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Exhibit 10.29
VITROCRISA HOLDING, S.A. DE C.V.
SHAREHOLDERS AGREEMENT
THIS AGREEMENT is made and entered effective as of August 29, 1997, by
and among LIBBEY INC., a corporation organized under the laws of the State of
Delaware ("LIBBEY"), LGA3 CORP., a corporation organized under the laws of the
State of Delaware and a wholly-owned subsidiary of Libbey ("LGA3"), VITRO, S.A.,
a sociedad anonima organized under the laws of the United Mexican States
("VITRO"), and VITROCRISA HOLDING, S.A. DE C.V., a sociedad anonima with
variable capital organized under the laws of the United Mexican States ("VC
HOLDING"). LGA3 and Vitro are sometimes singularly referred to herein as a
"SHAREHOLDER" and collectively referred to herein as the "SHAREHOLDERS."
Introduction
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Libbey and Vitro desire to establish a joint business venture to
manufacture in Mexico and to market, distribute, and sell glass tableware and
related industrial products in North America, Central America, and South
America. 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 of even date (the "MASTER INVESTMENT AGREEMENT").
Pursuant to the Master Investment Agreement, LGA3 acquired all of the Series B
Shares of VC Holding, which represents forty-nine percent (49%) of the total
issued and outstanding capital stock of VC Holding. Vitro owns all of the Series
A Shares of VC Holding, which represents fifty-one percent (51%) of the total
issued and outstanding capital stock of VC Holding.
Libbey, LGA3, Vitro, and VC Holding each desire to enter into this
Agreement for the purpose of setting forth the principles for the adoption of
decisions in Vitrocrisa, S.A. de C.V., a sociedad anonima with variable capital
organized under the laws of the United Mexican States and wholly-owned by VC
Holding, Vitro, and LGA3 ("VITROCRISA"). Therefore, in consideration of the
mutual promises contained herein, together with other consideration, the
adequacy and receipt of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
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Basic Structure of VC Holding
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1.1. FORM. VC Holding was incorporated pursuant to public deed number
5,750, dated October 16, 1970, granted before Mr. Hector Ruben Garza Moreno, a
Notary Public for Monterrey, Nuevo Leon, recorded with the Public Registry of
Commerce for the District of Monterrey, State of Nuevo Leon, under number 380,
Volume 192, Book III, Second, on November 5, 1970. A copy of the Revised VC
Holding Estatutos is attached hereto as EXHIBIT A.
1.2. NAME. The name of VC Holding shall continue to be Vitrocrisa
Holding, S.A. de C.V.
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1.3. PLACE OF BUSINESS. The corporate domicile and principal place of
business of VC Holding shall continue to be located in Monterrey, Nuevo Leon, or
such other place as the Shareholders may from time to time designate.
1.4. PURPOSE. The purposes for which VC Holding is organized include,
but are not limited to, the following: (a) to own the nonvoting capital stock of
Vitrocrisa and (b) to engage in such activities as are lawful and approved by
the unanimous vote of the Shareholders.
1.5. ENDORSEMENT OF CERTIFICATES. At the Closing (as defined in the
Master Investment Agreement), VC Holding shall issue new stock certificates and
deliver them to its Shareholders in exchange for their existing certificates,
which shall be immediately canceled. All certificates representing shares of VC
Holding stock issued after the date of this Agreement shall comply with the
terms of the Revised VC Holding Estatutos and shall contain substantially the
following legend:
"The shares represented by this certificate are subject to and are
transferable only in compliance with a Shareholders Agreement by and
among Libbey Inc., a corporation organized under the laws of the State
of Delaware, LGA3 Corp., a corporation organized under the laws of the
State of Delaware, Vitro, S.A., a sociedad anonima organized under the
laws of the United Mexican States, and Vitrocrisa Holding, S.A. de
C.V., a sociedad anonima with variable capital organized under the laws
of the United Mexican States, as the same may be amended from time to
time, dated August 29, 1997. Title to the shares represented hereby can
be transferred only in accordance with the terms of said Shareholders
Agreement. Any purported transfer of title other than in the manner
provided in the Shareholders Agreement is void, without force and
effect, and will not be recognized by the corporation."
VC Holding shall not transfer any shares or issue or reissue any certificates
except as provided in this Agreement.
ARTICLE II
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Financial Arrangements
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2.1. CAPITAL STOCK OF VC HOLDING. The capital stock of VC Holding will
be divided into Class I and Class II shares, representing the fixed and variable
portions of such capital, respectively. In addition, both Class I and Class II
shares will be divided into Series A Shares and Series B Shares, initially
representing 51% and 49% of the capital stock, respectively. Both Series A
Shares and Series B Shares will be free subscription shares. Vitro will
initially own all of the issued and outstanding Series A Shares, and LGA3 will
initially own all of the issued and outstanding Series B Shares. The Series A
Shares and Series B Shares will be deemed to constitute separate classes of
shares for purposes as are specifically provided herein or in the Revised VC
Holding Estatutos, but otherwise shall rank PARI PASSU in all respects as if
they constituted one class of shares.
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2.2. CASH REMITTANCE TO SHAREHOLDERS. Attached hereto as EXHIBIT B is a
policy of cash remittance, dividends, and other remuneration to be paid no less
than annually by VC Holding to the Shareholders (the "DIVIDEND POLICY"). Each of
the Shareholders will cause their respective members of the board of directors
of VC Holding (the "VC HOLDING BOARD") to vote for the Dividend Policy and cause
monies to be paid to the Shareholders in accordance with the Dividend Policy.
ARTICLE III
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Management of VC Holding
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3.1. THE SHAREHOLDERS MEETINGS; QUORUM. The shareholders meeting is the
supreme authority of VC Holding. The shareholders meetings may be ordinary (an
"ORDINARY SHAREHOLDERS MEETING") or extraordinary (an "EXTRAORDINARY
SHAREHOLDERS MEETING"), depending on the matters to be discussed at each
meeting. They will be held at the corporate domicile of VC Holding in accordance
with the call for the meeting made pursuant to the Revised VC Holding Estatutos.
According to the General Law of Mercantile Companies of Mexico, resolutions may
be adopted outside of a shareholders meeting by unanimous vote of the
Shareholders, provided that the Shareholders subsequently confirm the adoption
of such resolutions in writing to the Chairman or the Secretary of the VC
Holding Board. An Ordinary Shareholders Meeting will be held at least once a
year within the four (4) months following the closing of each fiscal period.
Ordinary Shareholders Meetings may be those called to discuss any of the matters
that are not expressly reserved by law or this Agreement to the Extraordinary
Shareholders Meeting. The matters reserved for Extraordinary Shareholders
Meetings are:
(a) any matter that is required to be resolved by the
Extraordinary Shareholders Meeting according to Article 182 of
the General Law of Mercantile Companies;
(b) the declaration or payment of dividends pursuant to the
Dividend Policy; and
(c) any matter specified in SECTION 3.2(d) that is referred to the
Shareholders by the VC Holding Board.
An Ordinary Shareholders Meeting shall take place by virtue of a first
call of any Shareholder if the holders of fifty-five percent (55%) of the
capital stock are present or duly represented thereat. If such a quorum does not
exist for the holding of the meeting by virtue of the first call, the call shall
be repeated, and the meeting shall be considered validly held whatever number of
Shareholders are present or represented. Resolutions in Ordinary Shareholders
Meetings shall be adopted by the affirmative vote of the majority of the shares
entitled to vote that are present or represented thereat.
An Extraordinary Shareholders Meeting shall be held by virtue of the
first call if the Shareholders holding at least seventy-five percent (75%) of
the capital stock are present or represented thereat. If such a quorum does not
exist for such meeting, the call shall be repeated, and the meeting shall be
considered validly held only with the attendance of Shareholders or their
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proxies representing at least fifty-five percent (55%) of the capital stock of
VC Holding. Resolutions in Extraordinary Shareholders Meetings held either in
first or subsequent calls shall be adopted by the affirmative vote of
Shareholders or their representatives holding at least fifty-five percent (55%)
of the capital stock of VC Holding.
If holders of seventy-five percent (75%) of the capital stock are not
present or represented at the first call of any Extraordinary Shareholders
Meeting and if holders of fifty-five percent (55%) of the capital stock are not
present or represented at any repeated call of such meeting, either Shareholder
shall have the right, but shall not be obligated, to declare the occurrence of a
Deadlock Event under SECTION 6.1.
In addition to any other requirement imposed by Mexican law, calls for
an Ordinary Shareholders Meeting of VC Holding and calls for an Extraordinary
Shareholders Meeting of VC Holding must be in writing and must be delivered to
each Shareholder at least fifteen (15) days prior to such meeting, unless such
notice is waived by the Shareholders in writing.
3.2. Board of Directors.
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(a) COMPOSITION AND APPOINTMENT. The VC Holding Board shall consist of
seven (7) members (hereinafter referred to singularly as a "MEMBER" and
collectively as "MEMBERS"). The Members shall not be required to be Mexican
nationals. As the owner of Series A Shares of VC Holding, Vitro shall be
entitled, in its sole and absolute discretion, to designate four (4) Members
(and their alternates) to the VC Holding Board (hereinafter referred to
singularly as a "VITRO MEMBER" and collectively as "VITRO MEMBERS"), provided
that each such designee is also a member or alternate, as the case may be, of
the Board of Directors of Vitrocrisa. As the owner of Series B Shares of VC
Holding, LGA3 shall be entitled, in its sole and absolute discretion, to
designate three (3) Members (and their alternates) to the VC Holding Board
(hereinafter referred to singularly as a "LIBBEY MEMBER" and collectively as
"LIBBEY MEMBERS"), provided that each such designee is also a member or
alternate, as the case may be, of the Board of Directors of Vitrocrisa. The
names of the Members of the VC Holding Board as at the date of this Agreement
and their alternates are set out in EXHIBIT C attached hereto.
(b) REMOVAL. Each Shareholder, in its sole and absolute discretion, may
remove and, in conjunction therewith, shall replace any or all of the Members
and alternates it has designated. Notwithstanding the foregoing, each
Shareholder hereby agrees to consult with the other Shareholder in connection
with the designation, removal, and replacement of any Member and alternate of
the VC Holding Board and to consider reasonable objections of any Shareholder to
the designation, removal, and replacement of any Member and alternate of the VC
Holding Board; provided, however, such consultation shall not affect the sole
and absolute discretion of each Shareholder to designate, remove, or replace the
Members and alternates it has designated. Any alternate may substitute for any
Member designated by such Shareholder at any meeting of the VC Holding Board. No
Member or alternate of the VC Holding Board shall be removed or replaced other
than by the Shareholder that designated such Member or alternate.
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(c) POWER AND AUTHORITY OF THE VC HOLDING BOARD. Except for those
matters set forth in SECTION 3.1 requiring approval of the Shareholders at an
Extraordinary Shareholders Meeting, the Shareholders shall, and do hereby,
delegate all power and authority for the operations of VC Holding to the VC
Holding Board, which, by way of illustration and not limitation, shall include
the power and authority to:
(i) direct, manage, control, and operate VC Holding;
(ii) set strategic direction for VC Holding;
(iii) direct all of VC Holding's business and management
policies and specific business and operational
decisions in the ordinary course of business;
(iv) acquire and dispose of assets of VC Holding;
(v) control litigation and administrative proceedings of
VC Holding;
(vi) enter into contracts on behalf of VC Holding; and
(vii) assume all other responsibilities not specifically
reserved to the Shareholders by this Agreement or by
law, including powers under Article 2554 of the Civil
Code for the Federal District and Articles 9 and 85
of the General Law of Negotiable Instruments and
Credit Operations.
(d) EXTRAORDINARY DIRECTORS ACTIONS. Notwithstanding anything contained
herein to the contrary, the following matters, except for those matters already
included in the Initial Strategic Plan (as defined in ARTICLE VII), shall not be
deemed approved by the VC Holding Board unless (i) approved by a majority of the
Members of the VC Holding Board, and (ii) such approving majority shall have
consisted of at least one Libbey Member and at least one Vitro Member
(hereinafter singularly referred to as an "EXTRAORDINARY DIRECTORS ACTION" and
collectively referred to as "EXTRAORDINARY DIRECTORS ACTIONS"). Such
Extraordinary Directors Actions are as follows:
(i) Approval of any cash remittance, dividend, or other
remuneration from VC Holding to any Shareholder in
accordance with SECTION 2.2;
(ii) Approval of any proposal to change the corporate
purpose of VC Holding;
(iii) Approval of any resolution regarding the manner in
which the shares owned by VC Holding in any other
corporation, or equity participation in a limited
liability company, or any other interest in any other
entity, whether or not incorporated, are to be voted
or regarding the transfer of such shares, equity
participation, or interest;
(iv) Approval of transactions that would dilute any
Shareholder's interest in VC Holding;
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(v) The approval by the VC Holding Board of annual
operating budgets pursuant to ARTICLE VII;
(vi) The approval of any expenditures in excess of 120% of
the allotment for such expenditures as set forth in
any annual operating budget for VC Holding as
determined in accordance with ARTICLE VII;
(vii) Formation of a partnership or joint venture between
VC Holding and another business entity; and
(viii) Submittal to the Ordinary Shareholders Meeting of the
financial statements and report for approval.
(e) MEETINGS. The VC Holding Board shall meet at least twice annually,
the first meeting being within thirty (30) days after year-end audited financial
statements have been delivered to all Members of the VC Holding Board, but in no
event more than four (4) months after the end of each fiscal year, or more
frequently at the request of any Shareholder or any Member. Notice of each
meeting of the VC Holding Board must be delivered to all Members at least
fifteen (15) days in advance of the date of such meeting. At least four (4)
Members of the VC Holding Board or their alternates must be present to transact
business. Each meeting of the VC Holding Board shall take place at 10:00 a.m. on
the fifteenth (15th) day after notice has been delivered to all Members, or at a
time and place mutually agreed upon by the Members. If Members sufficient to
transact business are not present at the meeting, the date of the meeting shall
be postponed for one (1) day, and if Members sufficient to transact business are
not present at that meeting, the date of the meeting shall be postponed for an
additional day. If Members sufficient to transact business are not present at
that meeting, either Shareholder shall have the right, but shall not be
obligated, to declare the occurrence of a Deadlock Event under SECTION 6.1
hereof.
(f) WAIVER OF NOTICE; VOTING. The Members can waive the requirement of
the written call, and same will not be required, when all of the Members or
their alternates are present at the meeting. Except as otherwise provided
herein, all decisions of the VC Holding Board shall require the approval of a
majority of its Members. All decisions of the Members on any matters requiring
their approval, consent, or action may be made by the Members in each of their
sole and absolute discretion.
(g) ACTION WITHOUT MEETING. Whenever the VC Holding Board is required
or permitted to take any action pursuant to a meeting of the VC Holding Board,
such action may be taken without a meeting upon a written consent, setting forth
the action so taken that is signed by each of the Members.
3.3. INDEMNIFICATION OF THE VC HOLDING BOARD. Each Member shall be
indemnified by VC Holding against all liability for any claim, demand, loss,
damage, liability, or expense (including, without limitation, amounts paid in
settlement, reasonable costs of investigation, and reasonable legal expenses)
resulting from any threatened, pending, or completed action, suit, or
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proceeding naming any of them as defendant by reason of acts or omissions made
or omitted in good faith within the scope of their authority as set forth in
this Agreement to the maximum extent permitted by law.
3.4. MANAGEMENT AND ADMINISTRATIVE SERVICES BY VITRO AND LIBBEY.
Neither Shareholder shall be entitled to a fee for any management or
administrative services provided to VC Holding by such Shareholder unless
mutually agreed by both Shareholders.
3.5. CORPORATE OPPORTUNITY. No person or entity of the Libbey 100%
Group (as defined in ARTICLE IV) and no person or entity of the Vitro 100% Group
(as defined in ARTICLE IV) has any duty to communicate or offer any Corporate
Opportunity (as defined below) to VC Holding, and neither the Libbey 100% Group
nor the Vitro 100% Group shall be liable to VC Holding or any Shareholder for
breach of any fiduciary duty or duty of loyalty to VC Holding by reason of the
fact that it pursues or acquires a Corporate Opportunity for itself or directs a
Corporate Opportunity to another person or entity. For purposes of this section,
"CORPORATE OPPORTUNITY" means a business or other opportunity that VC Holding is
or could reasonably be expected to become financially able to undertake, which
relates to VC Holding's line of business and in which VC Holding has or would
have an interest or a reasonable expectancy of interest. To the extent this
SECTION 3.5 contradicts any term or provision in the Distribution Agreement,
dated of even date, by and among Vitro, Vitrocrisa, Libbey, and Libbey Glass
Inc., the Distribution Agreement, dated of even date, by and among Vitro, Crisa
Corporation, Vitrocrisa, Libbey, and Libbey Glass Inc. (together, the
"DISTRIBUTION AGREEMENTS"), or the Covenant Not to Compete, dated of even date,
by and between Libbey and Vitro (the "COVENANT NOT TO COMPETE"), the terms and
provisions of the Distribution Agreements or the Covenant Not to Compete shall
control.
ARTICLE IV
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Transfers, Withdrawals, and Admission of Additional Shareholders
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4.1. Transfers and Encumbrance of Interests.
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(a) TRANSFERS. No Shareholder shall cause VC Holding to transfer all or
any portion of its interest in Vitrocrisa, or agree to do so, without the
written consent of each of Libbey and Vitro. No Shareholder shall transfer all
or any portion of its interest in VC Holding or its rights under this Agreement,
or agree to do so, for a period of four (4) years from the date of this
Agreement. After such four-year period, either Shareholder may transfer all, but
not less than all, of its interest in VC Holding pursuant to the terms of
SECTION 4.2. A Shareholder may transfer or otherwise sell its shares pursuant to
this ARTICLE IV for any reason.
(b) ENCUMBRANCE. Except as otherwise provided in this Agreement, no
Shareholder may encumber, mortgage, pledge, hypothecate, or place a lien or make
any disposition similar thereto (collectively an "ENCUMBRANCE") upon all or any
portion of its interest in VC Holding or its rights under this Agreement, or
agree to do so, without the prior written consent of the other Shareholder,
which consent shall not be unreasonably withheld but may be subject to such
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reasonable conditions as the other Shareholder may require. Except as otherwise
provided in this Agreement, no Shareholder shall cause VC Holding to place an
Encumbrance upon all or any portion of its interest in Vitrocrisa or its rights
under this Agreement, or agree to do so, without the prior written consent of
Libbey and Vitro, which consent shall not be unreasonably withheld but may be
subject to such reasonable condition as the other Shareholder may require.
(c) VIOLATION. Any purported transfer or Encumbrance in violation of
the terms of this Agreement shall be null and void and shall not be recognized
by VC Holding.
4.2. Shareholders First Option to Purchase Joint Venture Interest.
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(a) DEFINITIONS. In this SECTION 4.2, the following words shall bear
the following meanings:
"JOINT VENTURE INTEREST" in the case of LGA3, (a) shares of VC
Holding capital stock held, directly
or indirectly, by LGA3, (b) shares of
Vitrocrisa capital stock held,
directly or indirectly, by LGA3, (c)
shares of Crisa Libbey, S.A. de C.V.,
a sociedad anonima with variable
capital organized under the laws of
the United Mexican States ("NEWCO
FINANCE"), capital stock held,
directly or indirectly, by LGA3, and
(d) membership interests in Crisa
Industrial, L.L.C., a Delaware
limited liability company (the
"LLC"), owned, directly or
indirectly, by LGA4 Corp., a Delaware
corporation and wholly-owned
subsidiary of Libbey; and in the case
of Vitro, (a) shares of VC Holding
capital stock held, directly or
indirectly, by Vitro, (b) shares of
Vitrocrisa capital stock held,
directly or indirectly, by Vitro, (c)
shares of Newco Finance capital stock
held, directly or indirectly, by
Vitro, and (d) membership interests
in the LLC owned, directly or
indirectly, by Vitro;
"PRESCRIBED PRICE" the price for the Joint Venture
Interest specified in the Transfer
Notice;
"PROPOSING TRANSFEROR" a Shareholder proposing to transfer
or dispose of all of its Joint
Venture Interest;
"PURCHASER" a Shareholder willing to purchase all
of the Joint Venture Interest
comprised in, or offered for purchase
pursuant to the serving of, a
Transfer Notice;
"TRANSFER NOTICE" a written notice served by a
Shareholder;
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"100% GROUP" in the case of Vitro, Vitro or any
other person or entity that directly
or indirectly controls, is controlled
by, or is under common control with
Vitro, excluding Vitrocrisa (the
"VITRO 100% GROUP"), and in the case
of LGA3, Libbey or any other person
or entity that directly or indirectly
controls, is controlled by, or is
under common control with Libbey (the
"LIBBEY 100% GROUP").
(b) LIMITATION ON TRANSFERS. The right to transfer or dispose of shares
of VC Holding or any interest therein shall (save in respect of transfers made
pursuant to SECTION 4.2(i)) be subject to the restrictions set forth in this
SECTION 4.2. A Shareholder may not transfer or dispose of its shares in VC
Holding unless it transfers or disposes of all of its Joint Venture Interest.
Except as provided otherwise herein, no Shareholder may transfer or dispose of
its Joint Venture Interest (save in respect of transfers made pursuant to
SECTION 4.2(i) hereof) without the prior written consent of the other
Shareholder.
(c) FIRST OPTION. Before transferring or disposing of all of its Joint
Venture Interest (or any interest therein), the Proposing Transferor shall serve
a Transfer Notice on the other Shareholder stipulating the Prescribed Price.
Upon receipt of a Transfer Notice, the other Shareholder shall have the right
and first option for a period of thirty (30) days to purchase all of the Joint
Venture Interest at the Prescribed Price.
(d) TRANSFER ON EXERCISE OF OPTION. If the Proposing Transferor is
given notice under SECTION 4.2(c) that the other Shareholder has exercised its
option to purchase all, but not less than all, of the Joint Venture Interest,
the Proposing Transferor shall be bound, on payment of the Prescribed Price, to
transfer the Joint Venture Interest to the other Shareholder or its designees.
The sale and purchase shall be completed at the office of VC Holding, or at such
other place as the Proposing Transferor and the other Shareholder shall agree,
during normal business hours on the first business day after the expiration of
ninety (90) days after the expiration of the option period set forth in SECTION
4.2(c).
(e) TRANSFER ON EXPIRATION OR TERMINATION OF OPTION. If the option
granted by SECTION 4.2(c) is not exercised as to all of the Joint Venture
Interest, then such option shall become void AB INITIO and the Proposing
Transferor may sell all of the Joint Venture Interest to any third party free of
the restrictions set forth in this ARTICLE IV, subject to the following
restrictions: (i) the Joint Venture Interest may not be sold after the
expiration of one hundred eighty (180) days after the expiration of the option
period set forth in SECTION 4.2(c), (ii) the Joint Venture Interest must be sold
in a bona fide sale at a price not being less that the Prescribed Price, and
(iii) the third party transferee of the Joint Venture Interest must execute and
deliver an undertaking under which such third party shall become a party hereto,
to the Vitrocrisa, S.A. de C.V. Shareholders Agreement dated of even date (the
"VITROCRISA SHAREHOLDERS AGREEMENT"), to the Crisa Libbey, S.A. de C.V.
Shareholders Agreement dated of even date (the "NEWCO FINANCE SHAREHOLDERS
AGREEMENT"), and to the Limited Liability Company Agreement of Crisa Industrial,
L.L.C. dated of even date (the
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"LLC AGREEMENT," and collectively with this Agreement, the Vitrocrisa
Shareholders Agreement, and the Newco Finance Shareholders Agreement, the "JOINT
VENTURE SHAREHOLDERS AGREEMENTS") in place of the Proposing Transferor.
(f) EXERCISE. An option granted by SECTION 4.2(c) may be exercised only
by the holder thereof and only by the delivery of a written notice of exercise
to the Proposing Transferor prior to the expiration of the relevant option
period.
(g) WAIVER. The restrictions imposed by this ARTICLE IV may be waived
in relation to any proposed transfer of a Shareholder's Joint Venture Interest
with the consent of all Shareholders who would otherwise have been entitled to
have such Joint Venture Interest offered to them in accordance herewith.
(h) FAILURE TO TIMELY EXERCISE. Failure of a Shareholder to exercise an
option granted by SECTION 4.2(c) prior to the expiration of the option period
shall be deemed to be a waiver of that option as of the date the option period
expired. The waiver of an option granted by SECTION 4.2(c) will not constitute a
waiver of any subsequent option granted by SECTION 4.2(c).
(i) INTRA-GROUP TRANSFERS. Notwithstanding the foregoing, all, but not
less than all, of a Shareholder's Joint Venture Interest may be transferred to
any member of the Vitro 100% Group (in the case of Vitro) and to any member of
the Libbey 100% Group (in the case of LGA3), but only (i) if the transferee is
already a party to each of the Joint Venture Shareholders Agreements or shall
have first agreed to adhere to and be bound by the provisions of each of the
Joint Venture Shareholders Agreements by executing and delivering in favor of
the other parties to each of the Joint Venture Shareholders Agreements an
undertaking to the intent and with the effect that from the date of such
undertaking, or, if later, the date of the transfer, the transferee shall become
a party to each of the Joint Venture Shareholders Agreements, in place of the
transferor, to the extent that the transferor ceases to hold shares in VC
Holding, Vitrocrisa, Newco Finance, and the LLC as a result of such transfer;
and (ii) on terms that the transferee shall re-transfer the relative Joint
Venture Interest to a member of the Vitro 100% Group (in the case of Vitro) or
to a member of the Libbey 100% Group (in the case of LGA3) on the same terms as
set forth in SECTION 4.2(i), prior to such transferee ceasing to be a member of
the Vitro 100% Group or the Libbey 100% Group (as the case may be).
(j) OPTION TO PARTICIPATE IN SALE. In lieu of exercising the option
granted in SECTION 4.2(c), a Shareholder may elect to participate in any sale by
the Proposing Transferor contemplated by SECTION 4.2 at the Prescribed Price.
Upon such election, the Shareholder will be entitled to sell all of its Joint
Venture Interest. The election to participate in a sale must be in writing and
must be delivered to the Proposing Transferor within thirty (30) days of receipt
of the Transfer Notice. Failure to timely deliver a written election to
participate in a sale within thirty (30) days of the Transfer Notice will
constitute a waiver of such Shareholder's right to participate in the sale.
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ARTICLE V
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Termination
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5.1. CAUSES OF TERMINATION. Except as otherwise provided in this
Agreement, this Agreement shall terminate:
(a) upon the unanimous written consent of the parties hereto;
(b) if VC Holding is declared bankrupt, has a receiver appointed
over all or substantially all of its assets, or is dissolved;
(c) by decree of a court of competent jurisdiction; or
(d) upon the merger of VC Holding into Vitrocrisa; provided,
however, that the parties expressly agree that, upon the
occurrence of such merger, the parties shall enter into a new
agreement having terms substantially similar to, and with the
same intent of, the terms of the Vitrocrisa Shareholders
Agreement.
5.2. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an event of default ("EVENT OF DEFAULT") hereunder on the part
of the Shareholder with respect to whom such event occurs (the "DEFAULTING
PARTY") without any requirement of notice or passage of time except as
specifically set forth in any such subparagraph:
(a) the violation by a Shareholder or Libbey of any of the
restrictions set forth in ARTICLE IV;
(b) failure of a Shareholder's Member of the VC Holding Board to
vote for and use reasonable efforts to implement the Dividend
Policy as set forth in SECTION 2.2;
(c) the institution by a Shareholder or Libbey of a case or other
proceeding in bankruptcy;
(d) the institution against a Shareholder or Libbey of a case or
other proceeding in bankruptcy, which proceeding is not
dismissed, stayed, or discharged within a period of sixty (60)
days after the filing thereof;
(e) a proposed plan of arrangement or other action by a
Shareholder's or Libbey's creditors taken as a result of a
general meeting of the creditors of a Shareholder or Libbey,
respectively, which arrangement or other action is not
dismissed, stayed, or discharged within a period of sixty (60)
days after such general meeting;
(f) the appointment of a receiver, custodian, trustee, or like
officer, to take possession of the assets of a Shareholder or
Libbey if the pendency of said receivership would reasonably
tend to have a materially adverse effect upon the performance
by the
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Shareholder or Libbey, respectively, of its obligations under
this Agreement, which receivership remains undischarged for a
period of sixty (60) days from the date of its imposition;
(g) attachment, execution, or other judicial seizure of all or any
substantial part of a Shareholder's or Libbey's assets or of a
Shareholder's or Libbey's shares of VC Holding, or any part
thereof, such attachment, execution, or seizure remaining
undismissed or undischarged for a period of sixty (60) days
after the levy thereof, if the occurrence of such attachment,
execution, or other judicial seizure would reasonably tend to
have a materially adverse effect upon the performance by the
Shareholder or Libbey, respectively, of its obligations under
this Agreement; provided, however, that said attachment,
execution, or seizure shall not constitute an Event of Default
hereunder if the Shareholder or Libbey, respectively, posts a
bond sufficient to fully satisfy the amount of such claim or
judgment within sixty (60) days after the levy thereof and the
respective Shareholder's or Libbey's assets are thereby
released from the lien of such attachment;
(h) material default in performance of or a failure to comply with
any obligations or undertakings of a Shareholder or Libbey
under the Covenant Not to Compete dated of even date by and
between Vitro and Libbey, and such default continues for a
period of thirty (30) days following notice of such default by
another Shareholder;
(i) the occurrence of an Event of Default (as defined therein)
under ARTICLE V of the Vitrocrisa Shareholders Agreement; and
(j) the occurrence of a Libbey Change of Control or a Vitro Change
of Control (both as defined in SECTION 5.6 below).
5.3. REMEDY ON DEFAULT. If an Event of Default is declared pursuant to
(a) SECTION 5.2(b) with respect to dividends to be paid for the performance of
VC Holding during fiscal years 1998, 1999, and 2000 or (b) SECTION 5.2(j) with
respect to a Libbey Change of Control or a Vitro Change of Control occurring on
or before the third anniversary of this Agreement, then such Shareholder may, in
addition to any other remedy at law or in equity, invoke the provisions of
SECTION 5.5. If an Event of Default is declared at any time (a) by a Shareholder
pursuant to any other subsection of SECTION 5.2, (b) by any party to this
Agreement pursuant to SECTION 5.2(b) with respect to dividends to be paid for
the performance of VC Holding after fiscal year 2000, or (c) by a Shareholder
pursuant to SECTION 5.2(j) with respect to a Libbey Change of Control or a Vitro
Change of Control occurring after the third anniversary of this Agreement, then
such Shareholder may, in addition to any other remedy at law or in equity,
invoke the provisions of SECTION 5.4.
5.4. BUY/SELL PROVISION. Within forty-five (45) days of an Event of
Default the non-defaulting party (the "OFFERING SHAREHOLDER") may deliver a
written offer (the "OFFER") to purchase all, but not less than all, of the other
Shareholder's Joint Venture Interest at a cash purchase price (the "OFFER
PRICE"), fully payable on or before sixty (60) days after notice of the Offer.
Within thirty (30) days after receipt of the Offer, the other Shareholder may
notify the Offering
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Shareholder in writing that it will either (i) sell to the Offering Shareholder
all, but not less than all, of its Joint Venture Interest at the Offer Price on
or before the sixtieth day after receipt of the Offer or (ii) buy from the
Offering Shareholder all, but not less than all, of the Offering Shareholder's
Joint Venture Interest at (A) if Vitro is the Offering Shareholder, 51/49 of the
Offer Price or (B) if LGA3 is the Offering Shareholder, 49/51 of the Offer Price
(the "ADJUSTED OFFER PRICE"), on or before the sixtieth day after receipt of the
Offer. If the other Shareholder fails to notify the Offering Shareholder within
the thirty (30) day period that it will (i) sell all of its Joint Venture
Interest to the Offering Shareholder at the Offer Price or (ii) buy all of the
Joint Venture Interest from the Offering Shareholder at the Adjusted Offer
Price, then the Offering Shareholder must purchase in cash all, but not less
than all, of the other Shareholder's Joint Venture Interest at the Offer Price
and the other Shareholder must sell all, but not less than all, of its Joint
Venture Interest at the Offer Price, on or before the sixtieth day after notice
of the Offer. Upon the purchase or sale of shares pursuant to this SECTION 5.4,
this Agreement shall automatically terminate without further action by either
Shareholder. Failure by the non-defaulting party to deliver an Offer within
forty-five (45) days of notice of an Event of Default shall constitute a waiver
of such party's rights under this SECTION 5.4 with respect to the particular
Event of Default.
5.5. Dispute Resolution; Put/Call Option.
------------------------------------
(a) DISPUTE RESOLUTION. If an Event of Default is declared by a
Shareholder pursuant to (i) SECTION 5.2(b) with respect to dividends to be paid
for the performance of VC Holding during fiscal years 1998, 1999 and 2000 or
(ii) SECTION 5.2(j) with respect to a Libbey Change of Control or a Vitro Change
of Control occurring on or before the third anniversary of this Agreement, such
Shareholder shall promptly (but in no event later than thirty (30) days after
such Shareholder's knowledge of such Event of Default) send notice of such Event
of Default to the other Shareholder (the "DEFAULT NOTICE"). Upon receipt of the
Default Notice, the alleged defaulting party will have thirty (30) days to cure
such default. If the default is not cured within such thirty (30) day period or
if the party receiving the Default Notice contests that a default has occurred,
the chief executive officers of Libbey and Vitro (collectively, the "CEOS")
shall meet within ninety (90) days of the expiration of the cure period in a
good faith effort to resolve the Event of Default. If the Event of Default is
not resolved within such ninety (90) day period, the CEOs may select an
independent mediator and subject the dispute to non-binding mediation, which
must take place within thirty (30) days of the expiration of such ninety (90)
day period. If both CEOs do not consent to non-binding mediation or if the
mediation fails to resolve the Event of Default, the Event of Default shall be
submitted to binding arbitration to be conducted in accordance with the
provisions of SECTION 8.10(b), (c), (d), and (e), the sole purpose of which is
to decide whether a default exists and, if so, which Shareholder is in default.
The arbitrators will consider all issues currently in dispute between the
Shareholders and must certify their ruling in writing to each Shareholder (the
date of such certification is referred to herein as the "CERTIFICATION DATE").
If the arbitrators determine and certify that one Shareholder is in default,
then such Shareholder shall have thirty (30) days from the Certification Date to
cure the default. If the Event of Default is not cured within such thirty (30)
day period, the non-defaulting party may invoke the provisions of SECTION
5.5(b). If the arbitrators cannot resolve which party has caused the Event of
Default or determine that both Shareholders have caused the Event of Default and
so certify, then either of the Shareholders may invoke the provisions of SECTION
5.4 within thirty (30) days of the Certification Date.
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(B) Put/Call Option with Penalty.
-----------------------------
(i) PUT/CALL OPTION WITH PENALTY. If the arbitrators determine
that Vitro or any member of the Vitro 100% Group is in default and such
default shall not be cured within thirty (30) days of the Certification
Date, then Libbey shall have the right to sell to Vitro, and Vitro
shall be obligated to purchase from Libbey, all, but not less than all,
of Libbey's Joint Venture Interest at forty-nine percent (49%) of the
Joint Venture Value (as defined below) multiplied by one hundred twenty
percent (120%) (the "PUT OPTION"). If the arbitrators determine that
Libbey or any member of the Libbey 100% Group is in default, then Vitro
shall have the right to buy from Libbey, and Libbey shall be obligated
to sell to Vitro, all, but not less than all, of Libbey's Joint Venture
Interest at forty-nine percent (49%) of the Joint Venture Value (as
defined below) multiplied by eighty percent (80%) (the "CALL OPTION").
The Put Option and the Call Option are collectively referred to herein
as the "OPTION."
(ii) VALUATION OF THE JOINT VENTURE. If the party in default
does not cure the Event of Default within thirty (30) days of the
Certification Date, the non-defaulting party may request a valuation of
the joint venture as a going concern, which will include a valuation of
the combined businesses of Vitrocrisa, VC Holding, Newco Finance, and
the LLC (collectively, the "JOINT VENTURE"), within thirty (30) days of
the expiration of the cure period. Within thirty (30) days of the date
of such request, the CEOs will meet, and each CEO will select one
investment banker, and the two selected investment bankers will then
select a third investment banker, for the purpose of establishing a
value for the Joint Venture as a going concern. Upon selection, each of
the three investment bankers will independently determine the value for
the Joint Venture as a going concern, the average of which will be
deemed to be the joint venture value (the "JOINT VENTURE VALUE").
(iii) EXERCISING OPTION. The non-defaulting party may exercise
the Option by giving the defaulting party written notice of its intent
to exercise the Option within thirty (30) days of the date that the
Joint Venture Value is determined by the investment bankers.
(iv) CLOSING OF OPTION. The closing of the Option will take
place at a time and place mutually agreed upon by Libbey and Vitro;
provided, however, that in no event will the closing take place more
than sixty (60) days from the date of the notice of exercise set forth
in SECTION 5.5(b)(iii).
(v) INVESTMENT BANKER FEES. Fees and expenses incurred in
connection with the determination of the Joint Venture Value,
including, without limitation, investment banker fees, will be paid by
the party in default as certified by the arbitrators; provided,
however, that all such fees and expenses will be paid by the
non-defaulting party if the non-defaulting party fails to exercise the
Option.
5.6. DEFINITION OF CHANGE OF CONTROL. In this ARTICLE V, the following
words shall bear the following meanings:
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(a) "LIBBEY CHANGE OF CONTROL" shall be deemed to have occurred when
(i) any person or entity, together with any group of controlled companies not in
the Libbey 100% Group, acquires beneficial ownership, directly or indirectly, of
shares of stock of Libbey entitling such person or entity to exercise more than
50% of the total voting power of all classes of stock of Libbey entitled to vote
in elections of directors, or (ii) Libbey sells, leases or otherwise transfers
all or substantially all of its assets to any person or entity not in the Libbey
100% Group.
(b) "VITRO CHANGE OF CONTROL" shall be deemed to have occurred when (i)
any person or entity, together with any group of controlled companies not in the
Vitro 100% Group, acquires beneficial ownership, directly or indirectly, of
shares of stock of Vitro entitling such person or entity to exercise more than
50% of the total voting power of all classes of stock of Vitro entitled to vote
in elections of directors, or (ii) Vitro sells, leases or otherwise transfers
all or substantially all of its assets to any person or entity not in the Vitro
100% Group.
ARTICLE VI
----------
Deadlock and Impasse
--------------------
6.1. DEADLOCK. A "DEADLOCK EVENT" shall be deemed to occur at such time
as a Shareholder (the "NOTIFYING SHAREHOLDER") delivers to the other Shareholder
a notification in writing (the "DEADLOCK NOTICE") stating that, in the opinion
of the Notifying Shareholder, (a) the other Shareholder's chief executive
officer ("CEO") failed to meet with the Notifying Shareholder's CEO to resolve a
controversy or claim regarding a business and operational decision customarily
exercised by the management of VC Holding within the time limits set forth in
SECTION 8.10(a), (b) the other Shareholder has, or the other Shareholder's
Members of the VC Holding Board have, deliberately prevented the occurrence of a
quorum as set forth in SECTION 3.1 or SECTION 3.2(e), respectively, or (c) the
Shareholders or the VC Holding Board are unable to reach agreement on any of the
actions set forth in SECTION 3.1(a), (b), or (c) or SECTION 3.2(d),
respectively, and setting out the reasons therefor, and there is no resolution
or agreement that has been approved by both Shareholders (which approval may be
given or withheld, or made subject to such conditions, as are determined by the
Shareholders in their respective sole and absolute discretion) within seven (7)
days after delivery of the Deadlock Notice. A Deadlock Event shall be resolved
in accordance with the provisions of this ARTICLE VI.
6.2. RESOLUTION OF DEADLOCK. In the event of a Deadlock Event, either
Shareholder may deliver notice of a meeting of the Shareholders (an "EMERGENCY
NOTICE") to the other Shareholder, and they shall immediately meet at a time and
place mutually agreed upon or, if no time and place is agreeable, at VC
Holding's principal place of business at 10:00 a.m. on the fifteenth (15th) day
after the date of such Emergency Notice. Notwithstanding anything in this
Agreement to the contrary, if either Shareholder does not attend such meeting,
either Shareholder may immediately invoke the provisions of SECTION 6.4.
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6.3. DECLARATION OF IMPASSE. If, at the meeting contemplated in SECTION
6.2, the Shareholders are unable to agree on a course of action to address the
reason for the meeting, any Shareholder may declare an impasse ("IMPASSE") by
giving written notice to the other Shareholder (an "IMPASSE NOTICE"). Within
twenty (20) days after receipt of such Impasse Notice, the CEO of each
Shareholder shall meet in a good faith effort to reach accords that will end the
Impasse. If a decision is not made by common accord that ends the Impasse within
thirty (30) days after the date that the CEOs meet, either Shareholder may
declare a final Impasse ("FINAL IMPASSE") by written notice to the other
Shareholder. Notwithstanding anything in this Agreement to the contrary, if
either CEO refuses to meet with the other CEO, either Shareholder may
immediately invoke the provisions of SECTION 6.4.
6.4. FINAL IMPASSE. Within forty-five (45) days of notice of Final
Impasse (or pursuant to the provisions of SECTIONS 6.2 or 6.3), either
Shareholder (the "OFFERING SHAREHOLDER") may deliver a written Offer to purchase
all, but not less than all, of the Joint Venture Interest held by the other
Shareholder at a cash Offer Price, fully payable on or before sixty (60) days
after notice of the Offer. Within thirty (30) days after receipt of the Offer,
the other Shareholder may notify the Offering Shareholder in writing that it
will either (a) sell to the Offering Shareholder all, but not less than all, of
its Joint Venture Interest at the Offer Price on or before the sixtieth day
after receipt of the Offer or (b) buy from the Offering Shareholder all, but not
less than all, of the Offering Shareholder's Joint Venture Interest at the
Adjusted Offer Price on or before the sixtieth day after receipt of the Offer.
If the other Shareholder fails to notify the Offering Shareholder within the
thirty (30) day period that it will (a) sell all of its Joint Venture Interest
to the Offering Shareholder at the Offer Price per share or (b) buy all of the
Joint Venture Interest from the Offering Shareholder at the Adjusted Offer
Price, then the Offering Shareholder must purchase in cash all, but not less
than all, of the other Shareholder's Joint Venture Interest at the Offer Price
and the other Shareholder must sell all, but not less than all, of its Joint
Venture Interest at the Offer Price, on or before the sixtieth day after notice
of the Offer. Upon the purchase or sale of shares pursuant to this SECTION 6.4,
this Agreement shall automatically terminate without further action. Failure by
either Shareholder to deliver an Offer within forty-five (45) days of notice of
a Final Impasse shall constitute a waiver of each Shareholder's rights under
this SECTION 6.4 with respect to the particular Final Impasse.
ARTICLE VII
-----------
Annual Operating Budgets for VC Holding
---------------------------------------
7.1. INITIAL STRATEGIC PLAN. The Shareholders agree that the Initial
Strategic Plan for VC Holding will be as set forth on EXHIBIT D to this
Agreement. This plan shall govern the operations of VC Holding for the first
fiscal year following the execution of this Agreement and until otherwise
modified in accordance with this ARTICLE VII.
7.2. SUBMISSION OF ANNUAL OPERATING BUDGET. At least forty-five (45)
days prior to the end of the calendar year following the expiration of the
Initial Strategic Plan and at least forty-
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five (45) days prior to the end of each subsequent calendar year, the Managing
Director of VC Holding shall prepare a report on VC Holding's working capital
requirements and operating budget for the next succeeding calendar year, which
will contain an itemized estimate of the sources of revenue, the cost of goods
sold, selling, general, and administrative expenses, interest expense, net
income, and all expenditures proposed to be undertaken by VC Holding for such
year (the "PROPOSED BUDGET"). Upon preparation of the Proposed Budget, the
Managing Director shall promptly submit the Proposed Budget to the VC Holding
Board for consideration.
7.3. APPROVAL OF ANNUAL OPERATING BUDGET. Promptly after receipt of the
Proposed Budget, but in any event not less than thirty (30) days prior to the
end of the calendar year, the VC Holding Board shall meet to review the Proposed
Budget. Upon such review, the VC Holding Board will vote on the Proposed Budget.
If the Proposed Budget is approved by Extraordinary Directors Action, the
Proposed Budget shall become VC Holding's operating budget for the next
succeeding calendar year. If the Proposed Budget is not approved by
Extraordinary Directors Action, the Managing Director will revise the Proposed
Budget as soon as possible and resubmit it to the VC Holding Board for
consideration by Extraordinary Directors Action. The operating budget for the
previous calendar year shall continue to govern the operations of VC Holding
(but (a) revised to the extent the Shareholders agree and (b) in any event,
adjusted for inflation provided that such adjustment does not affect Libbey's
Expected Sales target (as defined in the Distribution Agreement, dated of even
date, by and among Vitro, Crisa Corporation, Vitrocrisa, Libbey and Libbey Glass
Inc.)) until such time as a Proposed Budget is approved by the VC Holding Board
by Extraordinary Directors Action.
ARTICLE VIII
------------
Miscellaneous Provisions
------------------------
8.1. GOVERNING LANGUAGE. Notwithstanding the translation of this
Agreement or any of its Exhibits into Spanish or any other language, the English
language version of this Agreement and any of its Schedules and Exhibits shall
be controlling and shall govern in any legal proceeding; provided, however, that
with respect to the Revised VC Holding Estatutos the Spanish language version
shall control.
8.2. NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their respective
successors and permitted assigns.
8.3. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties related to the subject matter hereof and supersedes any prior
understandings, agreements, or representations by or among the parties, written
or oral, that may have related in any way to the subject matter hereof.
8.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns.
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8.5. ASSIGNMENT. No party may assign or otherwise transfer any of its
rights or obligations under this Agreement by operation of law or otherwise,
without the prior written consent of the other parties, which consent shall not
be unreasonably withheld. Any purported or attempted assignment contrary to the
terms hereof shall be null and void and of no force or effect.
8.6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
8.7. HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and are not part of this Agreement
and shall not affect in any way the meaning or interpretation of this Agreement.
8.8. 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 Libbey or to LGA3, such notices shall be addressed to:
Libbey Inc.
300 Madison Avenue
Toledo, Ohio 43604
USA
Attn: General Counsel Fax No. (419) 325-2585
or to any subsequent address of which Libbey may notify the other parties in
writing.
If to Vitro, such notices shall be addressed to:
Vitro Corporativo, S.A. de C.V.
Av. del Roble 660
Col. Valle del Campestre
Garza Garcia, N.L.
Mexico 66225
Attn: Director Juridico Internacional Fax No. (528) 329-1272
or at any subsequent address of which Vitro may notify the other parties in
writing.
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If to VC Holding, such notices shall be addressed to:
Vitrocrisa Holding, S.A. de C.V.
Doblado 1627 Nte.
Col. Terminal
Monterrey, N.L. 64580
Attn: Director General Fax No. (528) 329-3009
or at any subsequent address of which VC Holding may notify the other parties in
writing.
Any party hereto may change its address or telecopier number for the purposes
hereof by giving notice thereof to the other parties in the manner provided
herein.
8.9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the substantive laws of the United Mexican States.
8.10. 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, 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. 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
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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 8.10 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.
(f) This SECTION 8.10 will not apply to any matter that is to
be resolved pursuant to ARTICLE V or pursuant to ARTICLE VI.
8.11. Confidentiality.
----------------
8.11.1. Each Shareholder shall use best efforts to maintain in
confidence and protect the confidentiality of all Confidential Information and
shall not disclose any Confidential Information to any third party not
affiliated with a Shareholder without the prior written consent of the other
Shareholder, provided that each Shareholder shall be entitled to use the
Confidential Information for any and all lawful purposes relating to its
business, operations and activities, including the financing and auditing
thereof. For purposes of this Agreement "Confidential Information" shall mean
all confidential or proprietary information of VC Holding relating to its
business or operations or of a Shareholder which is provided for or in
connection with the business or operations of VC Holding, which is provided to a
Shareholder or any of their respective Representatives (as defined below) by VC
Holding or by any other Shareholder or any of its Representatives and identified
as confidential or proprietary as required by Section 8.11.6; provided, however,
that the term shall not include (i) information known to the recipient prior to
receipt thereof from the other Shareholder or from VC Holding in connection with
this Agreement, (ii) information which, at the time of disclosure hereunder, is
already in the public domain, (iii) information which, after disclosure
hereunder, becomes part of the public domain by publication or otherwise through
no fault of the recipient, (iv) information obtained by a recipient from a third
party (not Affiliated with a Shareholder) in lawful possession of such
information which is not under a confidentiality obligation to the Person (as
defined below) from whom such information originated or (v) information that is
independently developed without the benefit of the Confidential Information.
8.11.2. Notwithstanding the provisions of Section 8.11.1, each
Shareholder may disclose Confidential Information to its or its Affiliates'
respective Representatives, provided that (a) such Representative has a need to
receive such Confidential Information to perform its
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duties, (b) the disclosing Shareholder advises such Representative of the
confidential nature of the disclosed Confidential Information, and (c) the
disclosing Shareholder uses all reasonable efforts to cause such Representative
to protect and maintain the confidentiality of the disclosed Confidential
Information as provided herein.
8.11.3. Notwithstanding the provisions of Section 8.11.1, each
Shareholder may disclose Confidential Information (i) in connection with reports
of earnings of a Shareholder, (ii) to the extent, in the opinion of such
Shareholder's legal counsel, required by the laws applicable to such
Shareholder, including without limitation, all securities laws, or (iii) in
cases involving dispute resolution under the procedures set forth in 8.10.
8.11.4 For purposes of this Section 8.11, the following terms
shall have the meanings given them below:
"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;
"Person" shall mean any natural person, any corporation, partnership, limited
liability company, trust or other entity, and any governmental or judicial
authority, body or entity;
"Affiliate" shall mean, with respect to any Person, the following: (i) any other
Person that directly, or indirectly through one or more intermediaries, controls
such Person, (ii) any other Person that is controlled by or is under common
control with such Person, or (iii) any subsidiary of such Person.
8.11.5. The obligations of the Shareholders under this Section
8.11 shall survive the expiration or termination of this Agreement to the
maximum extent permitted by applicable law.
8.11.6. To be Confidential Information, all information
disclosed in tangible form shall be conspicuously marked confidential or
proprietary at the time of initial disclosure to the recipient and information
conveyed orally shall be identified as confidential or proprietary at the time
of initial disclosure to the recipient and summarized in writing, conspicuously
marked confidential or proprietary and given to the recipient within thirty days
after the initial disclosure. Information not so identified will not be deemed
to be Confidential Information.
8.11.7 In the event any Shareholder 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, the
Shareholder that is requested or required will give VC Holding and the other
Shareholder written notice of such request or requirement so that the
Shareholder receiving the notice or VC Holding 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, the Shareholder to whom such request
or requirement is directed will furnish only that portion of the
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Confidential Information that, in the opinion of counsel to such Shareholder, is
legally required to be disclosed and, upon the request of the other Shareholder
or VC Holding, use its best efforts to obtain assurances that confidential
treatment will be accorded to such information.
8.12. AMENDMENTS AND WAIVERS. This Agreement may be amended, modified,
superseded, or canceled and any of its terms, covenants, representations,
warranties, undertakings, or conditions may be waived only by an instrument in
writing signed by (or by some person duly authorized by) all of the parties
hereto or, in the case of a waiver, by the party waiving compliance.
8.13. SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
8.14. EXHIBITS AND SCHEDULES. The Exhibits and Schedules identified in
this Agreement are incorporated herein by reference and made a part hereof.
8.15. PRESS RELEASES AND ANNOUNCEMENTS. No party shall issue any press
release or announcement relating to the subject matter of this Agreement without
the prior written approval of the other parties hereto; provided, however, that
any party may make any public disclosure it believes in good faith is required
by law or regulation (in which case the disclosing party will advise the other
party prior to making the disclosure).
8.16. NO VIOLATION OF LAW. This Agreement shall not be construed to
require either party to be compelled, and no party will compel VC Holding, to do
any act or remain in any situation in violation of any law of a governmental
authority applicable to such party.
8.17. VITRO UNDERTAKING. Vitro agrees to do such things and take such
actions so as to enable VC Holding to fulfill its obligations under this
Agreement.
8.18. LIBBEY UNDERTAKING. Libbey agrees to do such things and take such
actions so as to enable LGA3 and VC Holding to fulfill its obligations under
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
LIBBEY INC.,
a Delaware corporation
By: /s/ Kenneth G. Wilkes
---------------------------------------
Name: Kenneth G. Wilkes
-------------------------------------
Title: V.P. CFO
------------------------------------
LGA3 CORP.,
a Delaware corporation
By: /s/ Kenneth G. Wilkes
---------------------------------------
Name: Kenneth G. Wilkes
-------------------------------------
Title: V.P. CFO
------------------------------------
VITRO, S.A.,
a sociedad anonima organized under the
laws of the United Mexican States
By: /s/ Claudio Del Ville
---------------------------------------
Name: Claudio Del Ville
-------------------------------------
Title: Attorney in Fact
------------------------------------
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VITROCRISA HOLDING, S.A. DE C.V.,
a sociedad anonima with variable capital
organized under the laws of the United
Mexican States
By: /s/ Roberto B. Rubio
---------------------------------------
Name: Roberto B. Rubio
-------------------------------------
Title: Director General
------------------------------------
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