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Exhibit 10.31
XXXXX XXXXXX, S.A. DE C.V.
SHAREHOLDERS AGREEMENT
This SHAREHOLDERS 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 XXXXX XXXXXX, S.A. DE C.V., a sociedad anonima with
variable capital organized under the laws of the United Mexican States ("NEWCO
FINANCE"). 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 certain of its subsidiaries) and Vitro (and certain of its
subsidiaries) have entered into that certain Master Investment Agreement dated
of even date (the "MASTER INVESTMENT AGREEMENT") pursuant to which, among other
things, (a) Vitro acquired all of the Series A Shares of Newco Finance, which
represents fifty-one percent (51%) of the total issued and outstanding capital
stock of Newco Finance, for an aggregate purchase price of US$15,300,000, (b)
LGA3 acquired all of the Series B Shares of Newco Finance, which represents
forty-nine percent (49%) of the total issued and outstanding capital stock of
Newco Finance, for an aggregate purchase price of US$14,700,000, and (c) each of
Vitro and LGA3 agreed to cause Newco Finance to purchase from Vitro
US$30,000,000 of intercompany debt (the "INTERCOMPANY DEBT") due Vitro from
Vitrocrisa Holding, S.A. de C.V., a sociedad anonima with variable capital
organized under the laws of the United Mexican States ("VC HOLDING").
Libbey, LGA3, Vitro, and Newco Finance each desire to enter into this
Agreement for the purpose of setting forth the principles for the operation of
Newco Finance, which shall be limited to holding the Intercompany Debt and
distributing the income earned therefrom to its Shareholders in the form of
dividends. 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 Newco Finance
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1.1. FORM. Newco Finance was incorporated pursuant to public deed
number 8,980, dated August 22, 1997, granted before Notary Public number 25 for
the District of Monterrey, State of Nuevo Xxxx, Lic. Xxxxx Xxxxxxxx Xxxxx,
recorded with the Public Registry of Commerce for the District of Monterrey,
State of Nuevo Xxxx on August 28, 1997. A copy of the Xxxxx Xxxxxx, S.A. de C.V.
Estatutos is attached hereto as EXHIBIT A.
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1.2. PLACE OF BUSINESS. The corporate domicile and principal place of
business of Newco Finance shall continue to be located in Monterrey, Nuevo Xxxx,
or such other place as the Shareholders may from time to time designate.
1.3. PURPOSE. The purposes for which Newco Finance is organized
include, but are not limited to, the following: (a) to purchase and hold the
Intercompany Debt, (b) to declare and distribute dividends to its Shareholders
from the income received on the Intercompany Debt, and (c) to engage in such
activities as are lawful and approved by the unanimous vote of the Shareholders.
1.4. ENDORSEMENT OF CERTIFICATES. At the Closing (as defined in the
Master Investment Agreement), Newco Finance shall issue stock certificates and
deliver them to the Shareholders, which shall comply with the terms of the Xxxxx
Xxxxxx, S.A. de C.V. 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 Xxxxx Xxxxxx, 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."
Newco Finance 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 NEWCO FINANCE. The capital stock of Newco Finance
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 Xxxxx Xxxxxx,
S.A. de C.V. 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 Newco Finance to the Shareholders (the "DIVIDEND POLICY"). Each
of the Shareholders will cause their respective members of the board of
directors of Newco Finance (the "NEWCO FINANCE 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 Newco Finance
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3.1. THE SHAREHOLDERS MEETINGS; QUORUM. The shareholders meeting is the
supreme authority of Newco Finance. 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 Newco Finance in
accordance with the call for the meeting made pursuant to the Xxxxx Xxxxxx, S.A.
de C.V. 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 Newco Finance 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 Newco Finance 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
proxies representing at least fifty-five percent (55%) of the capital stock of
Newco Finance. Resolutions in Extraordinary Shareholders Meetings held either in
first or subsequent calls shall be adopted by the affirmative vote of
Shareholders or their
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representatives holding at least fifty-five percent (55%) of the capital stock
of Newco Finance.
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 Newco Finance and calls for an Extraordinary
Shareholders Meeting of Newco Finance 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.
(a) COMPOSITION AND APPOINTMENT. The Newco Finance 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 Newco Finance, Vitro shall be
entitled, in its sole and absolute discretion, to designate four (4) Members
(and their alternates) to the Newco Finance 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, S.A. de C.V., a sociedad anonima with
variable capital organized under the laws of the United Mexican States
("Vitrocrisa"), and VC Holding. As the owner of Series B Shares of Newco
Finance, LGA3 shall be entitled, in its sole and absolute discretion, to
designate three (3) Members (and their alternates) to the Newco Finance 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 and VC
Holding. The names of the Members of the Newco Finance 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 Newco Finance Board and to consider reasonable objections of any Shareholder
to the designation, removal, and replacement of any Member and alternate of the
Newco Finance 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
Newco Finance Board. No Member or alternate of the Newco Finance 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 NEWCO FINANCE 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 Newco Finance to the
Newco Finance Board, which, by way of illustration and not limitation, shall
include the power and authority to:
(i) direct, manage, control, and operate Newco Finance;
(ii) set strategic direction for Newco Finance;
(iii) direct all of Newco Finance's business and management
policies and specific business and operational
decisions in the ordinary course of business;
(iv) acquire and dispose of assets of Newco Finance;
(v) control litigation and administrative proceedings of
Newco Finance;
(vi) enter into contracts on behalf of Newco Finance; 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 Newco Finance Board unless (i) approved by a majority of
the Members of the Newco Finance 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 Newco Finance to any Shareholder in
accordance with SECTION 2.2;
(ii) Approval of any proposal to change the corporate
purpose of Newco Finance;
(iii) Approval of transactions that would dilute any
Shareholder's interest in Newco Finance;
(iv) The approval by the Newco Finance Board of annual
operating budgets pursuant to ARTICLE VII;
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(v) The approval of any expenditures in excess of 120% of
the allotment for such expenditures as set forth in
any annual operating budget for Newco Finance as
determined in accordance with ARTICLE VII;
(vi) Formation of a partnership or joint venture between
Newco Finance and another business entity; and
(vii) Submittal to the Ordinary Shareholders Meeting of the
financial statements and report for approval.
(e) MEETINGS. The Newco Finance 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 Newco Finance
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 Newco Finance 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 Newco Finance Board or their alternates must be present to
transact business. Each meeting of the Newco Finance 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 Newco Finance 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 Newco Finance Board is
required or permitted to take any action pursuant to a meeting of the Newco
Finance 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 NEWCO FINANCE BOARD. Each Member shall be
indemnified by Newco Finance 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 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.
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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 Newco Finance 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 Newco Finance, and neither the Libbey 100%
Group nor the Vitro 100% Group shall be liable to Newco Finance or any
Shareholder for breach of any fiduciary duty or duty of loyalty to Newco Finance
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 Newco Finance is or could reasonably be expected to become
financially able to undertake, which relates to Newco Finance's line of business
and in which Newco Finance 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.
(a) TRANSFERS. No Shareholder shall transfer all or any portion of its
interest in Newco Finance 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 Newco Finance 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 Newco Finance 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
reasonable conditions 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 Newco Finance.
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4.2. SHAREHOLDERS FIRST OPTION TO PURCHASE JOINT VENTURE INTEREST.
(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 Newco
Finance capital stock held, directly or
indirectly, by LGA3, (b) shares of
Vitrocrisa capital stock held, directly or
indirectly, by LGA3, (c) shares of VC
Holding 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;
"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 Newco Finance or any interest therein shall (save in respect of transfers
made pursuant to SECTION 4.2(i)) be
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subject to the restrictions set forth in this SECTION 4.2. A Shareholder may not
transfer or dispose of its shares in Newco Finance 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 Newco Finance, 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 Holding, S.A. de C.V. Shareholders Agreement dated of even
date (the "VC HOLDING SHAREHOLDERS AGREEMENT"), to the Vitrocrisa, S.A. de C.V.
Shareholders Agreement dated of even date (the "VITROCRISA SHAREHOLDERS
AGREEMENT"), and to the Limited Liability Company Agreement of Crisa Industrial,
L.L.C. dated of even date (the "LLC AGREEMENT," and collectively with this
Agreement, the VC Holding Shareholders Agreement, and the Vitrocrisa
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.
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(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 Newco
Finance, Vitrocrisa, VC Holding, 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.
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 Newco Finance is declared bankrupt, has a receiver
appointed over all or substantially all of its assets, or is
dissolved; or
(c) by decree of a court of competent jurisdiction.
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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 Newco Finance 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 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 Newco Finance, 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
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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 VC Holding Shareholders Agreement or
under ARTICLE V of the Vitrocrisa Shareholders Agreement or
under ARTICLE XII of the LLC Agreement; and
(j) the occurrence of a Libbey Change of Control or a Vitro Change
of Control (each 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
Newco Finance 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 Newco Finance 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 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.
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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 Newco Finance 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.
(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."
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(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 VC Holding, Vitrocrisa, 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:
(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.
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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 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
Newco Finance within the time limits set forth in SECTION 8.10(a), (b) the other
Shareholder has, or the other Shareholder's Members of the Newco Finance 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 Newco
Finance 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 Newco
Finance'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.
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 CEOs 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
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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 Newco Finance
------------------------------------------
7.1. INITIAL STRATEGIC PLAN. The Shareholders agree that the Initial
Strategic Plan for Newco Finance will be as set forth on EXHIBIT D to this
Agreement. This plan shall govern the operations of Newco Finance 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-five (45) days prior to the end of
each subsequent calendar year, the Managing Director of Newco Finance shall
prepare a report on Newco Finance'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 Newco Finance for such year (the "PROPOSED
BUDGET"). Upon preparation of the Proposed Budget, the Managing Director shall
promptly submit the Proposed Budget to the Newco Finance 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 Newco Finance Board shall meet to review the
Proposed Budget. Upon such review, the Newco Finance Board will vote on the
Proposed Budget. If the Proposed Budget is approved by Extraordinary Directors
Action, the Proposed Budget shall become Newco Finance'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 Newco Finance Board for
consideration by Extraordinary
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Directors Action. The operating budget for the previous calendar year shall
continue to govern the operations of Newco Finance (but revised to the extent
the Shareholders agree) until such time as a Proposed Budget is approved by the
Newco Finance 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 Xxxxx Xxxxxx, S.A. de C.V. 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.
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
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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.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
XXX
Attn: General Counsel Fax No. (000) 000-0000
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 Xxxxx 660
Col. Xxxxx xxx Xxxxxxxxx
Xxxxx Xxxxxx, X.X.
Xxxxxx 00000
Attn: Director Juridico Internacional Fax No. (000) 000-0000
or at any subsequent address of which Vitro may notify the other
parties in writing.
If to Newco Finance, such notices shall be addressed to:
Xxxxx Xxxxxx, S.A. de C.V.
c/o Vitrocrisa, S.A. de X.X.
Xxxxxxx 1627 Nte.
Col. Terminal
Monterrey, N.L. 64580
Attn: Director General Fax No. (000) 000-0000
or at any subsequent address of which Newco Finance 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.
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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 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.
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(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.
(a) 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 Newco Finance relating to its
business or operations or of a Shareholder which is provided for or in
connection with the business or operations of Newco Finance, which is provided
to a Shareholder or any of their respective Representatives (as defined below)
by Newco Finance or by any other Shareholder or any of its Representatives and
identified as confidential or proprietary as required by SECTION 8.11.(f);
provided, however, that the term shall not include (i) information known to the
recipient prior to receipt thereof from the other Shareholder or from Newco
Finance 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.
(b) Notwithstanding the provisions of SECTION 8.11(a), each
Shareholder may disclose Confidential Information to its or its Affiliates'
respective Representatives, provided that (i) such Representative has a need to
receive such Confidential Information to perform its duties, (ii) the disclosing
Shareholder advises such Representative of the confidential nature of the
disclosed Confidential Information, and (iii) 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.
(c) Notwithstanding the provisions of SECTION 8.11(a), 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 SECTION
8.10.
(d) 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,
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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.
(e) 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.
(f) 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.
(g) 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 Newco Finance and the other
Shareholder written notice of such request or requirement so that the
Shareholder receiving the notice or Newco Finance 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 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 Newco
Finance, 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
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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 Newco Finance, 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 Newco Finance 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 Newco Finance 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/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------------
Title: Vice President and Chief Financial Officer
-------------------------------------------
LGA3 CORP.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------------
Title: Vice President and Chief Financial Officer
-------------------------------------------
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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XXXXX XXXXXX, S.A. DE C.V.,
a sociedad anonima with variable capital organized
under the laws of the United Mexican States
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------------------
Title: Director
-------------------------------------------
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