stock of any of the Companies.
4.9. PROCEEDINGS PERTAINING TO SHARES. There are no actions,
suits, claims, trials, demands, investigations, arbitrations or other
proceedings on behalf of or against either of the Parent Companies or any of the
Companies pending or, to the knowledge of the Parent
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Companies, threatened with respect to, any of the Arinsa JV Shares, the Aracorn
Minority Shares, the 26.6% Shares, the 24.4% Shares or the Poliecsa Shares.
4.10. CORPORATE RECORDS. Except as set forth in Schedule 4.10, the
minute books and registers of shareholders of the Companies are complete and
accurate.
4.11. FINANCIAL STATEMENTS. (a) The Financial Statements of each
of the Parent Companies were prepared in good faith and fairly present, in
accordance with Accounting Principles applied, except as described on Schedule
4.11(a), on a basis consistent with the prior period for the Person or its
predecessor and throughout the period involved, the financial position of each
of the Parent Companies, all as of the dates and for the periods therein
specified (subject to normal year-end adjustments in the case of any unaudited
interim financial statements).
(b) The Financial Statements of each of the Companies were prepared
in good faith and fairly present, in accordance with Accounting Principles
applied, except as described on Schedule 4.11(b), on a basis consistent with the
prior period, if any, for the Person or its predecessor and throughout the
period involved, the financial position of each of the Companies as of the dates
and for the periods therein specified (subject to normal year-end adjustments in
the case of any unaudited interim financial statements).
4.12. LIABILITIES. (a) Except as set forth in Schedule 4.12(a),
Aracorn does not have any liabilities or obligations (absolute, accrued or
contingent), which in any such case are required by Accounting Principles to be
reflected in a balance sheet or reflected in the notes thereto except for those
liabilities or obligations: (i) reflected in or reserved against in the
September 30, 1998 Financial Statements; or (ii) incurred after September 30,
1998 in the ordinary course of business.
(b) Except as set forth in Schedule 4.12(b), neither Poliecsa, nor,
to the knowledge of the Parent Companies, the Joint Venture have any
liabilities or obligations (absolute, accrued or contingent), which in any such
case are required by Accounting Principles to be reflected in a balance sheet or
reflected in the notes thereto except for those liabilities or obligations: (i)
reflected in or reserved against in the September 30, 1998 Financial Statements;
or (ii) incurred after September 30, 1998 in the ordinary course of business.
4.13. PROPERTY. Except as disclosed in Schedule 4.13 and except for
Permitted Encumbrances, each of the Companies and each of their Subsidiaries
has: (a) good, valid and marketable title, free and clear of any and all Liens,
to all of its immoveable property currently used and owned for the conduct of
its business, and (b) good and valid title, free and clear of any and all Liens,
to all moveable property presently used to conduct its business and reflected on
the September 30, 1998 Financial Statements or which has been acquired on or
after the date of the September 30, 1998 Financial Statements (other than such
moveable property consumed or disposed of after such date, in the ordinary
course of business and in a manner consistent with past practice). For all
immovable property leased by any of the Companies or their Subsidiaries,
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such Company or Subsidiary is entitled to the use and possession of the leased
immovable property and has complied with all conditions of the relevant lease
agreements.
4.14. CONDITION. (a) Except as set forth in Schedule 4.14(a), all
of the immovables, buildings, structures, appurtenances, leasehold improvements,
equipment, machinery, rolling stock and other tangible properties of Poliecsa
are: (i) in reasonable operating condition and repair, ordinary wear and tear
excepted, (ii) not in need of substantial maintenance or repairs (except for
ordinary or routine maintenance or repairs that are not material in nature or
costs), (iii) adequate and sufficient for the continuing conduct of the business
of Poliecsa as now conducted, and (iv) free of structural or non-structural
defects to the buildings on such properties and all of the utilities serving
such buildings are in good working order.
(b) Except as set forth in Schedule 4.14(a), to the knowledge of
the Parent Companies, all of the immovables, buildings, structures,
appurtenances, leasehold improvements, equipment, machinery, rolling stock and
other tangible properties of the Joint Venture and its Subsidiaries are: (A) in
reasonable operating condition and repair, ordinary wear and tear excepted, (B)
not in need of substantial maintenance or repairs (except for ordinary or
routine maintenance or repairs that are not material in nature or costs), (C)
adequate and sufficient for the continuing conduct of the business of such
Company as now conducted, and (D) free of structural or non-structural defects
to the buildings on such properties and all of the utilities serving such
buildings are in good working order.
4.15. INTELLECTUAL PROPERTY RIGHTS. (a) Except as set forth in
Schedule 4.15, to the knowledge of the Parent Companies, the Intellectual
Property Rights have not been opposed or held unenforceable. Except as set
forth in Schedule 4.15, Aracorn, the Joint Venture or Poliecsa is the sole and
exclusive owner of, with the sole and exclusive right to use, the Intellectual
Property Rights owned or used by such Company or its Subsidiaries in Mexico or,
with respect to Poliecsa in Ecuador, and, except as set forth in Schedule 4.15,
there is no license or sub-license to which any Company or any Arancia Entity is
a party affecting the exercise of such Intellectual Property Rights in Mexico
or, with respect to Intellectual Property Rights owned or used by Poliecsa,
Ecuador. To the knowledge of the Parent Companies, no Person or Individual has
asserted that the operations of any of the Companies, other than pursuant to an
intellectual property right licensed or otherwise made available by Corn
Products to the Joint Venture, infringe upon the intellectual property rights of
such Person or Individual.
(b) Except as set forth in Schedule 4.15, all Intellectual Property
Rights are owned by Aracorn, the Joint Venture, or Poliecsa free and clear of
all Liens. The Intellectual Property Rights that are owned by Aracorn are
listed on Schedule 4.15.
4.16. PRODUCT LIABILITY. Except as set forth in Schedule 4.16, all
products which have been sold through any of the Companies or their Subsidiaries
have been merchantable and free from defects in material or workmanship for the
term of any applicable warranties and under the conditions of any express or
implied warranties arising under Law and as set forth in standard
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warranties, if any. Except as disclosed in Schedule 4.16 hereto, during the
last two years, none of the Companies or any of their Subsidiaries have received
any claims based on alleged breach of product warranty arising from any
applicable manufacture or sale of their products.
4.17. INSURANCE. Schedule 4.17 lists each insurance policy, other
than policies with limits of less than $1,000,000, to which any of the Companies
or any of their Subsidiaries are a party, a named insured or otherwise the
beneficiary of coverage. Neither the Companies nor any party to such insurance
policies is in breach or default and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit termination,
modification, or acceleration of the policy. Neither of the Parent Companies
nor any of the Companies has received any notice of termination of any such
policies and there is no pending termination of insurance under such policies.
4.18. BANK ACCOUNTS; POWERS OF ATTORNEY. Schedule 4.18 sets forth:
(a) the name of each Person with whom any of the Companies or any of their
Subsidiaries maintains an account or safety deposit box, and (b) the name of
each Person or Individual holding a general power of attorney for any of the
Companies or any of their Subsidiaries.
4.19. LITIGATION. (a) Except as set forth in Schedule 4.19, there
are no: (1) actions, suits, claims, trials, injunctions, demands,
investigations, arbitrations, and other proceedings involving the Parent
Companies or any of the Companies or their Subsidiaries, pending against or, to
the knowledge of the Parent Companies, threatened against, any of the Companies
or their properties or Business, or (2) outstanding judgments, orders, decrees,
writs, injunctions, decisions, rulings or awards against, or with respect to,
any of the Companies or their Subsidiaries or their properties or Business.
(b) There is no action, suit, investigation or proceeding pending
against, or to the knowledge of Parent Companies threatened against, any of the
Arancia Entities before any court or arbitrator or any governmental body, agency
or official which in any manner challenges or seeks to prevent, enjoin, alter or
materially delay the transactions contemplated by this Agreement.
4.20. NO DEFAULT UNDER MATERIAL CONTRACTS. Schedule 4.20 provides
a list of all contracts of the Companies or any of their Subsidiaries that
either: (a) involve amounts in excess of US$1 million or (b) involve amounts in
excess of US$100,000 and have a duration in excess of one year (the "Company
Agreements"). Each of the Companies and their Subsidiaries, as applicable: (i)
is in compliance with and entitled to all benefits under, (ii) has substantially
performed all obligations required to be performed under, and (iii) is not in
default under, or in breach of, any of the Company Agreements binding upon them.
All such contracts are valid and enforceable. Except as set forth on Schedule
4.20, to the knowledge of the Parent Companies, there exists no fact, condition
or circumstance which, after notice or lapse of time or both, would constitute a
default or breach of any Company Agreement.
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4.21A. ARACORN TAX MATTERS. (a) Aracorn will timely file for every
taxable year or taxable period ending on or including the Initial Closing Date
and the First Put Closing Date, all Tax Returns that it is required to file, and
all such Tax Returns are, or will be, true, correct and complete in all
respects. Aracorn has paid, or has made adequate provisions in its Financial
Statements (or, in the case of Taxes accruing after September 30, 1998, in its
accounting records) for all Taxes as required by Accounting Principles. Aracorn
has not requested any extensions of time within which to file any Tax Returns,
which Tax Returns have not since been filed. There are no Liens for Taxes on
the assets of Aracorn other than statutory Liens for current Taxes not yet due.
(b) Aracorn has complied with all applicable Laws relating to the
payment and withholding of Taxes and has, within the manner prescribed by
applicable Law, withheld from its past and present employees, shareholders,
directors, officers, customers and any other applicable Persons or Individuals,
and paid over to the appropriate Taxing Authority, all Taxes required to be
withheld and paid over.
(c) Except as set forth in Schedule 4.21A;
(i) Aracorn has not waived any statute of limitations or otherwise
agreed to any extension of time with respect to an assessment or
collection of Taxes;
(ii) No audits or other administrative or court proceedings are
presently pending with regard to Taxes of Aracorn, nor do of the Parent
Companies have knowledge of any such impending audit not yet undertaken;
(iii) No deficiency for any Taxes of Aracorn has been proposed,
asserted or assessed against Aracorn which has not been resolved and paid
in full;
(iv) Aracorn has no liability with respect to Taxes of any
Affiliate; and
(v) Aracorn is not a party to any Tax Sharing Agreement.
(d) No Taxes have been imposed or will be imposed on Aracorn or the
Joint Venture relating to or arising from the formation of Aracorn or the
transfer of any assets to Aracorn.
4.21B. POLIECSA AND JOINT VENTURE TAX MATTERS. (a) Each of
Poliecsa and the Joint Venture has timely filed, and will timely file for every
taxable year or taxable period ending on or including the Initial Closing Date
all Tax Returns that it is required to file, and all such Tax Returns are, or
will be, true, correct and complete in all respects. Each of Poliecsa and the
Joint Venture has paid, or has made adequate provisions in its Financial
Statements (or, in the case of Taxes accruing after September 30, 1998, in its
accounting records) for, all Taxes as required by Accounting Principles. None
of Poliecsa and the Joint Venture has requested any extensions of
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time within which to file any Tax Returns, which Tax Returns have not since been
filed. There are no Liens for Taxes on the assets of any of Poliecsa and the
Joint Venture other than statutory Liens for current Taxes not yet due.
(b) Each of Poliecsa and the Joint Venture has complied with all
applicable Laws relating to the payment and withholding of Taxes and has, within
the manner prescribed by applicable Law, withheld from its past and present
employees, shareholders, directors, officers, customers and any other applicable
Persons or Individuals, and paid over to the appropriate Taxing Authority, all
Taxes required to be withheld and paid over.
(c) Except as set forth in Schedule 4.21B;
(i) None of Poliecsa and the Joint Venture has waived any statute
of limitations or otherwise agreed to any extension of time with respect
to an assessment or collection of Taxes;
(ii) No audits or other administrative or court proceedings are
presently pending with regard to Taxes of Poliecsa or the Joint Venture,
and neither of the Parent Companies has knowledge of any such impending
audit not yet undertaken;
(iii) No deficiency for any Taxes of Poliecsa or the Joint Venture
has been proposed, asserted or assessed against any of Poliecsa and the
Joint Venture which has not been resolved and paid in full;
(iv) None of Poliecsa and the Joint Venture has any liability with
respect to Taxes of any Affiliate; and
(v) None of Poliecsa and the Joint Venture is a party to any Tax
Sharing Agreement.
4.22. EMPLOYEE MATTERS. The Parent Companies have delivered to
Corn Products a complete and accurate list of all employees as of September 30,
1998 of the Companies and their Subsidiaries together with years of service.
Schedule 4.22 provides a description of any collective bargaining agreement or
other labor contract which is applicable to any of the Companies or any of their
Subsidiaries. To the knowledge of the Parent Companies no fact, condition or
circumstance exists which could reasonably be expected to provide the basis for
any work stoppage or other labor dispute. Each of the Companies and each of
their Subsidiaries has complied with all applicable employment Laws and does not
have any obligation in respect of any amount due to employees of such Company or
Subsidiary, other than normal salary, other fringe benefits accrued but not
payable on the date hereof and unused vacation benefits.
4.23. BENEFIT PLANS. Except as set forth in Schedule 4.23, the
Companies have no Benefit Plans. With respect to the Benefit Plans listed in
Schedule 4.23, true and correct copies
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of the said Benefit Plans have heretofore been delivered to Corn Products, all
required contributions and premiums have been paid thereunder, no promise or
commitment to increase benefits thereunder has been made except as required by
Law, no event has occurred which could subject any of the Companies or any of
their Subsidiaries or the seniority premium fund of the Joint Venture to any
tax, penalty or other liability in connection therewith, there are no unfunded
liabilities with respect to such Benefit Plans and no payments under any
employee benefit plans, programs or arrangements will be triggered as a result
of the transactions contemplated by this Agreement or any other agreement
entered into pursuant hereto.
4.24. COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.24,
and except for the matters relating to the environment and its protection, each
of the Companies and each of their Subsidiaries is in compliance with all Laws.
Without limiting the generality of the foregoing, each of the Companies and each
of their Subsidiaries has complied with all Laws relating to health, product
safety, quality assurance, employment, occupational safety and public health.
4.25. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth in
Schedule 4.25, each of Aracorn and the Joint Venture and each of their
Subsidiaries is in compliance with all applicable Mexican Laws relating to the
environment and its protection and Poliecsa and each of its Subsidiaries is in
compliance with Ecuadorian Laws relating to the environment and its protection.
Except as indicated in Schedule 4.25: (a) there have been no governmental
claims, citations, notices of violation, judgements, decrees or orders issued
against any of the Companies or any of their Subsidiaries for impairment or
damage, injury or adverse effect to the environment or public health or, to the
knowledge of the Parent Companies, there have been no private complaints on such
matters; (b) there is no condition relating to any properties of any of the
Companies or any of their Subsidiaries that would require any type of remedial,
clean-up, response or other action under applicable Mexican Law or, with respect
to Poliecsa and its Subsidiaries, Ecuadorian Law; and (c) each of the Companies
and each of their Subsidiaries has complied with existing Mexican Law or, with
respect to Poliecsa and its Subsidiaries, Ecuadorian Law in the generation,
treatment, storage and disposal of toxic and hazardous substances, as defined
under existing Law.
4.26. LICENSES AND PERMITS. Each of the Companies and each of
their Subsidiaries has obtained all licenses, permits, registrations and
certificates necessary to conduct its business as now operated and all such
licenses, permits, registrations and certificates are in full force and effect.
Each of the Companies and each of their Subsidiaries, as applicable, has
complied with the terms and requirements of such licenses, permits,
registrations and certificates.
4.27. ORDINARY COURSE. Except as set forth in Schedule 4.27, and
except for transactions contemplated hereunder, since September 30, 1998, each
Company and each of its Subsidiaries has conducted its business and affairs in
the ordinary course and in a manner consistent with past practices.
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4.28. STAND ALONE. Except as set forth in Schedule 4.28, (a) no
part of the Business of any of the Companies is conducted through any Person or
Individual other than such Company or its wholly-owned Subsidiaries, and (b) the
assets owned, leased or licensed by the Companies and their Subsidiaries
constitute all of the assets used or held for use in the Business of the
Companies.
4.29. COPIES. All copies of documents provided or caused to be
provided by either of the Parent Companies or any of the Companies at the
direction of the Parent Companies to Corn Products or its legal, accounting and
other representatives are true, complete and correct copies of the originals.
4.30. RELATIONSHIPS WITH AFFILIATES. Except as set forth in
Schedule 4.30: (a) none of the Parent Companies or their Affiliates have, and
none of their directors or officers and no Arancia Entity has, any interest in
any property, immovable or movable, tangible or intangible, used or held for use
by the business of any of the Companies; (b) none of the Parent Companies or
their Affiliates, and none of their directors or officers and no Arancia Entity,
owns of record or beneficially, any equity interest (other than equity interests
of less than 5% in the aggregate of any class of capital stock of any
corporation if such stock is publicly traded and listed on any national or
regional stock exchange or on the Nasdaq National Market) or any other interest
in any Person (i) which has, or within the past three years had, business
dealings with any of the Companies or any of their Subsidiaries other than
business dealings or transactions which are or were conducted in the ordinary
course of business with such Company or such Subsidiary and at ordinary
prevailing market prices and on ordinary prevailing market terms or (ii) which
is in competition with any of the Companies in the Mexican market or, with
respect to Poliecsa, the Ecuadorian market with respect to any line of the
products or services of any of the Companies; and (c) since December 31, 1996
there have been no transactions between any of the Companies or any of their
Subsidiaries and any Arancia Entity other than business dealings or transactions
which are or were conducted in the ordinary course of business with such Company
or Subsidiary of such Company and at ordinary prevailing market prices and on
ordinarily prevailing terms. Neither of the Parent Companies or any Arancia
Entity nor any of their Affiliates has any claim against any of the Companies or
any Subsidiaries of the Companies.
4.31. INVESTMENT REPRESENTATION. The Consideration Shares are
being acquired by Aralia for its own account for investment, and not with a view
to the sale or distribution of any part thereof without registration under the
Securities Act or pursuant to an applicable exemption therefrom.
4.32. U.S. ANTITRUST COMPLIANCE. (a) The Joint Venture, together
with all entities controlled by the Joint Venture, do not hold assets (other
than investment assets) located in the United States having an aggregate book
value of US$15 million or more.
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(b) The Joint Venture, together with all entities controlled by the
Joint Venture, did not make sales in or into the United States of US$25 million
or more in the most recent fiscal year.
4.33. NO FINDER. Except as set forth on Schedule 4.33, neither the
Parent Companies nor any party acting on their behalf has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary for
or on account of the transactions contemplated by this Agreement or any of the
other agreements or instruments contemplated hereby.
4.34. NO OTHER REPRESENTATIONS. Corn Products acknowledges that
the Parent Companies do not make any representation or warranty with respect to
(i) any projections, estimates or budgets delivered to or made available to Corn
Products of future revenues, future results of operations (or any component
thereof), future cash flows, or future financial condition (or any component
thereof) of any of the Parent Companies, the Companies and their respective
Subsidiaries or (ii) any other information or documents made available to Corn
Products and its counsel, accountants or advisors with respect to any of the
Parent Companies, the Companies or their respective Subsidiaries or their
respective businesses or operations, except as expressly set forth in this
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CORN PRODUCTS
Corn Products hereby represents and warrants as of the date hereof
and as of the Initial Closing Date to the Parent Companies as follows:
5.1. DUE INCORPORATION. Corn Products is a corporation duly
incorporated and organized and validly existing under the laws of the State of
Delaware, United States of America, and has all necessary corporate power and
authority to own, lease and to operate its properties and to conduct its
business as and in the places where such properties are now owed, leased or
operated or such business is now conducted.
5.2. DUE AUTHORIZATION. Corn Products has the necessary corporate
power and authority to enter into and deliver this Agreement and the Corn
Products Ancillary Agreements and to perform its obligations hereunder or
thereunder. The execution and delivery of this Agreement and the Corn Products
Ancillary Agreements by Corn Products and the performance by Corn Products of
its obligations hereunder and thereunder have been duly authorized by all
necessary corporate action. Except for the authorization of the Mexican Foreign
Investment Commission and notification to the Mexican Federal Competition
Commission and as set forth in Section 6.6, and the filings under the HSR Act
pursuant to Section 6.9, such execution, delivery and performance by Corn
Products does not require any action or consent of, any registration
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with, or notification to, any Person or Individual, or any action or consent
under any Laws to which Corn Products is subject. No approvals or consents are
required to be obtained from any Person or Individual pursuant to any contracts,
agreements, indentures, instruments or commitments to which Corn Products is a
party or by which it is bound, which, if not obtained or made would be material
to Corn Products or the transactions contemplated by this Agreement.
5.3. ENFORCEABILITY. This Agreement constitutes, and the Corn
Products Ancillary Agreements that are intended to be binding obligations will
constitute, legal, valid and binding obligations of Corn Products, enforceable
against Corn Products in accordance with their terms subject, however, to
limitations with respect to enforcement imposed by Bankruptcy and other Laws
affecting creditors' rights generally.
5.4. NO CONFLICT. Except as set forth in Schedule 5.4, the
execution and delivery of this Agreement and the execution and delivery of the
Corn Products Ancillary Agreements, the consummation of the transactions
contemplated herein and therein and the performance by Corn Products of its
obligations hereunder and thereunder and the compliance by Corn Products with
the provisions hereof and thereof do not or will not:
(a) violate, contravene or breach, or constitute a default under,
(i) the instruments of incorporation or by-laws of Corn Products, or (ii)
any Laws:
(b) violate, contravene or breach, or constitute a default under,
any material contract, agreement, indenture, instrument, or commitment to
which Corn Products or any of its Affiliates may be a party, or their
properties may be subject, or by which any of them are bound;
(c) result in the creation of, or require the creation of, any
material Lien upon any property of Corn Products; or
(d) result in, or give any Person or Individual the right to cause,
(i) the termination, cancellation, modification, amendment, variation or
renegotiation of any material contract, agreement, indenture, instrument
or commitment to which Corn Products may be a party or by which Corn
Products is bound or its properties affected, or (ii) the acceleration or
forfeiture of any term of payment, or (iii) the loss in whole or in
material part of any material benefit which would otherwise accrue to, or
be to the benefit of, Corn Products.
5.5. INVESTMENT REPRESENTATION. The Arinsa JV Shares, the Aracorn
Minority Shares and the Poliecsa Shares (and if acquired, the 24.4% Shares and
the 26.6% Shares) are being acquired by Corn Products for its own account for
investment, and not with a view to the sale or distribution of any part thereof
without registration under the Securities Act or pursuant to an applicable
exemption therefrom.
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5.6. CONSIDERATION SHARES. The issuance of the Consideration
Shares in connection with the transactions contemplated hereby has been duly
authorized on behalf of Corn Products and such shares, when issued pursuant to
this Agreement, will be duly and validly issued and outstanding, fully paid and
nonassessable and free of preemptive rights.
5.7. NO FINDER. Except as set forth on Schedule 5.7, neither Corn
Products nor any party acting on behalf of Corn Products has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary for
or on account of the transactions contemplated by this Agreement or any of the
other agreements or instruments contemplated hereby.
5.8. SEC REPORTS. Corn Products has filed all required reports,
proxy statements, registration statements, forms and other documents with the
Commission since January 1, 1998 (the "Corn Products SEC Documents"). As of
their respective dates, and giving effect to any amendments thereto filed prior
to the date of this Agreement, the Corn Products SEC Documents complied or, in
the case of any reports, proxy statements, registration statements, forms or
other documents filed by Corn Products with the Commission after the date of
this Agreement, will comply in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the applicable
rules and regulations of the Commission promulgated thereunder and none of the
Corn Products SEC Documents contained or, in the case of any reports, proxy
statements, registration statements, forms or other documents filed by Corn
Products with the Commission after the date of this Agreement, will contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
5.9. FINANCIAL STATEMENTS. The audited consolidated balance sheet
as of December 31, 1997 and the related audited consolidated statements of
income and cash flows for the year ended December 31, 1997 and the unaudited
interim consolidated balance sheet for the six months ended June 30, 1998 and
the related unaudited interim consolidated statements of income and cash flows
for the six months ended June 30, 1998 of Corn Products and its Subsidiaries
were prepared in good faith and fairly present, in conformity with Accounting
Principles the consolidated financial position of Corn Products and its
Subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the period then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements) applied
on a basis consistent with the prior period for the Person or its predecessor
and throughout the period involved.
5.10. LITIGATION. (a) There is no action, suit, investigation or
proceeding pending against, or to the knowledge of Corn Products threatened
against, Corn Products before any court or arbitrator or any governmental body,
agency or official which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this Agreement.
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(b) Except as set forth on Schedule 5.10(b), there are no (i)
actions, suits, claims, trials, injunctions, demands, investigations,
arbitrations, and other proceedings involving Corn Products or its Subsidiaries
pending against or, to the knowledge of Corn Products, threatened against, Corn
Products or its Subsidiaries or its or their properties or business, or (ii)
outstanding judgments, orders, decrees, writs, injunctions, decisions, rulings
or awards against, or with respect to, Corn Products or its Subsidiaries or its
or their business, that, in either case, (A) have not been reflected in the Corn
Products SEC Documents, and (B) Corn Products believes will be required to be
disclosed in Corn Products Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998.
5.11. SUBSEQUENT LIABILITIES. Except as set forth on Schedule 5.11
or as otherwise disclosed to the Parent Companies by Corn Products in writing,
Corn Products does not have any liabilities or obligations (absolute, accrued or
contingent), which in any such case are required by Accounting Principles to be
reflected in a balance sheet or the notes thereto, except for (i) those
reflected in the financial statements contained in the Corn Products SEC
Documents, or (ii) incurred after June 30, 1998 in the ordinary course of
business.
5.12. NO OTHER REPRESENTATIONS. Each of the Parent Companies
acknowledges that Corn Products does not make any representation or warranty
with respect to (i) any projections, estimates or budgets delivered to or made
available to the Parent Companies of future revenues, future results of
operations (or any component thereof), future cash flows, or future financial
condition (or any component thereof) of Corn Products and its Subsidiaries or
(ii) any other information or documents made available to the Parent Companies
and their counsel, accountants or advisors with respect to Corn Products or its
Subsidiaries or their respective businesses or operations, except as expressly
set forth in this Agreement.
ARTICLE VI
ACTION PRIOR TO THE CLOSING DATES
The respective parties hereto covenant and agree to take the
following actions between the date hereof and the applicable Closing Date:
6.1. EXAMINATION OF CORN PRODUCTS AND THE COMPANIES. Subject to
the terms of the letter agreement dated as of August 3, 1998 between Arinsa and
Corn Products (the "Confidentiality Agreement"), from the date hereof up to the
Initial Closing Date, the Parent Companies and each of the Companies shall
afford to Corn Products and its legal, accounting, engineering, environmental
and other representatives access during normal business hours (without undue
interference to the ordinary conduct of the business of the Companies) to (a)
the Companies and their affairs, business, properties, documents, records and
written materials, and (b) all executive personnel and auditors of the Companies
to consult with them in respect of (i)
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affairs, business and properties of each of the Companies and the manner in
which they are conducted, held or used and (ii) any questions raised by the
examination made by Corn Products and their representatives pursuant to this
Section 6.1. Nothing contained herein shall be deemed to limit any rights Corn
Products may have by virtue of its current interest in the Joint Venture.
6.2. PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each of
the parties hereto shall refrain from taking any action which would render any
representation or warranty made by such party in this Agreement inaccurate as of
the Initial Closing Date. Each party shall promptly notify the other of any
action, suit or proceeding that shall be instituted or threatened against such
party to restrain, prohibit or otherwise challenge the legality of any
transaction contemplated by this Agreement. The Parent Companies shall promptly
notify Corn Products of (i) any lawsuit, claim, proceeding or investigation that
may be threatened, brought, asserted or commenced against any of the Companies
which would have been listed in Schedule 4.19 if such lawsuit, claim, proceeding
or investigation had arisen prior to the date hereof and (ii) any other event or
matter which becomes known to either Parent Company and would cause any other
representation or warranty contained in Article IV to be untrue in any material
respect. Corn Products shall promptly notify the Parent Companies of (i) any
lawsuit, claim, proceeding or investigation that may be threatened, brought,
asserted or commenced against Corn Products which would have been listed on
Schedule 5.10(b) if such lawsuit, claim, proceeding or investigation had arisen
prior to the date hereof and (ii) any other event which becomes known to Corn
Products and would cause any other representation or warranty contained in
Article V to be untrue in any material respect.
6.3. CONSENTS OF THIRD PARTIES; GOVERNMENTAL APPROVALS. (a) The
Parent Companies will (and will cause the Companies to) act diligently and
reasonably to secure, before the Initial Closing Date, the consents, approvals
and waivers, in form and substance reasonably satisfactory to Corn Products, set
forth on Schedule 4.4, provided that (i) none of the Parent Companies, the
Companies or Corn Products shall have any obligation to offer or pay any
consideration in order to obtain any such consents or approvals, and (ii)
neither Parent Company nor any of the Companies shall make or permit any
Subsidiary to make any agreement or understanding affecting the assets or
business of any of the Companies or its Subsidiaries as a condition for
obtaining any such consents or waivers except with the prior written consent of
Corn Products. During the period prior to the applicable Closing Date, Corn
Products shall act diligently and reasonably to cooperate with the Parent
Companies and the Companies to obtain the consents, approvals and waivers
contemplated by this Section 6.3(a).
(b) During the period prior to the applicable Closing Date, the
Parent Companies and Corn Products shall (and the Parent Companies shall cause
the Companies to) act diligently and reasonably, and shall cooperate with each
other, in making any required filing or notification and in securing any
consents and approvals of any Governmental Body required to be obtained by them
in order to permit the consummation of the transactions contemplated by this
Agreement or any of the Parent Company Ancillary Agreements, or to otherwise
satisfy the conditions set forth in Article VIII; provided that (i) none of the
Parent Companies, the Companies or Corn Products
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shall have any obligation to offer or pay any consideration other than ordinary
fees of any Governmental Body in order to obtain such consents and approvals,
and (ii) neither Parent Company nor any of the Companies shall make or permit
any Subsidiary of any Company to make any agreement or understanding affecting
the assets or business of any of the Companies or its Subsidiaries as a
condition for obtaining any such consents or approvals except with the prior
written consent of Corn Products.
6.4. OPERATIONS PRIOR TO THE INITIAL CLOSING DATE AND THE TRANSFER
OF ARACORN SHARES. (a) The Parent Companies shall cause each Company and its
Subsidiaries to operate and carry on its business only in the ordinary course
and substantially as presently operated in the case of the Joint Venture and its
Subsidiaries prior to the Initial Closing Date, and in the case of Aracorn prior
to the transfer of the 26.6% Shares to Corn Products or its designated
Affiliate. Consistent with the foregoing, the Parent Companies shall cause each
of Poliecsa and the Joint Venture and their Subsidiaries prior to the Initial
Closing Date and Aracorn prior to the transfer of the 26.6% Shares to Corn
Products or its designated Affiliate to keep and maintain the assets and
properties of such Company and its Subsidiaries in good operating condition and
repair and shall use its reasonable efforts consistent with good business
practice to maintain the business organization of such Company and its
Subsidiaries intact and to preserve the goodwill of the suppliers, contractors,
licensors, employees, customers, distributors and others having business
relations with such Company and its Subsidiaries. Neither Parent Company shall
have any obligation or liability pursuant to the two foregoing sentences, nor
shall it be considered a breach of a representation or warranty, to the extent
they are prohibited or restricted from taking any action by the action or
inaction of Corn Products or any of its Affiliates. In connection therewith,
except with respect to the employees listed on Schedule 6.4 hereto prior to the
Initial Closing, the Parent Companies shall not (nor permit any of the Companies
or any of their Subsidiaries to) transfer or cause to be transferred from any of
the Companies or any of their Subsidiaries, any employee or agent thereof.
(b) Except with the express written approval of Corn Products, the
Parent Companies shall not permit the Joint Venture or Poliecsa or any of their
Subsidiaries prior to the Initial Closing, and shall not permit Aracorn prior
to the transfer of the 26.6% Shares to Corn Products or its designated
Affiliate, to take any of the following actions:
(i) amend its charter or by-laws;
(ii) issue any share or shares of capital stock;
(iii) issue any security convertible or exchangeable into any share
or shares of the capital stock of such Company or Subsidiary of any
Company;
(iv) enter into any subscription, option, call, commitment or other
agreement obligating any Company or Subsidiary of any Company to issue any
share or shares of its
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capital stock or any security or securities of any class or kind which in
any way relate to the authorized or issued capital stock of such Company
or such Subsidiary;
(v) enter into any agreement which grants to any Person or
Individual the right to purchase or otherwise acquire any share or shares
issued and outstanding or otherwise, of the capital stock of any Company
or Subsidiary of any Company;
(vi) enter into any voting trust or proxy with respect to any shares
of the capital stock of any Company or Subsidiary of any Company; or
(vii) make any changes to the composition of the board of directors
or officers of any Company or Subsidiary of any Company, except as
otherwise contemplated by this Agreement; provided, however, that if any
member of the board of directors or officers of any Company or Subsidiary
of any Company which the Parent Companies have the power to elect or
appoint dies or becomes incapacitated, the Parent Companies may designate
a replacement with the consent of Corn Products, which shall not be
unreasonably withheld.
Neither Parent Company shall have any obligation or liability
pursuant to Section 6.4(b), nor shall it be considered a breach of a
representation or warranty, to the extent they are prohibited or restricted from
taking any action by the action of Corn Products or any of its Affiliates.
6.5. NOTIFICATION BY PARENT COMPANIES OF CERTAIN MATTERS. During
the period prior to the Initial Closing Date in the case of the Joint Venture or
Poliecsa, or prior to the First Put Closing Date in the case of matters directly
affecting Aracorn (and not indirectly through an impact on the Joint Venture),
the Parent Companies will promptly advise Corn Products in writing of (i) any
Material Adverse Effect, (ii) any notice or other communication from any third
Person alleging that the consent of such third Person is or may be required in
connection with the transactions contemplated by this Agreement, and (iii) any
material default under any Company Agreement or event which, with notice or
lapse of time or both, would become such a default on or prior to the Initial
Closing Date and of which either Parent Company has knowledge.
6.6. MEXICAN REGULATORY COMPLIANCE. Aralia has filed with the
Mexican Federal Competition Commission and the Mexican Foreign Investment
Commission the notifications and other information required to be filed pursuant
to the terms of the Mexican Federal Economic Competition Law and the Mexican
Foreign Investment Law, respectively, with respect to the transactions
contemplated hereby. Each Party warrants that all information supplied by such
Party for inclusion in such filings was, as of the date filed, true and accurate
in all material respects and in accordance with the requirements of the Mexican
Federal Economic Competition Law and the Mexican Foreign Investment Law, as
applicable. Each of Corn Products and the Parent Companies agrees to make
available to the other such information as each of them may reasonably request
relative to its business, assets and property as may be required of each of them
to make such filings and to provide any additional information requested
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by the Mexican Federal Competition Commission under the Mexican Federal Economic
Competition Law or by the Mexican Foreign Investment Commission under the
Mexican Foreign Investment Law.
6.7. INSURANCE. At all times from the date hereof through the
transfer of the 26.6% Shares to Corn Products or its designated Affiliate,
Aralia and Corn Products shall cause Aracorn to carry such insurance as is
reasonable and customary for such an entity.
6.8. FACILITATION OF CLOSINGS. (a) Subject to the terms and
conditions of this Agreement, each of Corn Products and Parent Companies will
use all commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary or desirable under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement.
(b) In addition to the foregoing, if the 120 day period specified
in Sections 3.1(b) and 3.1 (c) for the First Put Closing and the Second Put
Closing shall pass without the conditions to such closings being satisfied or
waived, the parties agree to negotiate in good faith in an effort to restructure
the transaction contemplated by this Agreement and the Parent Company and Corn
Products Ancillary Agreements so as to provide the rights and benefits to the
respective Parties as initially contemplated by the Parties.
SECTION 6.9. U.S. ANTITRUST LAW COMPLIANCE. As promptly as
practicable after the date hereof, and from time to time thereafter as
necessary, Aralia and Corn Products shall file with the Federal Trade Commission
and the Antitrust Division of the Department of Justice the notifications and
other information required to be filed under the HSR Act, or any rules and
regulations promulgated thereunder, with respect to the transactions
contemplated hereby. Each party warrants that all such filings by it will be,
as of the date filed, true and accurate in all material respects and in material
compliance with the requirements of the HSR Act and any such rules and
regulations. Each of Aralia and Corn Products agrees to make available to the
other such information as each of them may reasonably request relative to its
business, assets and property as may be required of each of them to file any
additional information requested by such agencies under the HSR Act and any
such rules and regulations. Aralia and Corn Products will supply each other
with copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between either of them or their respective
representatives and the Federal Trade Commission, the Antitrust Division of the
United States Department of Justice or any other governmental agency or
authority or members of their respective staffs with respect to this Agreement
or the transactions contemplated hereby.
ARTICLE VII
ADDITIONAL AGREEMENTS
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7.1. CONFIDENTIAL NATURE OF INFORMATION. The provisions of the
Confidentiality Agreement shall apply to all documents, materials and other
information which any Party shall have obtained regarding any other Party during
the course of the negotiations leading to the consummation of the transactions
contemplated hereby (whether obtained before or after the date of this
Agreement) and the preparation of this Agreement and other related documents.
7.2. NO PUBLIC ANNOUNCEMENT. On the date hereof, each of the
Parties will issue a press release in a form previously agreed to by the
Parties. Any subsequent written press release or any written public
announcement, statement or publicity with respect to the transactions
contemplated by this Agreement shall be made only with the prior consent of the
Parties (which consent shall not be unreasonably withheld), unless such release,
announcement, statement or publicity is required by Laws or the rules of any
stock exchange or quotation system.
7.3. EXPENSES. Each Party shall pay the costs, expenses, fees,
taxes and duties which it incurs in the course of negotiation, execution and
performance of its obligations pursuant to this Agreement.
7.4. FURTHER ASSURANCES. From time to time following the Initial
Closing Date, the transfer of the 26.6% Shares to Corn Products and the transfer
of the 24.4% Shares to Corn Products, as applicable, each Parent Company shall
execute and deliver, or cause to be executed and delivered, to Corn Products or
any of the Companies, as the case may be, such other bills of sale, deeds,
endorsements, assignments and other instruments of conveyance and transfer as
Corn Products or such Company may reasonably request or as may be otherwise
necessary to more effectively convey and transfer to, and vest in, such Company
or Corn Products and put such Company or Corn Products, as appropriate, in
possession of, the securities intended to be transferred to Corn Products as
contemplated hereby and by the Corn Products and Parent Company Ancillary
Agreements, or any part of the assets or properties of such Company not in its
possession on the applicable Closing Date.
7.5. TERMINATION OF JOINT OWNERSHIP AGREEMENT. Upon the Initial
Closing, the Parties agree that the Joint Ownership Agreement shall be
terminated and shall be of no further force or effect and that the JVA Ancillary
Agreements shall by their terms terminate.
7.6. DIVIDENDS. (a) In the event that prior to the transfer of the
24.4% Shares to Corn Products or its designated Affiliate the Board of Directors
of Aracorn shall recommend to the stockholders of Aracorn and the stockholders
of Aracorn shall declare or pay a dividend or dividends on or shall make any
other distribution of cash with respect to, shares of capital stock of Aracorn
and the record date for any such dividend or distribution is a date that is on
or after the transfer of the 26.6% Shares to Corn Products or its designated
Affiliate but prior to the transfer of the 24.4% Shares to Corn Products or its
designated Affiliate, the Second Put Purchase Price shall be reduced by the
aggregate amount of any such dividends or distributions actually received by
Aralia (converted, if paid in any currency other than U.S. dollars, into U.S.
dollars at the rate
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quoted on the date of payment by The Wall Street Journal for such currency) plus
the amount accrued thereon from the date paid to the Second Put Closing Date at
the Agreed Rate.
(b) In no event may the aggregate amount of any dividend or
distribution declared, paid or otherwise made by Aracorn and actually received
by either of the Parent Companies or any Arancia Entity prior to the transfer of
the 24.4% Shares to Corn Products or its designated Affiliate be in excess of
the Second Put Purchase Price.
(c) In no event shall Corn Products permit Aracorn to pay any
dividends or distributions which would reduce the amounts otherwise payable to
Parent Companies hereunder, unless at the time of actual payment thereof, the
currency of such payments can be freely exchanged into U.S. dollars as described
in paragraph (a) above and the amounts of such dividends or distributions, when
so converted, is freely transferable to bank accounts in the United States of
America.
(d) Notwithstanding anything in this Section 7.6 to the contrary,
(a) Aracorn shall not declare or pay any dividend prior to the date that is
nineteen months after the Initial Closing Date or (b) pay any dividend
distribution except in cash prior to the transfer of the 24.4% Shares to Corn
Products or its designated Affiliate.
7.7. AMENDMENT TO CONFIDENTIALITY AGREEMENT. Arancia and Corn
Products hereby amend the Confidentiality Agreement to provide that the
obligations set forth on pages 3-4, paragraphs (a) through (h) of the
Confidentiality Agreement shall terminate upon the earlier to occur of (i) the
execution and delivery of the Stockholder Agreement by the Parties or (ii) six
months after the termination of this Agreement.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES
8.1. CONDITIONS TO THE INITIAL CLOSING. (a) The obligations of
Corn Products to consummate the Initial Closing are subject to the satisfaction,
on or prior to the Initial Closing Date, of the following conditions any one of
which may be waived in writing by Corn Products:
(i) The representations and warranties of each Parent Company
contained in this Agreement shall be true and correct at the time of the
Initial Closing as though made on such date (except for those
representations and warranties made as of a specific date), with such
exceptions as, individually or in the aggregate, would not have a Material
Adverse Effect;
(ii) Each of the Parent Companies shall have performed or complied
in all material respects with all of their covenants, agreements and
obligations herein contained, to the
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extent the same are required to be performed or complied with at or prior
to the time of the Initial Closing;
(iii) All approvals and consents shall have been obtained from the
Mexican Federal Competition Commission and the Mexican Foreign Investment
Commission, and from the Persons and Individuals listed in Schedule 4.4,
in form and substance reasonably satisfactory to Corn Products' legal
counsel, necessary in order to permit the transactions contemplated herein
to be completed at the Initial Closing, the First Put Closing and the
Second Put Closing without adversely affecting, modifying, amending,
varying or renegotiating in a way that is not insignificant to Corn
Products in its judgment exercised in good faith or resulting in the
termination or cancellation of, this Agreement or any Parent Company
Ancillary Agreements;
(iv) The waiting period under the HSR Act shall have expired or
terminated, and no (A) temporary restraining order, preliminary or
permanent injunction or other order issued by a court of competent
jurisdiction, or (B) other legal restraint or prohibition, including those
arising as a result of the failure to obtain or maintain any necessary
governmental approval or consent, shall be in effect preventing or
materially affecting the consummation of the transactions contemplated by
this Agreement or any Parent Company Ancillary Agreements or Corn Products
Ancillary Agreements;
(v) All of the Parent Company Ancillary Agreements required to be
delivered at the Initial Closing shall have been duly executed and
delivered by the parties thereto;
(vi) All of the directors and officers of Aracorn, the Joint
Venture or Poliecsa set forth on Schedule 3.4 shall have tendered their
resignation from each such position held by them with the applicable
corporation; and
(vii) the Bylaws of the Joint Venture shall have been amended to
read in their entirety as set forth in Exhibit F hereto.
(b) The obligations of each of the Parent Companies to consummate
the Initial Closing are subject to the satisfaction, on or prior to the Initial
Closing Date, of the following conditions any one of which may be waived in
writing by either of the Parent Companies:
(i) The representations and warranties of Corn Products contained
in this Agreement shall be true and correct at the time of the Initial
Closing as though made on such date, with such exceptions as, individually
or in the aggregate, would not have a Material Adverse Effect;
(ii) Corn Products shall have performed or complied in all material
respects with all of its covenants, agreements and obligations herein
contained, to the extent the same are required to be performed or complied
with at or prior to the time of the Initial Closing;
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(iii) All approvals and consents shall have been obtained from the
Mexican Federal Competition Commission and the Mexican Foreign Investment
Commission and from the Persons and Individuals listed in Schedule 4.4, in
form and substance reasonably satisfactory to Parent Companies' legal
counsel, necessary in order to permit the transactions contemplated herein
to be completed at the Initial Closing, the First Put Closing and the
Second Put Closing without adversely affecting, modifying, amending,
varying or renegotiating in a way that is not insignificant to the Parent
Companies in their judgment exercised in good faith or resulting in the
termination or cancellation of this Agreement or any Corn Products
Ancillary Agreements;
(iv) The waiting period under the HSR Act shall have expired or
terminated, and no (A) temporary restraining order, preliminary or
permanent injunction or other order issued by a court of competent
jurisdiction, or (B) other legal restraint or prohibition, including those
arising as a result of the failure to obtain or maintain any necessary
governmental approval or consent, shall be in effect preventing or
materially affecting the consummation of the transactions contemplated by
this Agreement or any Parent Company Ancillary Agreements or Corn Products
Ancillary Agreements;
(v) All of the Corn Products Ancillary Documents required to be
delivered at the Initial Closing shall have been duly executed and
delivered by parties thereto.
8.2. CONDITIONS TO THE FIRST PUT CLOSING. (a) The obligations of
Corn Products to consummate the First Put Closing are subject to the
satisfaction, on or prior to the First Put Closing Date, of the following
conditions any one of which may be waived in writing by Corn Products:
(i) The representations and warranties of Aralia contained in
Section 4.7 relating to the 26.6% Shares shall be true and correct at the
time of the First Put Closing as though made on such date;
(ii) Aralia shall have performed or complied in all material
respects with all of its covenants, agreements and obligations contained
in Section 3.4(b), to the extent the same are required to be performed or
complied with after the Initial Closing and at or prior to the time of the
First Put Closing; and
(iii) No (A) temporary restraining order, preliminary or permanent
injunction or other order issued by a court of competent jurisdiction, or
(B) other legal restraint or prohibition, including those arising as a
result of the failure to obtain or maintain any necessary governmental
approval or consent, shall be in effect preventing or materially affecting
the consummation of the transactions contemplated by this Agreement or any
Parent Company Ancillary Agreements or Corn Products Ancillary Agreements
relating to the transfer of the 26.6% Shares or the 24.4% Shares to Corn
Products, unless the temporary restraining order, preliminary or
permanent injunction or other order affecting the Non-Competition
Agreements or the
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Corporate Name License was issued at the request of the Parent Companies or
any of their Affiliates or any of the Arancia Entities either directly or
by another Person or Individual acting on their behalf.
(b) The obligations of Aralia to consummate the First Put Closing are
subject to the satisfaction, on or prior to the First Put Closing Date, of the
following condition which may be waived in writing by Aralia:
(i) No (A) temporary restraining order, preliminary or permanent
injunction or other order issued by a court of competent jurisdiction, or (B)
other legal restraint or prohibition, including those arising as a result of
the failure to obtain or maintain any necessary governmental approval or
consent shall be in effect preventing or materially affecting the consummation
of the transactions contemplated by this Agreement or any Parent Company
Ancillary Agreements or Corn Products Ancillary Agreements relating to the
transfer of the 26.6% Shares or the 24.4% Shares to Corn Products, unless the
temporary restraining order, preliminary or permanent injunction or other
order affecting the Non-Competition Agreements or the Corporate Name License
was issued at the request of the Parent Companies or any of their Affiliates
or any of the Arancia Entities either directly or by another Person or
Individual acting on their behalf.
8.3. CONDITIONS TO THE SECOND PUT CLOSING. (a) The obligations of Corn
Products to consummate the Second Put Closing are subject to the satisfaction,
on or prior to the Second Put Closing Date, of the following conditions any one
of which may be waived in writing by Corn Products:
(i) The representations and warranties of Aralia contained in Section
4.7 relating to the 24.4% Shares shall be true and correct at the time of the
First Put Closing as though made on such date;
(ii) Aralia shall have performed or complied in all material respects
with all of its covenants, agreements and obligations contained in Section
3.4(c), to the extent the same are required to be performed or complied with
after the First Put Closing and at or prior to the time of the Second Put
Closing; and
(iii) No (A) temporary restraining order, preliminary or permanent
injunction or other order issued by a court of competent jurisdiction, or (B)
other legal restraint or prohibition, including those arising as a result of
the failure to obtain or maintain any necessary governmental approval or
consent, shall be in effect preventing or materially affecting the
consummation of the transactions contemplated by this Agreement or any Parent
Company Ancillary Agreements or Corn Products Ancillary Agreements relating
to the transfer of the 24.4% Shares to Corn Products, unless the temporary
restraining order, preliminary or permanent injunction or other order
affecting the Non-Competition Agreements or the Corporate Name License was
issued at the
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request of the Parent Companies or any of their Affiliates or any of the
Arancia Entities either directly or by another Person or Individual acting on
their behalf.
(b) The obligations of Aralia to consummate the Second Put Closing are
subject to the satisfaction, on or prior to the Second Put Closing Date, of the
following condition which may be waived in writing by Aralia:
(i) No (A) temporary restraining order, preliminary or permanent
injunction or other order issued by a court of competent jurisdiction, or (B)
other legal restraint or prohibition, including those arising as a result of
the failure to obtain or maintain any necessary governmental approval or
consent, shall be in effect preventing or materially affecting the
consummation of the transactions contemplated by this Agreement or any Parent
Company Ancillary Agreements or Corn Products Ancillary Agreements relating
to the transfer of the 24.4% Shares to Corn Products, unless the temporary
restraining order, preliminary or permanent injunction or other order
affecting the Non-Competition Agreements or the Corporate Name License was
issued at the request of the Parent Companies or any of their Affiliates or
any of the Arancia Entities either directly or by another Person or
Individual acting on their behalf.
ARTICLE IX
INDEMNIFICATION
9.1. INDEMNIFICATION BY PARENT COMPANIES. The Parent Companies agree,
jointly and severally, to indemnify and save harmless each Corn Products Group
Member from and against any losses (which shall include any diminution in
value), liabilities, costs or expenses (including interest, penalties and
reasonable attorneys' and experts' fees and disbursements, collectively, the
"Losses") which any such Corn Products Group Member may suffer or incur as a
result of, arising out of or relating to:
(i) any breach of any representation or warranty made by either of the
Parent Companies in this Agreement; or
(ii) any breach or failure of either Parent Company to perform their
covenants or obligations under Sections 6.2 and 6.4 of this Agreement or
Section 5.3 of the Corporate Name License Agreement..
9.2. INDEMNIFICATION BY CORN PRODUCTS. Corn Products agrees to indemnify
and save harmless each Parent Company Group Member from and against any Losses
which any such Parent Company Group Member may suffer or incur as a result of,
arising out of or relating to:
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(i) any breach of any representation or warranty made by Corn Products in
this Agreement; or
(ii) any breach or failure of Corn Products to perform its covenants or
obligations under Sections 6.2 and 6.4 of this Agreement or Section 5.4 of the
Corporate Name License Agreement.
9.3. LIMITATION ON INDEMNIFICATION. (a) The obligations of
indemnification set forth in Sections 9.1 and 9.2 shall not apply to claims for
Losses in amounts less than US$50,000 per occurrence. For all claims in
amounts in excess of US$50,000, such claims may be aggregated and when the
total of all such claims exceeds US$1,000,000 the indemnifying party shall be
required to indemnify the applicable Corn Products Group Member or Parent
Company Group Member, as the case may be, for the amount of all Losses
exceeding US$1,000,000. The obligations of indemnification shall not exceed
the amount of US$5,000,000, except in the cases mentioned in the following
sentence. None of the limitations contained in this Section 9.3 shall apply to
any indemnification obligations arising out of breaches of the representations
and warranties continued in Sections 4.1(a), 4.1(b), the first two sentences of
4.2(a), 4.2(b) insofar as it applies to Aracorn, 4.3, 4.4(a)(i), 4.5 insofar as
it applies to Aracorn, 4.7, 4.8 insofar as it applies to Aracorn, 4.9, 4.11(b)
insofar as it applies to Aracorn, 4.12(a), 4.21A, 5.1, the first two sentences
of 5.2, 5.3, 5.4(a)(i) and 5.6 which shall be indemnifiable in full; provided,
however, that for any such Losses to be indemnifiable, it must be for an amount
in excess of US$50,000 per occurrence and provided, further, that in no event
shall the obligations of indemnification exceed $120,000,000. There shall be no
obligation to indemnify for amounts of Losses covered by insurance.
(b) Notwithstanding anything in Article IX to the contrary, except with
respect to breaches of the representations and warranties contained in Sections
4.1(a) and 4.1(b), 4.2(a), 4.3, 4.4(a)(i), 4.7, and 4.9, the indemnification
obligation of the Parent Companies for any claim based upon any Loss suffered
by the Joint Venture or its Subsidiaries shall be limited to, regardless of the
entity making the claim, 51% of such Loss, which limit is intended to reflect
the interest of the Parent Companies in the Joint Venture or its Subsidiaries
prior to the Initial Closing.
9.4. NOTIFICATION OF CLAIMS. In the event that a Corn Products Group
Member or a Parent Company Group Member has a claim for indemnification under
Section 9.1 or 9.2, as applicable, the applicable Corn Products Group Member or
Parent Company Group Member shall promptly deliver a written notice to the
Party from whom indemnification is requested which shall: (a) state that a Loss
has occurred or is threatened for which such Corn Products Group Member of
Parent Company Group Member is entitled to indemnification pursuant to this
Agreement and (b) specify in reasonable detail each individual Loss including
the amount thereof, if reasonably ascertainable, and the nature of the breach
to which each Loss is related.
9.5. DEFENSE OF CLAIMS. (a) If a Corn Products Group Member or a Parent
Company Group Member has a claim to indemnification relating to an ongoing legal
action, claim
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or proceeding against such Corn Products Group Member or Parent Company Group
Member, the indemnified party in accordance with Section 9.1 or 9.2 (the
"Indemnified Party") shall have the right to conduct and control, through
counsel of its choosing, the defense, compromise or settlement of any third
Person claim, action or suit against such Indemnified Party as to which
indemnification will be sought by any Indemnified Party from any indemnifying
party hereunder (the "Indemnifying Party"), and in any such case the
Indemnifying Party shall cooperate in connection therewith and shall furnish
such records, information and testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested by the
Indemnified Party in connection therewith; provided, that (i) the Indemnifying
Party may participate, through counsel chosen by it and at its own expense, in
the defense of any such claim, action or suit as to which the Indemnified Party
has so elected to conduct and control the defense thereof; and (ii) the
Indemnified Party shall not, without the written consent of the Indemnifying
Party (which written consent shall not be unreasonably withheld), pay,
compromise or settle any such claim, action or suit, except that no such consent
shall be required if, following a written request from the Indemnified Party,
the Indemnifying Party shall fail, within 14 days after the making of such
request, to acknowledge and agree in writing that, if such claim, action or suit
shall be adversely determined, such Indemnifying Party has an obligation to
provide indemnification hereunder to such Indemnified Party. Notwithstanding the
foregoing, the Indemnified Party shall have the right to pay, settle or
compromise any such claim, action or suit without such consent, provided that in
such event the Indemnified Party shall waive any right to indemnity therefor
hereunder unless such consent is unreasonably withheld.
(b) If any third Person claim, action or suit against any Indemnified
Party is solely for money damages or, where the Parent Companies are the
Indemnifying Party, will have no continuing effect in any material respect on
Corn Products or its business, assets or operations, including each of the
Companies, then the Indemnifying Party shall have the right to conduct and
control, through counsel of its choosing, the defense, compromise or settlement
of any such third Person claim, action or suit against such Indemnified Party as
to which indemnification will be sought by any Indemnified Party from any
Indemnifying Party hereunder if the Indemnifying Party has acknowledged and
agreed in writing that, if the same is adversely determined, the Indemnifying
Party has an obligation to provide indemnification hereunder to the Indemnified
Party in respect thereof, and in any such case the Indemnified Party shall
cooperate in connection therewith and shall furnish such records, information
and testimony and attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested by the Indemnifying Party in
connection therewith; provided that the Indemnified Party may participate,
through counsel chosen by it and at its own expense, in the defense of any such
claim, action or suit as to which the Indemnifying Party has so elected to
conduct and control the defense thereof. Notwithstanding the foregoing, the
Indemnified Party shall have the right to pay, settle or compromise any such
claim, action or suit, provided that in such event the Indemnified Party shall
waive any right to indemnity therefor hereunder unless the Indemnified Party
shall have sought the consent of the Indemnifying Party to such payment,
settlement or compromise and such consent was unreasonably withheld, in which
event no claim for indemnity therefor hereunder shall be waived.
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9.6. EXCLUSIVE REMEDY. Each of the Parties hereby acknowledges and
agrees that, after the Initial Closing, the exclusive remedy (whether at law or
equity) with respect to any claims based upon a breach of any of the
representations and warranties contained in Articles IV and V hereof or the
covenants contained in Sections 6.2 and 6.4 hereof or Sections 5.3 and 5.4 of
the Corporate Name License Agreement shall be pursuant to the indemnification
provisions set forth in Article IX hereof. Each of the Parties further
acknowledges and agrees that the indemnification provisions set forth in
Article IX hereof are not the exclusive remedy with respect to any claims based
upon a breach of any covenants, except Sections 6.2 and 6.4 hereof, or Sections
5.3 and 5.4 of the Corporate Name License Agreement whether contained in this
Agreement, the Parent Company Ancillary Agreements or the Corn Products
Ancillary Agreements.
9.7. WAIVER OF CLAIMS. In the event that (i) prior to the Initial
Closing either of the Parent Companies shall give written notice to Corn
Products describing facts and circumstances that result in the representations
and warranties of the Parent Companies contained in this Agreement being untrue
or incorrect as of the time of the Initial Closing in a manner that,
individually or in the aggregate, has a Material Adverse Effect and acknowledges
that the condition set forth in Section 8.1(a)(i) has not been satisfied, and
(ii) Corn Products waives the failure of condition under Section 8.1(a)(i)
resulting therefrom and proceeds to consummate the transactions contemplated to
occur at the Initial Closing, then Corn Products shall be deemed to have waived
any claim for indemnification under Article IX with respect to any such breach
of representation or warranty arising from such facts or circumstances.
9.8. AVAILABLE CLAIMS. Notwithstanding anything else contained in this
Agreement to the contrary, if the representations and warranties of the Parent
Companies shall be untrue as of the time of the Initial Closing but not in a
manner that has a Material Adverse Effect, Corn Products shall have the right to
make a claim pursuant to Article IX hereof with respect to any such breach of
representation or warranty and shall not be deemed to have waived its right to
make such a claim by virtue of having consummated the Initial Closing.
ARTICLE X
TERMINATION
10.1. TERMINATION. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Initial Closing Date:
(a) by the mutual consent of Corn Products and the Parent Companies; or
(b) by Corn Products or the Parent Companies if the Initial Closing shall
not have occurred on or before March 31, 1999 (or such later date as may be
mutually agreed to by Corn Products and each Parent Company).
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10.2. NOTICE OF TERMINATION. Any party desiring to terminate this
Agreement pursuant to Section 10.1 shall give notice of such termination to the
other party to this Agreement.
10.3. EFFECT OF TERMINATION. In the event that this Agreement shall be
terminated pursuant to this Article X, all further obligations of the parties
under this Agreement (other than Sections 7.3, 7.5, 11.2, 11.10 and 11.11) shall
be terminated without further liability of any party to the other, provided that
nothing herein shall relieve any party from liability for its willful breach of
this Agreement.
ARTICLE XI
GENERAL PROVISIONS
11.1. SURVIVAL OF OBLIGATIONS. All representations, warranties,
covenants, agreements and obligations contained in this Agreement shall survive
the consummation of the transactions contemplated by this Agreement; provided,
however, that the representations and warranties contained in Articles IV and V
(other than the representations and warranties contained in Sections 4.1(a),
4.1(b), the first two sentences of 4.2(a), 4.2(b) insofar as it applies to
Aracorn, 4.3, 4.4(a)(i), 4.5 insofar as it applies to Aracorn, 4.7, 4.8 insofar
as it applies to Aracorn, 4.9, 4.11(b) insofar as it applies to Aracorn,
4.12(a), 4.21A, 5.1, the first two sentences of 5.2, 5.3, 5.4(a)(i) and 5.6,
which shall survive indefinitely) shall terminate on the date that is six months
after the Initial Closing Date and the covenants contained in Sections 6.2 and
6.4 shall terminate on the date that is six months after the applicable Closing
Date. Except as otherwise provided herein, no claim shall be made for the
breach of any representation or warranty contained in Article IV or V under this
Agreement after the date on which such representations and warranties terminate
as set forth in this Section.
11.2. NOTICES. Any notice, consent, authorization, direction or other
communication required or permitted to be given hereunder shall be in writing
and shall be delivered either by personal delivery or by telecopier or similar
telecommunication device, and addressed as follows:
If to Corn Products, to:
6500 South Archer Road
Bedford Park, IL 60501-1933
Attention: General Counsel
FAX: (708) 563-6592
with a copy to:
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Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: John M. O'Hare
FAX: (312) 853-7036
If to Aralia, to:
Lopez Cotilla 2032 - Mezzanine
Sector Juarez
Guadalajara, Jal. 44100
Mexico
Attention: General Counsel
FAX: 011-523-818-3395
If to Arinsa, to:
Lopez Cotilla 2032 - 8th Floor
Sector Juarez
Guadalajara, Jal. 44100
Mexico
Attention: General Counsel
FAX: 011-523-818-3387
with a copy to:
Davis Polk & Wardwell
450 Lexinton Avenue
New York, NY 10017
Attention: George R. Bason, Jr.
FAX: (212) 450-4800
Any notice, consent, authorization, direction or other communication delivered
as aforesaid shall be deemed to have been effectively delivered and received, if
sent by telecopier or similar telecommunications device upon receipt of
confirmation of such transmission or, if delivered, on the date of such
delivery; provided, however, that if such date is not a Business Day then it
shall be deemed to have been delivered and received on the Business Day next
following such delivery. Any Party may change its address by written notice
delivered as aforesaid.
11.3. LANGUAGE. This Agreement is made and signed in the English language.
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11.4. SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding upon
and inure to the benefit of the Parties and the respective successors and
assigns; provided, however, that neither party shall have the right to transfer
or assign its interest in this Agreement without the prior written consent of
the other parties, which consent shall not be unreasonably withheld.
(b) Notwithstanding the foregoing provisions of this Section 11.4, at any
time after the transfer of the 26.6% Shares and the 24.4% Shares to Corn
Products, Corn Products may assign its rights and obligations under this
Agreement to any corporation or other entity that shall acquire all or
substantially all of Corn Products' business and assets and which shall assume
in writing all of Corn Products' obligations hereunder and deliver a signed
copy of such assumption agreement to the Parent Companies.
11.5. AMENDMENTS. This Agreement shall not be amended, modified or
supplemented except by a written instrument signed by an authorized
representative of each of the Parties.
11.6 DISCLAIMER OF WARRANTIES. EXCEPT AS TO THOSE MATTERS EXPRESSLY
COVERED BY THE REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT, THE PARENT
COMPANIES AND CORN PRODUCTS EACH DISCLAIM ALL OTHER WARRANTIES, REPRESENTATIONS
AND GUARANTIES WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY
WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PROPOSE AND ANY
OTHER IMPLIED WARRANTIES.
11.7. WAIVERS. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the Party or Parties entitled
to the benefit thereof. Any such waiver shall be validly and sufficiently given
for the purposes of this Agreement if, as to any Party, it is in writing signed
by an authorized representative of such Party. The failure of any Party hereto
to enforce at any time any provision of this Agreement shall not be construed to
be a waiver of such provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of any Party thereafter to enforce
each and every such provision. No waiver of any of the provisions of this
Agreement shall be deemed to constitute a waiver of any other provisions
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided in an instrument duly executed by the Party
to be bound thereby.
11.8. SEVERABILITY. Any Article, Section or other subdivision of this
Agreement or any other provision of this Agreement which is, or becomes,
illegal, invalid or unenforceable shall be severed from this Agreement and shall
be ineffective to the extent of such illegality, invalidity or unenforceability,
but the Parties shall in good faith agree on a substitute provision that is
legal, valid and enforceable and that most closely reflects the intention of the
Parties. Such severed and ineffective provision shall not affect or impair the
remaining provisions hereof, which provisions shall (i) be severed from any
illegal, invalid or unenforceable Article, Section or other
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subdivision of this Agreement or any other provision of this Agreement and (ii)
otherwise remain in full force and effect.
11.9. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
several identical counterparts, each of which when executed and delivered by the
Parties hereto shall be an original, but all of which together shall constitute
a single instrument.
11.10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of New York, United States of America.
11.11. SUBMISSION TO JURISDICTION. Each Parent Company and Corn Products
hereby irrevocably submits in any suit, action or proceeding arising out of or
related to this Agreement or any of the transactions contemplated hereby or
thereby to the exclusive jurisdiction of any court of the State of New York,
United States of America and waives any and all objections to jurisdiction that
they may have under the laws of the State of New York, the United States of
America or the Republic of Mexico and any claim or objection that any such court
is an inconvenient forum.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
CORN PRODUCTS INTERNATIONAL INC.
By: ___________________________
Name:
Title:
PROMOCIONES INDUSTRIALES ARALIA, S.A. DE C.V.
By: ___________________________
Name:
Title:
ARANCIA INDUSTRIAL S.A. DE C.V.
By: ___________________________
Name:
Title:
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