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EXECUTION VERSION
OPTION AGREEMENT
Option Agreement made this 21st day of October, 1998, by and among Corn
Products International, Inc., a Delaware corporation ("Corn Products") and
Promociones Industriales Aralia, S.A. de C.V., a corporation organized and
existing under the laws of the Republic of Mexico ("Aralia").
WHEREAS, Corn Products has entered into that certain Transaction Agreement
dated as of October 21, 1998 (the "Transaction Agreement") with Arancia
Industrial S.A. de C.V., a corporation organized and existing under the laws of
the Republic of Mexico ("Arinsa"), and Aralia. Unless otherwise specified
herein, all capitalized terms used or incorporated by reference herein without
definition shall have the meanings set forth in the Transaction Agreement.
WHEREAS, pursuant to the Transaction Agreement, Corn Products (i) agreed to
purchase from Aralia, and Aralia agreed to sell to Corn Products, forty-nine
percent of the outstanding capital stock of Aracorn S.A. de C.V., a corporation
organized under the laws of the Republic of Mexico ("Aracorn"), and (ii) granted
to Aralia options to sell the remaining fifty-one percent of the outstanding
capital stock of Aracorn to Corn Products on the terms and conditions set forth
therein.
WHEREAS, Aralia desires to grant to Corn Products, and Corn Products
desires to have, options to purchase the remaining fifty-one percent of the
outstanding capital stock of Aracorn from Aralia on the terms and conditions set
forth herein.
NOW THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement and the Transaction Agreement and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Corn Products and Aralia covenant and agree as follows:
ARTICLE I
PURCHASE OF SHARES
1.1. PURCHASE AND SALE OF SHARES. (a) At the option of Corn Products,
exercised by written notice (the "First Call Exercise Notice") delivered to
Aralia no later than two Business Days prior to the First Call Closing Date, and
upon the terms and subject to the conditions of this Agreement, on the First
Call 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.
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(b) At the option of Corn Products, exercised by written notice (the
"Second Call Exercise Notice") delivered to Aralia no later than December 1,
2003, and upon the terms and subject to the conditions of this Agreement, on the
Second Call 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.
1.2. PURCHASE PRICE. (a) The purchase price for the 26.6% Shares (the
"First Call 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 Call 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 Call 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 Call 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 Call Closing Date.
(b) The purchase price for the 24.4% Shares (the "Second Call 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 Call Closing Date at the Agreed Rate, subject to adjustment, if
any, pursuant to Section 3.2 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
the Second Call Closing Date at the Agreed Rate, subject to adjustment pursuant
to Section 3.2 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 Call 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 Call Closing Date.
(c) 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 Call Purchase
Price or the Second Call 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.
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ARTICLE II
CLOSING AND PURCHASE PRICE ADJUSTMENT
2.1. CLOSING DATE. (a) If the First Call Exercise Notice shall have been
delivered by Corn Products as provided in Section 1.1(a), the First Call Closing
shall take place on the date that is thirteen months after the Initial Closing
Date (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,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 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 Call 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) of the Transaction
Agreement to consummate such closing. The date on which the First Call Closing
is actually held is sometimes referred to herein as the "First Call Closing
Date."
(b) If the Second Call Exercise Notice shall have been delivered by Corn
Products as provided in Section 1.1(b), the Second Call 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 Call Exercise Notice, at
the offices of Sidley & Austin, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 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 Call Closing take place unless the
transfer of the 26.6% Shares to Corn Products shall have occurred and, in any
event, the Second Call Closing shall not take place before the date that is
nineteen 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 Call 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) of the Transaction Agreement to
consummate such closing. The time and date on which the Second Call Closing is
actually held are sometimes referred to herein as the "Second Call Closing
Date."
2.2. PAYMENT OF PURCHASE PRICE; DELIVERY OF SHARES. (a) Subject to the
fulfillment or waiver of the conditions set forth in Section 8.2 of the
Transaction Agreement, at the First Call Closing:
(i) Corn Products shall:
(A) pay, without any right of setoff, to Aralia an amount equal to (x)
the First Call Purchase Price or (y) the cash component of the First Call
Purchase
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Price as described in Section 1.2(a) 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 Call 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 Call 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 26.6% Shares, duly endorsed in favor of Corn Products to Corn Products
or such other Affiliate as Corn Products may specify in writing at least
two Business Days prior to the First Call 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 of the Transaction Agreement, at the Second Call Closing:
(i) Corn Products shall:
(A) pay, without any right of setoff, to Aralia an amount equal to (x)
the Second Call Purchase Price or (y) the cash component of the Second Call
Purchase Price as described in Section 1.2(b) 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 Call 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 Call 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 as Corn Products may specify in writing at least two Business Days
prior to the Second Call
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Closing Date (provided that Corn Products may not designate an Affiliate if
such designation would adversely affect or delay the Closing).
2.3. ARALIA'S ADDITIONAL DELIVERIES. Subject to fulfillment or waiver of
the conditions set forth in Section 8.2(b) of the Transaction Agreement (which
Section is hereby incorporated by reference herein), at the First Call Closing
and the Second Call Closing Aralia shall deliver to Corn Products all of the
documents relating to Aralia set forth in Section 3.4(b) and Section 3.4(c) of
the Transaction Agreement (which Sections are hereby incorporated by reference
herein).
ARTICLE III
OTHER AGREEMENTS
3.1. ESCROW AND TRUST AGREEMENT. Concurrently with the execution of this
Agreement, the parties hereto agree to enter into and abide by the terms of the
Informal Escrow Agreement in the form attached as Exhibit A. At the earlier of
the First Call Closing hereunder or the First Put Closing under the Transaction
Agreement, the parties hereto agree to enter into and abide by the terms of the
Trust Agreement in the form attached as Exhibit B. The obligation of Aralia to
enter into the Informal Escrow Agreement and the Trust Agreement shall be deemed
to be obligations of Aralia under Sections 3.4(a) and (b) of the Transaction
Agreement at the Initial Closing and the First Put Closing, respectively.
3.2. DIVIDENDS. (a) In the event that prior to the transfer of the 24.4%
Shares to Corn Products or its designee 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 designee but prior to the transfer
of the 24.4% Shares to Corn Products or its designee, the Second Call 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 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 Call 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 designee be in excess of the Second Call 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,
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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 3.2 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
designee.
3.3. TRANSFER RESTRICTIONS. Aralia hereby agrees that it will not directly
or indirectly sell, assign, exchange, transfer, distribute or otherwise dispose
of, pledge or otherwise encumber (or enter into any agreement to do so), any
shares of capital stock of Aracorn except as contemplated by this Agreement or
the Transaction Agreement or with the prior written consent of Corn Products.
ARTICLE IV
GENERAL PROVISIONS
4.1. FURTHER ASSURANCES. Each of Aralia and Aracorn hereby agrees to
execute and deliver, or cause to be executed and delivered, to Corn Products,
such other bills of sale, assignments, proxies, options and other instruments of
conveyance and transfer as Corn Products shall reasonably request or as may be
otherwise necessary to carry out the terms and provisions of and consummate the
transactions contemplated by this Agreement.
4.2. INCORPORATION BY REFERENCE. The terms "First Put Closing," "First Put
Closing Date," "Second Put Closing," and "Second Put Closing Date" as used in
any provisions of the Transaction Agreement expressly incorporated by reference
herein shall be deemed to refer to the First Call Closing, First Call Closing
Date, Second Call Closing, and Second Call Closing Date, respectively, for
purposes of this Agreement.
4.3. 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:
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000-0000
Attention: General Counsel
FAX: (000) 000-0000
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with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. X'Xxxx
FAX: (000) 000-0000
If to Aralia, to:
Xxxxx Xxxxxxx 2032-Mezzanine
Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx. 00000
Xxxxxx
Attention: General Counsel
FAX: 000-000-000-0000
with a copy to:
Xxxxx, Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx.
FAX: (000) 000-0000
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.
4.4. LANGUAGE. This Agreement is made and signed in the English language.
4.5. SUCCESSORS AND ASSIGNS. 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.
4.6. 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.
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4.7. 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 subdivision of this
Agreement or any other provision of this Agreement and (ii) otherwise remain in
full force and effect.
4.8. 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.
4.9. 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.
4.10. SUBMISSION TO JURISDICTION. Each of Aralia, Aracorn 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.
4.11. 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.
4.12 ENTIRE AGREEMENT; AMENDMENTS. The Transaction Agreement, this Option
Agreement, the Stockholder Agreement and the Exhibits and Schedules referred to
herein and therein and the documents delivered pursuant hereto and thereto and
the two letter agreements between Corn Products and Aralia dated the date of the
Transaction Agreement contain the entire understanding of the parties hereto
with regard to the subject matter contained herein or therein, and supersede all
prior agreements, understandings or letters of intent between or among any of
the parties hereto, including without limitation the Confidentiality Agreement.
This Option Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of the
Parties.
4.13 ACKNOWLEDGMENT. Each of Aralia, Aracorn and Corn Products
acknowledges that this Agreement constitutes a Parent Company Ancillary
Agreement and a Corn Products Ancillary Agreement as those terms are used in the
Transaction Agreement. Each of
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Aralia, Aracorn and Corn Products acknowledges that the Optional Shares referred
to in this Agreement constitute Consideration Shares as used in the Stockholder
Agreement to be entered into by Corn Products, Arinsa and Aralia pursuant to the
Transaction Agreement.
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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:
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