FORM OF
DEBT AGREEMENT
This DEBT AGREEMENT, dated as of __________, 1997, (this
"Agreement"), by and between CPC International Inc., a Delaware
corporation ("CPC"), and Corn Products International, Inc., a
Delaware corporation ("Corn Products").
WHEREAS, as contemplated in the Distribution Agreement, the
parties have entered into this Agreement regarding the
indebtedness to be borne by Corn Products and the Corn Products
Consolidated Subsidiaries; and
WHEREAS, CPC intends to reduce the indebtedness of CPC and
the CPC Consolidated Subsidiaries by the proceeds of New Debt,
and any proceeds of New Assumed Debt, mutually agreed to be
incurred or assumed by Corn Products and the Corn Products
Consolidated Subsidiaries;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement and the
Distribution Agreement, the parties hereto agree as follows:
SECTION 1. Certain Definitions. All capitalized terms not
otherwise defined shall have the meanings set forth below (such
meanings to be equally applicable to both the singular and the
plural forms of the terms defined). Any reference by name to any
entity owned directly or indirectly by CPC shall be deemed to
include any successor entity thereto.
"Agreement" shall have the meaning ascribed thereto in the
preamble.
"Brazilian Distribution" shall mean the distribution by
Refinacoes de Milho, Brasil Ltda. (a wholly owned subsidiary of
CPC organized and operating under the laws of Brazil) to CPC of
all of the outstanding equity of Brazilian Newco.
"Brazilian Newco" shall mean the Brazilian entity engaged
solely in the corn refining business which will result from the
transfer of all of the assets and liabilities of the corn
refining business of Refinacoes de Milho, Brasil Ltda. to said
Brazilian entity.
"Canadian Distribution" shall mean the distribution by
Canada Starch Operating Company, Inc. (a wholly owned subsidiary
of CPC organized and operating under the laws of Canada) to CPC
of all of the outstanding stock of Canadian Newco.
"Canadian Newco" shall mean the Canadian entity engaged
solely in the corn refining business which will result from the
transfer of all of the assets and liabilities of the corn
refining business of Canada Starch Operating Company, Inc. to
said Canadian entity.
"Chilean Distribution" shall mean the distribution by
Industrias de Maiz y Alimentos S.A. (a wholly owned subsidiary of
CPC organized and operating under the laws of Chile) to CPC of
all of the outstanding stock of Chilean Newco.
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"Chilean Newco" shall mean the Chilean entity engaged
solely in the corn refining business which will result from the
transfer of all of the assets and liabilities of the corn
refining business of Industrias de Maiz y Alimentos S.A. to said
Chilean entity.
"Corn Products" shall have the meaning ascribed thereto in the
preamble.
"Corn Products Consolidated Existing Debt" shall have the
meaning ascribed thereto in Section 2(a).
"Corn Products Consolidated New Debt Amount" shall have the
meaning ascribed thereto in Section 2(a).
"Corn Products Consolidated Subsidiaries" shall mean all
entities, wherever organized, that, in accordance with GAAP, are
included in the consolidated financial statements of Corn
Products as of the Distribution Time.
"Corn Products Tax Balance Sheet" shall mean (i) as of the
date hereof, the tax balance sheet set forth in Schedule B,
reflecting the latest estimate of the book assets, liabilities
and net equity of Corn Products on a stand-alone basis as of the
Distribution Time, and adjusted for United States federal income
tax differences, as determined by CPC in accordance with past
practices consistently applied (which such determination shall be
final and binding upon the
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parties), and (ii) as of the CPC Adjustment Date, the Final Corn
Products Balance Sheet, as adjusted to reflect United States
federal income tax differences determined by CPC in accordance
with past practices consistently applied (which such
determination shall be final and binding upon the parties).
"Corn Products Total Consolidated Debt Amount" shall have
the meaning ascribed thereto in Section 2(a).
"CPC" shall have the meaning ascribed thereto in the preamble.
"CPC Adjustment Date" shall have the meaning ascribed
thereto in Section 4(a).
"CPC Base Amount" shall mean the aggregate amount of CPC's
unrecovered investment for United States federal income tax
purposes in all of the assets (including the stock of domestic
and foreign corporations), net of liabilities (including
liabilities to which said assets are subject, but excluding
contingent and unknown liabilities), contributed by CPC directly
to Corn Products in contemplation of the Distribution and
reflected on the Corn Products Tax Balance Sheet, which amount
shall be determined by CPC, in accordance with past practices
consistently applied (which such determination shall be final and
binding upon the parties), as of the date of the contribution of
each such asset to Corn Products.
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"CPC Consolidated Subsidiaries" shall mean all entities,
wherever organized, that, in accordance with GAAP, are included
in the consolidated financial statements of CPC as of the
Distribution Time.
"CPC Foreign Distributing Company" shall mean each of (i)
Canada Starch Operating Company, Inc., (ii) Refinacoes de Milho,
Brasil Ltda. and (iii) Industrias de Maiz y Alimentos S.A.
"CPC Foreign Distributing Company Base Amount" shall mean
the aggregate amount of the unrecovered investment for United
States federal income tax purposes of (i) Canada Starch Operating
Company, Inc. in all of the assets, net of all liabilities
(including liabilities to which said assets are subject, but
excluding contingent and unknown liabilities) other than New
Assumed Debt, transferred to Canadian Newco in contemplation of
the Canadian Distribution, (ii) Refinacoes de Milho, Brasil Ltda.
in all of the assets, net of all liabilities (including
liabilities to which said assets are subject, but excluding
contingent and unknown liabilities) other than New Assumed Debt,
transferred to Brazilian Newco in contemplation of the Brazilian
Distribution, and (iii) Industrias de Maiz y Alimentos S.A. in
all of the assets, net of all liabilities (including liabilities
to which said assets are subject, but excluding contingent and
unknown liabilities) other than New Assumed Debt, transferred to
Chilean Newco in contemplation of the Chilean Distribution,
determined in each case by CPC, in accordance with past practices
consistently applied (which such determination shall be final and
binding upon the parties), as of the date of each of the
respective contributions, and reflected on the respective Foreign
Newco Tax Balance Sheet.
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"Distribution" shall have the meaning ascribed thereto in the
Distribution Agreement.
"Distribution Agreement" shall mean that certain
Distribution Agreement dated as of __________, 1997, by and between
CPC and Corn Products, and to which this Agreement is an Ancillary
Agreement (as defined in the Distribution Agreement).
"Distribution Time" shall mean the close of business on the
Distribution Date, immediately after the Distribution. For this
purpose, "Distribution Date" shall mean such date as may be
determined by the board of directors of CPC as the date on which
the Distribution shall occur.
"Final Corn Products Balance Sheet" shall have the meaning
ascribed thereto in Section 4(a).
"Final Foreign Newco Balance Sheet" shall have the meaning
ascribed thereto in Section 4(b).
"Foreign Adjustment Date" shall have the meaning ascribed
thereto in section 4(b).
"Foreign Distribution" shall mean each of the Brazilian
Distribution, the Canadian Distribution and the Chilean
Distribution.
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"Foreign Distribution Time" shall mean with respect to each
Foreign Distribution, the close of business on the Foreign
Distribution Date, immediately after the Foreign Distribution.
For this purpose, "Foreign Distribution Date" shall mean with
respect to each Foreign Distribution, such date as may be
determined by the board of directors (or equivalent governing
body) of the respective CPC Foreign Distributing Company as the
date on which such Foreign Distribution shall occur.
"Foreign Newco" shall mean each of Brazilian Newco,
Canadian Newco and Chilean Newco.
"Foreign Newco Tax Balance Sheet" shall mean (i) as of the
date hereof, the tax balance sheet of each Foreign Newco prepared
by CPC and included in Schedule B, each reflecting the assets,
liabilities and net equity of the respective Foreign Newco as of
the relevant Foreign Distribution Time, as adjusted for United
States federal income tax differences determined by CPC in
accordance with past practices consistently applied (which such
determination shall be final and binding upon the parties) and
(ii) as of each Foreign Adjustment Date, the respective Final
Foreign Newco Balance Sheet, as adjusted for United States
federal income tax differences determined by CPC in accordance
with past practices consistently applied (which such
determination shall be final and binding upon the parties).
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"GAAP" means United States generally accepted accounting
principles and practices, as in effect on the date of this
Agreement, as promulgated by the Financial Accounting Standards
Board and its predecessors.
"Indebtedness" shall mean all interest bearing debt for
money borrowed whether or not evidenced by securities, without
regard to whether such debt is accounted for as a current or
long-term liability on the balance sheet of the borrower, except
that Indebtedness shall not include (i) any debt to CPC, any CPC
Consolidated Subsidiary, Corn Products or any Corn Products
Consolidated Subsidiary, (ii) any trade or non-trade accounts
payable or similar liabilities or (iii) any leases (whether
accounted for as a capital lease or an operating lease).
"New Assumed Debt" shall mean Indebtedness incurred by CPC
or a CPC Consolidated Subsidiary, with respect to which the
lender agrees that (i) such Indebtedness will be transferred to
Corn Products or a Corn Products Consolidated Subsidiary on or
prior to the Distribution Date, (ii) such Indebtedness will, upon
such transfer, become the liability of Corn Products or a Corn
Products Consolidated Subsidiary, and (iii) CPC and the CPC
Consolidated Subsidiaries will be discharged from any liability
related thereto. All Indebtedness of a CPC Foreign Distributing
Company that is to be transferred to a Foreign Newco as part of a
Foreign Distribution shall also be regarded as New Assumed Debt.
"New Debt" shall mean Indebtedness, other than Corn
Products Consolidated Existing Debt or New Assumed Debt, for
money borrowed from banks, financial institutions or other
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similar lenders, but shall not include any debt to CPC, any CPC
Consolidated Subsidiary, Corn Products or any Corn Products
Consolidated Subsidiary.
"Notice" shall have the meaning ascribed thereto in Section 6(h).
"Section" shall mean a section of this Agreement.
SECTION 2. Debt Undertaking.
(a) Corn Products Total Consolidated Debt. The parties
agree that at the Distribution Time, (i) the Corn Products Total
Consolidated Debt Amount shall be an amount equal to $350
million, and (ii) the Corn Products Consolidated New Debt Amount
shall be the excess of the Corn Products Total Consolidated Debt
Amount over the Corn Products Consolidated Existing Debt. For
purposes hereof, the Corn Products Consolidated Existing Debt
shall be the total amount of Indebtedness, as of September 30,
1997 (or such other date as the parties may mutually agree), of
all Corn Products Consolidated Subsidiaries. The amount of Corn
Products Consolidated Existing Debt held by each of the relevant
Corn Products Consolidated Subsidiaries is set forth in the
Schedule A.
(b) Corn Products Consolidated New Debt Amount. After
September 30, 1997 (or such other date as the parties may
mutually agree), but not later than December 31, 1997, (i) Corn
Products shall incur New Debt and pay the proceeds of such New
Debt to CPC; and (ii) each
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Corn Products Consolidated Subsidiary designated by Corn Products
and agreed to by CPC shall assume New Assumed Debt from CPC or a
CPC Consolidated Subsidiary. The total of said New Debt to be
incurred by CPC and New Assumed Debt to be assumed by Corn
Products Consolidated Subsidiaries shall be equal to the Corn
Products Consolidated New Debt Amount. The allocation of the Corn
Products Consolidated New Debt Amount among Corn Products and
each of the Corn Products Consolidated Subsidiaries designated by
Corn Products and agreed to by CPC, for the purpose of
determining the amount of New Debt or New Assumed Debt to be
incurred or assumed by each, shall be as set forth in Schedule A.
Such allocation shall take into account the agreements set forth
in Sections 2(c) and 2(d). The parties may agree that, in lieu of
incurring New Debt, Corn Products will assume New Assumed Debt in
respect of all or any portion of the amount of the Corn Products
Consolidated New Debt Amount allocable to Corn Products. All
proceeds of New Debt, and the proceeds, if any, of all New
Assumed Debt referred to herein shall be used exclusively to
retire Indebtedness of CPC and the CPC Consolidated Subsidiaries.
(c) Corn Products Debt. The parties agree that the portion
of the Corn Products Consolidated New Debt Amount to be allocated
to Corn Products shall not exceed the CPC Base Amount.
(d) Foreign Newco Debt. The parties agree that the portion
of the Corn Products Consolidated New Debt Amount to be allocated
to any Foreign Newco shall not exceed the CPC Foreign
Distributing Company Base Amount.
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SECTION 3. Preliminary Balance Sheets. Included herewith
and attached hereto as Schedule B are book and tax balance
sheets, reflecting the latest estimate of the assets, liabilities
and net equity of (i) Corn Products on a stand-alone basis as of
the Distribution Time and (ii) each Foreign Newco as of the
respective Foreign Distribution Time. Said balance sheets shall
provide the basis for determining, for purposes of Sections 2(c)
and 2(d), the amounts, prior to adjustments, of the CPC Base
Amount and each Foreign Distributing Company Base Amount.
SECTION 4. Final Balance Sheets.
(a) As soon as practicable after the Distribution Time, but
in any event within sixty (60) days following the Distribution
Time (the "CPC Adjustment Date"), CPC shall deliver to Corn
Products (i) a book balance sheet prepared by CPC in cooperation
with Corn Products reflecting the final determination of the
assets, liabilities and net equity as of the Distribution Time of
Corn Products on a stand-alone basis (the "Final Corn Products
Balance Sheet") and (ii) the Corn Products Tax Balance Sheet,
computed from the Final Corn Products Balance Sheet.
(b) As soon as practicable after each Foreign Distribution
Time, but in any event within sixty (60) days following the
respective Foreign Distribution Time (each, a "Foreign Adjustment
Date"), CPC shall deliver to Corn Products (i) book balance
sheets prepared by CPC in cooperation with Corn Products
reflecting the final determination of the assets, liabilities and
net equity as of the respective Foreign Distribution Time of each
Foreign Newco ("Final Foreign
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Newco Balance Sheets") and (ii) the corresponding final Foreign
Newco Tax Balance Sheets, computed from the Final Foreign Newco
Balance Sheets.
(c) Each of the book balance sheets described in Sections
3, 4(a) and 4(b) are or shall be prepared in accordance with GAAP
applied in a manner consistent with CPC's past practices.
SECTION 5. Adjustments.
(a) If the portion of the Corn Products Consolidated New
Debt Amount allocated directly to Corn Products exceeds the CPC
Base Amount indicated by the Corn Products Tax Balance Sheet
computed from the Final Corn Products Balance Sheet, CPC shall
pay to Corn Products an amount of cash equal to such excess. In
such an event, Corn Products will cause a Corn Products
Consolidated Subsidiary to (i) assume New Assumed Debt in the
amount of such excess, or if agreed to by the parties, (ii) incur
New Debt in the amount of such excess and pay to CPC or the
relevant CPC Foreign Distributing Company the proceeds of such
New Debt.
(b) If the portion of the Corn Products Consolidated New
Debt Amount allocated to any Foreign Newco exceeds the
corresponding CPC Foreign Distributing Company Base Amount
indicated by the Foreign Newco Tax Balance Sheet computed from
the respective Final Foreign Newco Balance Sheet, the respective
CPC Foreign Distributing Company shall pay to the applicable
Foreign Newco an amount of cash equal to such excess. In such an
event, Corn Products will, or will cause a Corn Products
Consolidated Subsidiary to, (i) assume New
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Assumed Debt in the amount of such excess or, if agreed to by the
parties, (ii) incur New Debt in the amount of such excess and pay
to CPC or the relevant CPC Foreign Distributing Company the
proceeds of such New Debt.
SECTION 6. Miscellaneous Provisions.
(a) Termination. This Agreement may not be terminated except
by an agreement in writing signed by all of the parties hereto.
(b) Further Actions. If at any time after the Distribution
Time any further action is necessary or desirable to carry out
the purposes of this Agreement, either of the parties shall, on
the written request of the other, take all such reasonably
necessary or desirable action.
(c) Cooperation. The parties hereto agree to use their
reasonable best efforts to cooperate with respect to the various
matters contemplated by this Agreement.
(d) Successors and Assigns. Except as otherwise expressly
provided herein, no party hereto may assign or delegate, whether
by operation of law or otherwise, any of such party's rights or
obligations under or in connection with this Agreement without
the written consent of the other party hereto, and any attempt to
so assign or delegate any of said rights or obligations without
such consent shall be void. Except as otherwise expressly
provided herein, all covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto will be
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binding upon and enforceable against the respective
successors and assigns of such party and will be enforceable by
and will inure to the benefit of the respective successors and
permitted assigns of such party.
(e) Modification; Waiver; Severability. This Agreement may
be amended, supplemented or waived only by a subsequent writing
signed by all of the parties hereto. The failure of any party
hereto to require strict performance by any other party of any
provision of this Agreement will not waive or diminish that
party's right to demand strict performance thereafter of that or
any other provision hereof. If any provision of this Agreement or
the application thereof is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision in
circumstances other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect
and in no way be affected, impaired or invalidated thereby, so
long as the economic or legal substance of the transaction
contemplated hereby is not affected in any manner adverse to any
party.
(f) Counterparts. This Agreement may be executed with
counterpart signature pages or in one or more counterparts, all
of which shall be one and the same Agreement, and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to all the parties hereto.
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(g) Descriptive Headings. The descriptive headings of the
Agreement are inserted for the convenience of reference only and
are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
(h) Notices. All notices, consents, requests, waivers or
other communications required or permitted under this Agreement
(each a "Notice") shall be in writing and shall be sufficiently
given if (a) hand delivered or sent by telecopy or any means of
electronic transmission with delivery confirmed (by voice or
otherwise), (b) sent by nationally recognized overnight courier,
or (c) sent by registered or certified mail, postage prepaid,
return receipt requested, and in each case addressed as follows:
If to CPC at: X.X. Xxx 0000
Xxxxxxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxx, XX 00000
Telecopy: 0-000-000-0000
Attn: Vice President-Taxes
with a copy to: General Counsel
If to Corn Products at: X.X. Xxx 000
0000 Xxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
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Telecopy: 0-000-000-0000
Attn: Chief Financial Officer
with a copy to: General Counsel
or such other address as shall be furnished by any of the parties
in a Notice. Any Notice shall be deemed given upon receipt.
(i) Survival. Except as otherwise expressly provided
herein, all covenants and agreements of the parties contained in
this Agreement shall survive the Distribution Time.
(j) Binding Effect. This Agreement shall be executed by CPC
and Corn Products on their own behalf and on behalf of their
respective affiliates, which in the case of CPC shall mean the
CPC Consolidated Subsidiaries, and in the case of Corn Products
shall mean the Corn Products Consolidated Subsidiaries, including
each Foreign Newco. Each of CPC and Corn Products agrees to cause
its respective affiliates to perform, and hereby guarantees the
performance of, each and every one of the obligations hereunder
to be performed by such affiliates.
(k) No Third Party Beneficiaries. This Agreement is solely
for the benefit of the parties hereto and their respective
affiliates, and shall not be deemed to confer upon third parties
any remedy, claim, liability, right of reimbursement, action or
other right in excess of those existing without reference to this
Agreement.
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(l) Dispute Resolution. Article VI of the Distribution
Agreement shall apply hereto and shall be deemed incorporated
herein by reference with respect to any dispute arising out of
the interpretation, implementation or compliance with the
provisions of this Agreement.
(m) Governing Law and Consent to Jurisdiction. This
Agreement shall be governed by, and construed and enforced in
accordance with, the law of the State of New York without regard
to the principles of conflicts of laws thereunder. Without
limiting Article VI of the Distribution Agreement, each of the
parties irrevocably submits to the exclusive jurisdiction of the
Superior Court of the State of New Jersey, Bergen County, or the
United States District Court for the District of New Jersey, for
purposes of any suit, action or other proceeding arising out of
this Agreement. Each of the parties agrees to commence any
action, suit or proceeding relating hereto that is not required
to be submitted to arbitration pursuant to Article VI of the
Distribution Agreement either in the United States District Court
for the District of New Jersey or if such suit, action or other
proceeding may not be brought in such court for jurisdictional
reasons, in the Superior Court of the State of New Jersey, Bergen
County. Each of the parties further agrees that service of any
process, summons, notice or document by United States registered
mail to such party's respective address set forth above shall be
effective service of process for any such action, suit or
proceeding in New Jersey with respect to any matters to which it
has submitted to jurisdiction. Each of the parties irrevocably
and unconditionally waives any objection to the laying of venue
of any action, suit or proceeding arising out of this Agreement
in the Superior Court of the State of New Jersey, Bergen County,
or the United States District Court for the
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District of New Jersey, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
CPC INTERNATIONAL INC. CORN PRODUCTS INTERNATIONAL, INC.
By _______________________ By_______________________________
Name: Name:
Title: Title:
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