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Exhibit 10.33
CONTRACT FOR MANAGEMENT SERVICES ENTERED INTO ON August 29, 1997 BY ONE PARTY
LIBBEY INC., organized under the laws of the State of Delaware REPRESENTED BY
ARTHUR H. SMITH REFERRED TO HENCEFORTH AS LIBBEY AND BY THE OTHER PARTY,
VITROCRISA, S.A. DE C.V., REFERRED TO HENCEFORTH AS "VITROCRISA" REPRESENTED BY
ROBERTO RUBIO BEING THE RECIPIENT OF THE ADMINISTRATIVE SERVICES THAT THROUGH
THIS MEDIUM "LGA 3" WILL PROVIDE
INTRODUCTION
Vitro, Sociedad Anonima, a Mexican corporation ("VITRO") and Libbey a
corporation organized under the laws of the State of Delaware, desire to
establish a joint business venture to manufacture in Mexico and to market,
distribute, and sell glass tableware and related industrial glass products in
North America, Central America, and South America, which manufacturing
activities were formerly carried on by Vitrocrisa as a subsidiary of Vitro.
Vitrocrisa wishes to receive certain services from Affiliates of Libbey which
Libbey and Vitro wish to be made available to Vitrocrisa. To achieve these
goals, Libbey (and certain of its subsidiaries) and Vitro (and certain of its
subsidiaries) entered into that certain Master Investment Agreement dated August
15, 1997 (the "MASTER INVESTMENT AGREEMENT"). Pursuant to the Master Investment
Agreement, Vitro will acquire 51 Series A Shares, which represents fifty-one
percent and LGA 3 Corp., a subsidiary of Libbey, will acquire 49 Series B
Shares, which represents forty-nine percent of the voting capital stock of
Vitrocrisa.
R E C I T A L S
I. Arthur H. Smith states that his principal Libbey is a corporation
organized and constituted according to the laws of the State of
Delaware, with corporate headquarters in the City of Toledo, Ohio.
a) That it has commercial and industrial ties with various
companies in the United States of America, some of which are
dedicated to the production of glass articles, and
b) That its Affiliates have the experience, necessary
installations and personnel properly trained to provide the
services material to this Contract.
II. Roberto Rubio states on the other hand that his principal, "VITROCRISA"
is also a Mexican corporation duly organized and constituted according
to the laws of the land with corporate headquarters in the city of
Monterrey, Nuevo Leon.
a) That its corporate objective is the production and sale of all
types of glass articles.
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b) Likewise, that it wishes to take advantage of and use the
services that Libbey can provide.
Now, therefore, and by reason of the previous recitals and other
valuable consideration, both parties agree on the following:
C L A U S E S
FIRST: DEFINITIONS
The following terms shall have the meanings set forth beside such terms
when used in this Agreement.
1) "AFFILIATE" means with respect to each Person, any other
Person or party which at the relevant time, directly or
indirectly, controls, is controlled by, or is under common
control with, such person. The term "CONTROL" as used with
respect to any Person or party, means the possession, directly
or indirectly, of the power to direct or cause the direction
of the management and policies of such Person or party,
whether through the ownership of voting securities, by
contract, or otherwise.
2) "FOODSERVICE CHANNEL OF DISTRIBUTION" means sales to
foodservice sector of distributors, foodservice importers,
hotels, restaurants, chain restaurants, bars, casinos,
airlines, cruise lines, breweries, microbreweries, hospitals,
health care facilities, penal institutions, colleges, all
eating and drinking establishments, independent cutters and
decorators, and warehouse clubs; internet sales in all the
above segments; and all other generally acknowledged
distributor and end-user segments of the traditional
foodservice the country specified.
3) "GLASS TABLEWARE" means those products and glass product lines
illustrated in the current 1997 catalogs of Libbey Glass,
Vitrocrisa, Crisa, and WorldCrisa; all glass products of the
type sold by Libbey Glass or Vitrocrisa into the Foodservice,
Industrial, Premium, or Retail Channels of Distribution,
including products previously sold, currently sold and future
and future new products destined for application in the
Foodservice, Industrial, Premium, and Retail Channels of
Distribution.
4) "INDUSTRIAL CHANNEL OF DISTRIBUTION" means sales to candle
packers, religious candle markets, distilleries, wineries,
floral distributors, mounters and fabricators, the cosmetic
industry, and all other generally acknowledged segments of the
traditional industrial sector of the country specified.
5) "INDUSTRIAL GLASSWARE" means coffee pots, meter covers, glass
covers for cooking ware, blender jars, and lighting fixtures
sold to OEMs.
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6) "OEM" means original equipment manufacturer.
7) "PERSON" will be broadly construed to mean an individual,
corporation, partnership, association, trust, unincorporated
organization, governmental entity, or other entity or group.
8) "PREMIUM CHANNEL OF DISTRIBUTION" means sales for use as a
premium or to promote another product, including, without
limitation, sales for such purposes to customers in the fast
food industry, oil industry, soft-drink industry, supermarket
continuity industry, premium packaging, and all other
generally acknowledged segments of the traditional premium and
incentive sector of the country specified.
9) "REPRESENTATIVES" shall mean, with respect to any Person, such
Person's owners, stockholders, partners, directors, officers,
employees, agents, consultants, advisors (including, without
limitation, auditors, engineers, financial analysts, financial
managers and attorneys), and lenders;
10) "RETAIL CHANNEL OF DISTRIBUTION" means sales to retail
distributors, mass merchant discount stores, department
stores, specialty retail stores, craft stores, supermarkets,
factory outlet stores, dinnerware companies, flea markets,
door-to-door direct sales, wholesale outlets, gift shops,
potteries, catalog showrooms, warehouse clubs, home shopping
networks, internet sales for consumer use, private label sales
for any class of retailer, importers, and all other generally
acknowledged segments of the traditional retail sector of the
country specified.
11) "TECHNICAL INFORMATION" means all facts, data, documents,
know-how, drawings, specifications and the like of a technical
nature relating to the manufacture of Glass Tableware and
Industrial Glassware used commercially by Libbey or any of its
Affiliates during the term of this Agreement, but excluding
(a) information which by reason of any contract restriction or
other restriction Libbey and its Affiliates are precluded from
disclosing to Vitrocrisa, (b) information which is the subject
of a then current and valid patent of any country of the
world, or is the subject of any patent application which is
pending for a patent or, with respect to any invention within
two years after its conception and reduction to practice, is
being considered as a subject for patent protection, or (c)
information which is designated in writing as a Trade Secret
by Libbey or any of its Affiliates.
12) "TRADE SECRET" means that Technical Information which has been
designated in writing by Libbey or any of its Affiliates as
Trade Secret Information and is not publicly available from
any other source.
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SECOND: PURPOSE
Subject to the terms and conditions of this Contract, "Libbey" is
required to cause its Affiliates to provide the following services that
"Vitrocrisa" requests with respect to the general areas described below:
1) PUBLIC RELATIONS
Provide counsel and advice in those Public Relations matters
referred to Libbey by "VITROCRISA", and which are detailed
below relating to:
a) Federal, state and municipal authorities in the
United States of America and Canada.
b) Chamber of Commerce and Professional and Business
Associations in the United States and Canada.
c) National and foreign credit institutions in the
United States and Canada.
2) FINANCIAL CONSULTATION
Provide consultation and advice with respect to:
a) The determination and evaluation of fund raising
alternatives.
b) Negotiations to obtain credit with national and
foreign institutions.
c) Issuance of bonds and other securities, or other
means of financing.
d) Potential transactions with members of Libbey's bank
syndicate which lend to Libbey.
3) NEW PRODUCT DEVELOPMENT
Provide consultation and advice as to new product design, new
product strategy, execution of strategy and application of the
procedures new packaging and structured processes used by
Libbey and its Affiliates.
4) SALES ASSISTANCE
Provide part time (up to 80%) of the services of two sales
persons of Libbey or its Affiliates to assist in sales in
Mexico, Central and South America as Vitrocrisa may reasonably
request.
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5) STRATEGIC PLANNING
Provide consultation and advice with respect to strategic
planning for the purpose of providing for "VITROCRISA" the
appropriate means for its strategic planning and financial
planning, including such information as Libbey and its
Affiliates may have as to Market Analysis, Economic Analysis
and Marketing information such as focus groups, pantry checks
and the like.
6) TECHNICAL ASSISTANCE
Provide such engineering services and Technical Information as
Libbey and its Affiliates may have with respect to
manufacturing Glass Tableware and Industrial Glassware by the
blown forming process, including the entire manufacturing
process from batch composition, furnace technology, blow
molding and blow molds, after processing and cold end
equipment and which Vitrocrisa may request for the manufacture
of Glass Tableware and Industrial Glassware, provided that the
provision of engineering services and Technical Information
for projects such as the supply of molds and equipment, the
performance of repair work, furnace rebuilds, equipment
rebuilds and refurbishment, equipment design and process
improvements, development of new technology, equipment and
processes and other similar discrete tasks, whether accounted
for as an expense or a capital expenditure, are not included
in the Technical Assistance to be furnished hereunder and are
not included in the Compensation set forth in Section Fifth.
7) LEGAL
Provide consultation and advice with respect to registrations
before the United Patent and Trademark Office.
8) PURCHASING
Provide consultation and advice with respect to purchasing
opportunities for joint purchases by Vitrocrisa and Libbey's
Affiliates.
THIRD: REQUESTS FOR SERVICE
The services herein referred to will be provided by and in agreement
with written requests, made by "VITROCRISA," to be performed by Libbey itself or
by firms with which Libbey has contracted for such services to be performed.
FOURTH: OPPORTUNITY OF SERVICES
The services of consulting, advising, and supervising herein provided
for will be provided appropriately to "VITROCRISA" within a reasonable period of
time stipulated in each case by the parties.
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FIFTH: COMPENSATION
For services rendered by Libbey and its Affiliates in conformity with
this contract, "VITROCRISA" will pay to Libbey the annual sum of One Million
Dollars U. S. (US$1,000,000) plus any out of pocket expenses incurred by Libbey
and its Affiliates in providing the above services and attending meetings of the
Board of Directors of Vitrocrisa and its Affiliates held in Monterrey, Mexico.
This sum will be paid monthly (one twelfth of the annual sum) and will
be paid the 15th day of the following month which they were rendered.
Reimbursement of out of pocket expenses will be payable against the presentation
of an invoice indicating the sum to be paid and providing reasonable evidence of
the expense.
SIXTH: LICENSE AND RESTRICTED USE
1) Limitations. All the data, information, suggestions and
other material given by Libbey and its Affiliates in reference to this
Contract will be used exclusively for the benefit of "VITROCRISA" and
will be subject to the obligations of Confidence set forth in this
Agreement.
2) License. Libbey, for itself and its Affiliates, hereby
grants, and agrees to cause its Affiliates to take all necessary action
to grant, to Vitrocrisa, its successors and assigns, a
non-transferable, non-exclusive, perpetual, royalty free right and
license, without the right to sublicense, to use during the term of
this Agreement all Technical Information which LGA 3 and its Affiliates
may own or have the right to license to Vitrocrisa and which
intellectual property is disclosed to Vitrocrisa pursuant to this
Agreement provided that such right and license is limited to the fields
of Glass Tableware and Industrial Glassware and is limited to the
manufacture of Glass Tableware and Industrial Glassware in Mexico,
Central America and South America. This license does not restrict the
sale of Glass Tableware and Industrial Glassware throughout the world
although no license is granted by this Agreement in any country other
than as specified herein.
3) Disclaimer. Libbey, on behalf of itself and its Affiliates,
does not make, and expressly disclaims any warranty, express or
implied, regarding the intellectual property licensed hereunder,
including, without limitation, any warranty that (i) use of such
intellectual property will not infringe the rights of any third party
and that (ii) any Technical Information included in the intellectual
property is sufficient for its intended purpose.
4) Confidentiality.
(a) Vitrocrisa shall use best efforts to maintain in
confidence and protect the confidentiality of all Confidential
Information and shall not disclose
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any Confidential Information to any third party not affiliated
with Vitrocrisa without the prior written consent of Libbey
provided that Vitrocrisa shall be entitled to use the
Confidential Information for any and all lawful purposes
relating to its business, operations and activities that are
within the scope of the license granted pursuant to Section 2.
For purposes of this Agreement "Confidential Information"
shall mean all confidential or proprietary Technical
Information or other information of Libbey or any of its
Affiliates relating to the manufacture of Glass Tableware and
Industrial Glassware which is identified as confidential or
proprietary as required by Section (c) hereof; provided,
however, that the term shall not include (i) information known
to Vitrocrisa prior to receipt thereof from Libbey or an
Affiliate of Libbey and that is not subject to any
confidentiality obligations, (ii) information which, as of the
date hereof, is already in the public domain, (iii)
information which, after the date hereof, becomes part of the
public domain by publication or otherwise through no fault of
the Vitrocrisa, (iv) information obtained by Vitrocrisa from a
third party (not Affiliated with Vitrocrisa) in lawful
possession of such information which is not under a
confidentiality obligation to Libbey or its Affiliates from
whom such information originated or (v) information that is
independently developed without the benefit of the
Confidential Information.
(b) Notwithstanding the provisions of Section 4(a),
Vitrocrisa may disclose Confidential Information to its
Representatives provided that (i) such Representative has a
need to receive such Confidential Information to perform its
duties, (ii) Vitrocrisa advises such Representative of the
confidential nature of the disclosed Confidential Information,
and (iii) Vitrocrisa uses all reasonable efforts to cause such
Representative to protect and maintain the confidentiality of
the disclosed Confidential Information as provided herein.
(c) To be Confidential Information, all information
disclosed in tangible form shall be conspicuously marked
confidential or proprietary at the time of initial disclosure
to Vitrocrisa and information conveyed orally shall be
identified as confidential or proprietary at the time of
initial disclosure to Vitrocrisa and summarized in writing,
conspicuously marked confidential or proprietary and given to
Vitrocrisa within thirty days after the initial disclosure.
Information not so identified will not be deemed to be
Confidential Information.
(d) In the event Vitrocrisa is requested or required
(by deposition, interrogatories, requests for information or
documents in legal proceedings, subpoena, civil investigative
demand or similar process), in connection with any proceeding,
to disclose any Confidential Information, Vitrocrisa will give
Libbey written notice of such request or requirement so that
Libbey may seek an appropriate protective order or other
remedy. In the event such protective order or other remedy is
not obtained in a timely manner, Vitrocrisa will furnish only
that portion of the Confidential Information that, in the
opinion of counsel to Vitrocrisa, is legally required to be
disclosed and, upon the request of Libbey, use
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its best efforts to obtain assurances that confidential
treatment will be accorded to such information.
SEVENTH: RESPONSIBILITY
Nothing in this contract may be interpreted as:
a) Making Libbey and its Affiliates responsible to
increase "VITROCRISA"'s sales or earnings or in some
other manner guarantee "VITROCRISA"'s successful
operations and,
b) Making Libbey and its Affiliates liable for
"VITROCRISA"'s financial obligations.
c) Commencing any labor relationship between
"VITROCRISA" and Libbey's employees, including its
subsidiaries or companies owned by Libbey or its
Affiliates.
d) Delegating of any type or authority by "VITROCRISA"
or Libbey, with the understanding that Libbey and its
Affiliates will make recommendations and will offer
counsel in agreement with this Contract, but all
pertinent decisions will depend on acts by the Board
of Directors or by "VITROCRISA" functionaries.
EIGHTH: DISPUTE RESOLUTION
(a) The parties to this Agreement shall exert good faith
efforts to promptly resolve any controversy or claim arising out of or
related to this Agreement or the breach thereof within fifteen (15)
days of receipt of notice by one party from another party that such a
controversy or claim exists. If the parties fail to resolve such
controversy or claim within such fifteen (15) day period, they shall,
unless otherwise provided in this Agreement, give notice in writing to
the CEOs of Vitro and Libbey, who will meet within fifteen (15) days of
receipt of such notice at a mutually acceptable time and place to
attempt to resolve any such controversy or claim. In the event the CEOs
fail to meet or to resolve the controversy or claim within such fifteen
(15) day period, the controversy or claim (other than business and
operational decisions customarily exercised by management in entities
similar to Vitrocrisa) shall be settled by arbitration in accordance
with the then existing International Arbitration Rules of the American
Arbitration Association (hereinafter "AAA"), which shall commence upon
one party providing the other parties with a written demand for
arbitration (the "DEMAND FOR Arbitration").
(b) The arbitral tribunal shall be composed of three
arbitrators, and Libbey and Vitro shall each appoint one arbitrator. If
Libbey or Vitro fail to appoint an arbitrator within thirty (30) days
after the date the claimant's Demand for Arbitration is communicated to
the other parties (hereinafter the "NOTIFICATION DATE"), the AAA shall
make such appointment.
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The two arbitrators thus appointed shall attempt to agree upon the
appointment of a third arbitrator to serve as chairman of the arbitral
tribunal. If said two arbitrators fail to agree upon the appointment of
such third arbitrator within sixty (60) days after the Notification
Date, the AAA shall make such appointment. The place of arbitration
shall be Dallas, Texas, United States of America. The arbitral
proceeding shall be conducted in the English language.
(c) To the extent that they may validly so agree, the parties
hereby exclude any right of appeal to any court in connection with the
arbitral award. Judgment upon the arbitral award may be entered in any
court having jurisdiction thereof or having jurisdiction over any party
or any party's assets.
(d) The validity of this SECTION EIGHTH shall be governed by
the United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards or the Inter-American Convention on
International Commercial Arbitration, to which Mexico and the United
States of America have adhered.
(e) All costs of arbitration and enforcement thereof,
including reasonable attorneys' fees and court costs, costs of expert
witnesses, transportation, lodging, and meal costs of the parties and
witnesses, costs of transcript preparation, and other reasonable and
necessary direct and incidental costs shall be apportioned to one or
more of the parties by a majority of the arbitrators as they deem
appropriate. In the event any party to this Agreement commences legal
proceedings to enforce the arbitral award, the expense of such
litigation (including reasonable attorneys' fees and costs of court)
shall be borne by the party or parties not prevailing therein.
NINTH: NOTICES
All notices, demands, requests, and other communications given
hereunder shall be made in writing in English and shall be delivered in person
or by courier or overnight delivery service (delivery charge prepaid) or
telecopy (provided that the telecopy is confirmed by notice by certified mail,
courier, or overnight delivery service). Any notice, demand, request, or other
communication shall be effective only if and when it is received by the
addressee. For the purposes of the foregoing, the addresses and telecopier
numbers of the parties hereto are as follows:
If to Vitrocrisa, such notices shall be addressed to:
Vitrocrisa, S.A. de C.V.
Doblado 1627 Nte.
Col. Terminal
Monterrey, N.L. 64580
Attn: Director General Fax No. (528) 329-3009
or to any subsequent address of which Vitrocrisa may notify
LGA 3 in writing.
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If to Libbey, such notices shall be addressed to:
Libbey Inc.
300 Madison Ave.
Toledo, Ohio 43699-0060 or 43604
Attn: General Counsel Fax No.: 419-325-2111
or at any subsequent address of which LGA 3 may notify
Vitrocrisa in writing.
TENTH: DURATION
The term of this contract will commence beginning on the date of this
Agreement and unless otherwise mutually agreed by Libbey and Vitro end on the
date that either Libbey or an Affiliate of Libbey, on the one part, or Vitro or
an Affiliate of Vitro, on the other part, cease to own, directly or indirectly,
at least twenty-five percent (25%) of the total issued and outstanding voting
shares of Vitrocrisa. Notwithstanding the above, in the event Libbey and its
Affiliates cease generally to provide one or more of the services described
above to Libbey and its Affiliates, Libbey may on six months advance written
notice terminate such service to Vitrocrisa provided however that the fee for
services so terminated may be adjusted if and as appropriate for the reduction
in services.
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In witness whereof, and for stability and further legal effects, the
instant Contract is signed by the parties on the date mentioned above.
LIBBEY INC. VITROCRISA, S.A. DE C.V.
/s/ A. H. Smith, Vice President /s/ Roberto Rubio
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WITNESS WITNESS
/s/ Claudio Del Ville /s/ [ILLEGIBLE SIGNATURE]
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