<PAGE>
EXHIBIT 2.01
----------
PURCHASE AGREEMENT
----------
among
VITRO, S.A. DE C.V.,
CRISA LIBBEY S.A. DE C.V.,
CRISA CORPORATION,
VITROCRISA HOLDING, S. DE R.L. DE C.V.,
VITROCRISA S. DE R.L. DE C.V.,
VITROCRISA COMERCIAL, S. DE R.L. DE C.V.,
CRISA INDUSTRIAL, L.L.C.,
LIBBEY MEXICO, S. DE R.L. DE C.V.,
LIBBEY EUROPE, B.V.
and
LGA3 CORPORATION
Dated as of April 2, 2006
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.01. Certain
Defined Terms.................................... 1
SECTION 1.02.
Definitions..............................................
24
SECTION 1.03.
Interpretation and Rules of Construction.................
25
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase
and Sale......................................... 25
SECTION 2.02. Purchase
Price............................................ 26
SECTION 2.03.
Closing...................................................
26
SECTION 2.04. Closing
Deliveries by Sellers............................. 26
SECTION 2.05. Closing
Deliveries by Purchasers.......................... 27
SECTION 2.06.
Escrow....................................................
28
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
SECTION 3.01.
Organization, Authority and Qualification of Sellers......
28
SECTION 3.02.
Organization, Authority and Qualification of the Acquired
Companies.................................................
29
SECTION 3.03.
Capitalization............................................
29
SECTION 3.04.
Subsidiaries..............................................
30
SECTION 3.05. No
Conflict...............................................
30
SECTION 3.06.
Governmental Consents and Approvals.......................
30
SECTION 3.07.
Financial Information; Books of Account...................
30
SECTION 3.08.
Sufficiency of Assets.....................................
31
SECTION 3.09. Absence
of Undisclosed Liabilities........................ 32
SECTION 3.10.
Receivables...............................................
32
SECTION 3.11.
Inventories...............................................
32
SECTION 3.12. Conduct
in the Ordinary Course............................ 33
SECTION 3.13.
Litigation................................................
33
SECTION 3.14.
Compliance with Laws......................................
33
SECTION 3.15.
Environmental Matters.....................................
35
SECTION 3.16.
Intellectual Property.....................................
36
SECTION 3.17. Business
Real Property.................................... 37
SECTION 3.18. Employee
Benefit Matters.................................. 38
SECTION 3.19.
Taxes.....................................................
39
SECTION 3.20. Material
Contracts........................................ 40
SECTION 3.21.
Customers.................................................
42
SECTION 3.22.
Suppliers.................................................
42
SECTION 3.23. Labor
Relations........................................... 43
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(continued)
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SECTION 3.24.
Brokers...................................................
44
SECTION 3.25.
Affiliate Transactions....................................
44
SECTION 3.26.
Insurance.................................................
44
SECTION 3.27. Probable
Success.......................................... 45
SECTION 3.28. No Other
Representations.................................. 45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
SECTION 4.01.
Organization and Authority of Purchasers..................
45
SECTION 4.02. No
Conflict...............................................
46
SECTION 4.03.
Governmental Consents and Approvals.......................
46
SECTION 4.04.
Securities Act............................................
46
SECTION 4.05.
Investment Experience, Access to Information..............
46
SECTION 4.06.
Financing.................................................
46
SECTION 4.07.
Litigation................................................
46
SECTION 4.08.
Brokers...................................................
47
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct
of Business Prior to the Closing.................. 47
SECTION 5.02. Access
to Information and Personnel....................... 52
SECTION 5.03.
Confidentiality...........................................
53
SECTION 5.04.
Regulatory and Other Authorizations; Notices and
Consents..................................................
54
SECTION 5.05. Retained
Names and Marks.................................. 54
SECTION 5.06. Notice
of Developments.................................... 55
SECTION 5.07. Further
Action; Supplemental Assets and Liabilities;
Guaranties................................................
56
SECTION 5.08. Shared
Contracts.......................................... 58
SECTION 5.09. Shared
Liabilities........................................ 60
SECTION 5.10.
Production of Witnesses and Individuals; Privilege
Matters...................................................
60
SECTION 5.11. Mail and
Other Communications............................. 61
SECTION 5.12.
Intercompany Arrangements.................................
61
SECTION 5.13.
Non-Assignment............................................
62
SECTION 5.14.
Non-Competition; Non-Solicitation.........................
62
SECTION 5.15.
Additional Financial Information..........................
65
SECTION 5.16.
Remission of Funds........................................
67
SECTION 5.17.
Ancillary Agreements......................................
67
SECTION 5.18. Cash and
Bank Accounts.................................... 68
SECTION 5.19.
Cooperation with Financing................................
68
SECTION 5.20. General
Manager........................................... 69
SECTION 5.21. Taller
de Coleccion....................................... 70
SECTION 5.22. Certain
Action Proceeds................................... 70
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(continued)
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ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01.
Post-Employment Employment Benefit Liabilities............
70
SECTION 6.02. Employee
Benefits......................................... 70
SECTION 6.03. Transfer
of Employees..................................... 71
ARTICLE VII
TAX MATTERS
SECTION 7.01. Tax
Returns............................................... 71
SECTION 7.02.
Cooperation on Tax Matters................................
72
SECTION 7.03. Transfer
Taxes............................................ 72
SECTION 7.04. Tax
Refunds............................................... 73
SECTION 7.05.
Accounting Dividend Tax Credit............................
73
ARTICLE VIII
CONDITIONS TO CLOSING
SECTION 8.01.
Conditions to Obligations of Sellers......................
73
SECTION 8.02.
Conditions to Obligations of Purchasers...................
74
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Survival
of Representations and Warranties................ 76
SECTION 9.02.
Indemnification by Sellers................................
76
SECTION 9.03.
Indemnification by Purchasers.............................
77
SECTION 9.04. Limits
on Indemnification................................. 77
SECTION 9.05. Notice
of Loss; Third Party Claims........................ 79
SECTION 9.06.
Distributions from Escrow Fund; Right of Set-Off..........
80
SECTION 9.07. Tax
Indemnification....................................... 81
SECTION 9.08.
Characterization of Indemnification Payments..............
83
ARTICLE X
TERMINATION
SECTION 10.01.
Termination...............................................
83
SECTION 10.02. Effect of
Termination..................................... 84
SECTION 10.03. Exclusive
Remedies........................................ 84
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TABLE OF CONTENTS
(continued)
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ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01.
Expenses..................................................
85
SECTION 11.02.
Notices...................................................
85
SECTION 11.03. Public
Announcements...................................... 87
SECTION 11.04.
Severability..............................................
87
SECTION 11.05. Entire
Agreement.......................................... 88
SECTION 11.06.
Assignment................................................
88
SECTION 11.07.
Amendment.................................................
88
SECTION 11.08.
Waiver....................................................
88
SECTION 11.09. No Third Party
Beneficiaries.............................. 88
SECTION 11.10.
Currency..................................................
89
SECTION 11.11. Governing Law; Agent for Service of
Process............... 89
SECTION 11.12. Waiver of Jury
Trial...................................... 89
SECTION 11.13. Seller
Representative..................................... 89
SECTION 11.14. Specific
Performance...................................... 91
SECTION 11.15.
Counterparts..............................................
91
SECTION 11.16. Joint and Several
Obligations............................. 91
SECTION 11.17. No Right of
Setoff........................................ 91
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TABLE OF CONTENTS
(continued)
EXHIBITS
Exhibit 1.01 - A: Form
of Assignment of Interests and Amendment to Limited
Liability Company Agreement of Crisa Industrial, L.L.C.
Exhibit 1.01 - B: Form
of Assignment and Assumption Agreement
Exhibit 1.01 - C: Form
of Bill of Sale (factura fiscal)
Exhibit 1.01 - D:
Business Real Property
Exhibit 1.01 - E:
Capital Expenditure Plan
Exhibit 1.01 - F:
Exchange-In-Kind Deed
Exhibit 1.01 - G:
Excluded Business
Exhibit 1.01 - H:
FACUSA Intellectual Property
Exhibit 1.01 - I: GM
Employment Agreement Term Sheet
Exhibit 1.01 - J:
Intercompany Payables
Exhibit 1.01 - K1: Form of Intellectual Property Assignment
(Assignment-In)
Exhibit 1.01 - K2: Form of Intellectual Property Assignment
(Assignment-Out)
Exhibit 1.01 - L: List
of JV Agreements
Exhibit 1.01 - M: Form
of Non-Competition Agreement
Exhibit 1.01 - N:
Description of Operating Plan
Exhibit 1.01 - O1: Permitted Encumbrances
Exhibit 1.01 - O2: Permitted Encumbrances (to be removed prior to
Closing)
Exhibit 1.01 - P:
Racks and Conveyors
Exhibit 1.01 - Q:
Shared Assets
Exhibit 1.01 - R: Form
of Substitution Agreement (Retirees)
Exhibit 1.01 - S: Form
of Limited Termination and Release Agreement
Exhibit 1.01 - T:
Vitro Guarantees
Exhibit 1.01 - U: Form
of Vitro Software License Agreement
Exhibit 2.01: Allocation
of Interests among Purchasers
Exhibit 2.02(b):
Allocation of the Purchase Price
Exhibit 2.04(e):
Resignation of Roberto Rubio Barnes
Exhibit 2.04(k):
Form of Irrevocable Power of Attorney
Exhibit 2.06: Form of
Escrow Agreement
Exhibit 5.05: Retained
Names and Marks
Exhibit 5.05(d):
Names and Marks that Seller shall cease to use
Exhibit 5.07(b):
Supplemental Assets and Supplemental Liabilities
Exhibit 5.14(a):
Marketing Materials
Exhibit 5.14(e):
Employees with Knowledge of JD Edwards Modules
Exhibit 6.01: Former
Business Employee Liability Transfer Procedures
Exhibit 6.03:
Transferred Employees
Exhibit 8.02(g):
Business Assets for which Encumbrance Certificates
(certificados de liberdad de gravamenes) are required at
Closing
Exhibit 8.02(h):
Required Consents
Exhibit 8.02(o):
Powers of Attorney
v
<PAGE>
PURCHASE AGREEMENT (this "AGREEMENT"), dated as of April 2,
2006,
among Vitro, S.A. de C.V., a Mexican Sociedad Anonima de Capital
Variable
("VITRO"), Crisa Corporation, a Delaware corporation ("CRISA CORP."
and,
together with Vitro, the "SELLERS"), Crisa Libbey S.A. de C.V., a
Mexican
Sociedad Anonima de Capital Variable ("CRISA LIBBEY"), Vitrocrisa
Holding, S. de
R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada de
Capital Variable
("VC HOLDING"), Vitrocrisa S. de R.L. de C.V., a Mexican Sociedad
de
Responsabilidad Limitada de Capital Variable ("VITROCRISA"),
Vitrocrisa
Comercial, S. de R.L. de C.V., a Mexican Sociedad de
Responsabilidad Limitada de
Capital Variable ("VC COMERCIAL"), Crisa Industrial, L.L.C., a
Delaware limited
liability company ("CRISA INDUSTRIAL" and, collectively with Crisa
Libbey, VC
Holding, Vitrocrisa and VC Comercial, the "ACQUIRED COMPANIES"),
Libbey Mexico,
S. de R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada
de Capital
Variable ("LIBBEY MEXICO"), Libbey Europe, B.V., a limited
liability company
(besloten vennootschap met beperkte aansprakelijkheid) organized
under the laws
of the Netherlands ("LIBBEY EUROPE"), and LGA3 Corporation, a
Delaware
corporation ("LGA3" and, together with Libbey Europe and Libbey
Mexico,
"PURCHASERS").
WHEREAS, capitalized terms used and not otherwise defined in
this
Agreement shall have the respective meanings given them in Section
1.01 or
Section 1.02, as the case may be, of this Agreement;
WHEREAS, Sellers and Purchasers own all of the outstanding
capital
stock and other ownership interests in the Acquired Companies;
WHEREAS, the Acquired Companies are engaged in the business of
manufacturing, marketing, distributing and selling glassware in
various markets
around the world;
WHEREAS, prior to or concurrently with Closing, Vitro intends
to
transfer, or cause to be transferred, certain assets used in the
operation of
the Business to the Acquired Companies;
WHEREAS, at Closing, Sellers wish to transfer to Purchasers or
Purchasers' designees, and Purchasers wish to acquire or to have
Purchasers'
designees acquire the Interests, upon the terms and subject to the
conditions
set forth in this Agreement; and
WHEREAS, at Closing, the Acquired Companies wish to transfer to
Sellers or their designees, and Sellers wish to acquire or to have
Sellers'
designees acquire, the Plant C Real Property and certain other
assets, upon the
terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual
agreements and covenants set forth in this Agreement, and intending
to be
legally bound, Sellers, the Acquired Companies and Purchasers
(collectively, the
"PARTIES") agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. For purposes of this
Agreement:
<PAGE>
"ACCOUNTING DIVIDEND TAX" means an amount equal to the deferred Tax
in
the amount of 11,555,565 Mexican pesos plus actualizations
(actualizaciones)
through the date of payment, payable in connection with a
distribution of funds
in June, 2003 by Vitrocrisa to VC Holding, and then by VC Holdings
to Vitro and
Libbey Inc.
"ACQUIRED COMPANY GUARANTEES" means all obligations of the
Acquired
Companies under any loan, financing, lease, Contract or other
obligation in
existence as of the Closing Date for which any Acquired Company is
or may be
liable, as guarantor, original tenant, primary obligor, Person
required to
provide financial support in any form whatsoever, or otherwise
(including by
reason of performance guarantees) to the extent relating to the
Excluded
Business.
"ACTION" means any demand, action, claim, suit, countersuit,
arbitration, inquiry, subpoena, discovery request, proceeding or
investigation
by or before any court or grand jury, any Governmental Authority or
any
arbitration or mediation tribunal.
"AFFILIATE" means, with respect to any Person, a Person that,
directly
or indirectly, through one or more intermediaries, controls, or is
controlled
by, or is under common control with, such specified Person.
"ANCILLARY AGREEMENTS" means, collectively, the Non-Competition
Agreement; the Transition Services Agreements; the Escrow
Agreement; any Bills
of Sale; any Assignment and Assumption Agreements; the GM
Employment Agreement;
the Termination and Release Agreement; the Assignment and Amendment
Agreement;
the IP Assignment Agreements; the Vitro Software License Agreement;
the
Exchange-In-Kind Deed; and the Contracts delivered pursuant to
Section 5.12(b).
"APPLICABLE SHARE" means (a) as to Sellers, 51%, and (b) as to
Purchasers, 49%.
"ASRAC FOUNDATION" means ASRAC Caja de Ahorro, A.C.
"ASSETS" means all properties, assets, claims, Contracts and
businesses of every kind, character and description, whether real,
personal or
mixed, tangible or intangible, whether accrued, contingent or
otherwise, and
wherever located (including in the possession of vendors or other
third parties
or elsewhere), including the following: (i) all cash, cash
equivalents, notes
and accounts receivable (whether current or non-current); (ii) all
certificates
of deposit, banker's acceptances and other investment securities of
any other
form and maturity; (iii) the fee interest in all owned real
properties
(including all Improvements located thereon or contained therein
and
appurtenances thereto); (iv) the leasehold interest in all leased
real
properties and all leasehold Improvements, (v) all machinery,
Equipment
(including all transportation and office equipment and all
Improvements leased
from any Governmental Authority), fixtures, trade fixtures and
furniture; (vi)
all office supplies, production supplies, computer hardware, spare
parts, other
miscellaneous supplies and other tangible property of any kind;
(vii) all
capital stock, partnership interests and other equity or ownership
interests or
rights, directly or indirectly, in any Subsidiary or other entity;
(viii) all
inventories of materials, raw materials, catalysts, stores
inventories,
supplies, products and product samples, work-in-process, finished
goods,
consigned goods and other inventories; (ix) all Intellectual
Property; (x) all
rights existing under all Contracts; (xi) all IT Assets; (xii) all
prepayments,
deposits, performance bonds, guarantees, derivative instruments,
receivables
from tax authorities, advances for insurance premiums and deferred
tax assets;
(xiii) all claims, causes of action, choses in action, rights
to
indemnification,
2
<PAGE>
rights of recovery and rights of set-off of any kind; (xiv) all
customer lists
and records pertaining to customers and accounts, personnel
records, all lists
and records pertaining to suppliers and agents, and all books,
ledgers, files
and legal and business records of every kind; (xv) all advertising
materials and
all other printed or written materials, including purchase orders,
forms,
labels, shipping materials, catalogues, sales brochures, operating
manuals, and
instructional documents; (xvi) all goodwill as a going concern;
(xvii) all
employee contracts, including the right thereunder to restrict an
employee from
competing in certain respects; (xviii) all trucks, automobiles and
other
vehicles; (xix) all special and general tools, test devices,
prototypes, models
and any other tangible personal property; (xx) all telephone and
facsimile
numbers, and (xxi) all permits, licenses, approvals and
authorizations, to the
extent transferable, of Governmental Authorities or third parties
relating to
the ownership, possession or operation of the Assets.
"ASSIGNMENT AND AMENDMENT AGREEMENT" means an assignment and
amendment
agreement in all material respects in the form of Exhibit
1.01-A.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means an assignment and
assumption agreement in all material respects in the form of
Exhibit 1.01-B.
"BANK CREDIT AGREEMENT" means that certain Credit Agreement dated
as
of April 2, 2004, as amended as of the date of this Agreement,
among VC
Comercial, as borrower, Vitrocrisa, as guarantor, Bank of Montreal,
as
Administrative Agent, HSBC Bank USA and HSBC Mexico, as Collateral
Agent, Banco
Nacional de Mexico and Harris Nesbit, as Syndication Agent, Harris
Nesbit, as
Arranger, and certain Lenders party thereto.
"BANK DEBT" means the Indebtedness of Vitrocrisa and VC Comercial
from
time to time outstanding under the Bank Credit Agreement.
"BILL OF SALE" means a tax invoice (factura fiscal) that must
comply
with all requirements under Mexican Tax Law and separately state
the amount for
the Value Added Tax, in all material respects in the form of
Exhibit 1.01-C.
"BOOKS AND RECORDS" means all books and records of the Business
Owners
(or complete and correct copies thereof to the extent permitted by
applicable
Law), including all computerized books and records, including the
minute books
(libros de actas), stock record books (registros de acciones),
special registry
of partners (registros especiales de socios), capital variation
books (libros de
variaciones de capital), libros especiales de socios, corporate
charters and
by-laws, acta constitutiva, estatutos sociales y sus reformas or
comparable
constitutive documents, records of share issuances, and related
corporate
records, business plans, books of account, financial and operating
data, price
lists, all books and records relating to employees or former
employees, the
purchase of materials, supplies and services, the manufacture and
sale of
products (including vendor lists) or dealings with customers
(including customer
lists and credit policies and credit information with respect to
customers),
marketing, advertising and promotional materials, product
literature, product
data, product testing reports, market and other research, all Tax
Returns and
Tax work papers, Environmental Permits and all files relating to
any Action the
Liability with respect to which is included in Crisa
Liabilities.
"BUSINESS" means the businesses, activities and operations, as
conducted within the 12-month period prior to Closing, of the
Acquired Companies
and the Supplemental Assets, which includes the manufacture,
distribution and/or
sale of glass tableware (including glass barware, stemware and
other drinkware,
as well as glass dinnerware), glass vessels used for
3
<PAGE>
candles, blender jars, jars for mole and/or jams and jellies,
coffee carafes and
microwave oven plates, but excluding the Excluded Business;
provided, however,
solely for the purposes of (i) Article III, and all references to
any provisions
therein (except as otherwise expressly provided in Article III),
and (ii) the
definition of "Former Business Employees" below,, the term
"BUSINESS" shall
include the manufacture, distribution, marketing and sale of lead
crystal glass
articles that are commonly referred to as "Taller de
Coleccion".
"BUSINESS ASSETS" means all Assets used or held for use in
connection
with the Business on, or at any time during the 12-month period
preceding, the
Closing Date, including (i) all Contracts primarily used or held
for use in
connection with the Business, (ii) all Business Intellectual
Property, (iii) the
Owned Real Property and the Leased Real Property, (iv) all of the
Business Books
and Records, (v) all Equipment used or held for use in connection
with the
Business, (vi) all inventories of raw materials, work in process
finished
products, goods, spare parts, replacement and component parts, and
office and
other supplies used or held for use in connection with the
Business, (vii) all
credits, prepaid expenses, deferred charges, advance payments,
security deposits
and other prepaid items used or held for use in connection with the
Business,
(viii) all accounts receivable related to the Business, (ix) all
rights, claims,
and credits to the extent relating to the Business or to any other
Business
Asset or Crisa Liability, including all rights to indemnification
and any
insurance policies, all rights under the Electroglass Contract, and
all rights
in and to products sold or leased (including products returned
after the Closing
and rights of rescission, replevin and reclamation) in the
operation or conduct
of the Business, (x) the Supplemental Assets, (xi) the Assets set
forth in
Section 3.04 of the Disclosure Schedule, and (xii) all other Assets
reflected on
the Reference Balance Sheet, but in any event excluding the
Excluded Assets.
"BUSINESS BOOKS AND RECORDS" means the Books and Records, to
the
extent they relate exclusively to the Business or the Business
Assets; but
excluding (a) the minutes of any board of directors meetings of any
Seller, or
any Books and Records of any Seller that contain any such minutes
(or excerpts
therefrom) and (b) such portion of any Books and Records of any
Seller
concerning the Transactions.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or
other
day on which banks are required or authorized by Law to be closed
in the U.S. or
Mexico generally.
"BUSINESS EMPLOYEE" means any current or former employee, officer
or
director of any Acquired Company, other than any Excluded
Employee.
"BUSINESS INTELLECTUAL PROPERTY" means all Intellectual Property
used
or held for use in the operation of the Business, including the
Intellectual
Property set forth in Section 3.16(b) of the Disclosure Schedule,
but not
including the Licensed Vitro Intellectual Property or related
source code.
"BUSINESS OWNERS" means, collectively, Sellers and the Acquired
Companies.
"BUSINESS REAL PROPERTY" means the Leased Real Property and the
Owned
Real Property, including the real property set forth on Exhibit
1.01-D, in each
case together with all easements and privileges appertaining or
relating to such
real property, and all Improvements located thereon.
"CAPITAL
EXPENDITURE PLAN" means the capital expenditure plan of the
Business attached hereto as Exhibit 1.01-E.
4
<PAGE>
"CAUSE" means: (a) the General Manager's failure to
substantially
perform his duties (other than any such failure resulting from any
physical or
mental disability), after the Vitro Board delivers to the General
Manager a
written demand for substantial performance specifically identifying
the manner
in which the Vitro Board believes that the General Manager has not
substantially
performed his duties; (b) the General Manager's failure to
substantially follow
and comply with the specific and lawful directives of the Vitro
Board, as
reasonably determined by the Vitro Board (other than any such
failure resulting
from any physical or mental disability), after the Vitro Board
delivers to the
General Manager a written demand for substantial performance
specifically
identifying the manner in which the Vitro Board believes that the
General
Manager has not substantially followed or complied with the
directives of the
Vitro Board; (c) the General Manager's commission of an act of
fraud or
dishonesty resulting in material economic or financial injury to
Vitro or its
Affiliates (including the Acquired Companies); (d) the General
Manager's
engagement in illegal conduct or gross misconduct, in each case
resulting in
material economic or financial injury to Vitro or its Affiliates
(including the
Acquired Companies) or (e) any other event or circumstance
constituting "just
cause" under Mexican labor law.
"CLOSING" means the consummation of the Transactions described
in
Article II of this Agreement, which shall be deemed effective as of
12:01 a.m.
central time on the date of such consummation.
"CLOSING DATE" means the date and time of the Closing.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONSTRUCTORA" means Constructora de Naves Industriales, S.A. de
C.V.
"CONSTRUCTORA RESOLUTION DOCUMENT" means either the letter referred
to
in clause (i)(A) of Section 5.07(i) or the legal opinion referred
to in clause
(ii) of Section 5.07(i).
"CONTRACT" means any contract, agreement, lease, license, sales
order,
purchase order, instrument or other commitment or arrangement,
whether written
or oral, that is binding on any Person or entity or any part of its
property
under applicable Law, and any amendments thereto.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER
COMMON
CONTROL WITH"), with respect to the relationship between or among
two or more
Persons, means the possession, directly or indirectly or as
trustee, personal
representative or executor, of the power to direct or cause the
direction of the
affairs or management of a Person, whether through the ownership of
voting
securities, as trustee, personal representative or executor, by
Contract, or
credit arrangement.
"COTS LICENSE" means a license (i) that is commercially available
from
a third party pursuant to a "shrink-wrap," "click-through" or other
standard
form license agreement with (A) an individual one-time royalty or
license fee of
$15,000 or less and (B) an annual royalty or license fee of $15,000
or less, or
(ii) that is embedded as part of commercially available products or
services for
which no separate license is actually or customarily granted.
"CRISA CUSTOMERS" means any Person who or which has been a customer
of
the Business at any time during the two-year period prior to the
Closing Date.
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<PAGE>
"CRISA LIABILITIES" means all Liabilities of the Acquired
Companies,
whether in existence on the date hereof, or as of or after the
Closing Date, and
all Liabilities allocated to, assumed by or agreed to be performed,
paid or
reimbursed by Purchasers or any Acquired Companies pursuant to this
Agreement or
any of the Ancillary Agreements.
"CRIMINAL PENALTY" means any criminal sentence, penalty or fine
or
similar Liability imposed upon any Person for such Person's
actions, omissions
or violations.
"DELOITTE" means Galaz, Yamazaki, Ruiz Urquiza, S.C. Member of
Deloitte Touche Tohmatsu.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached
hereto,
dated as of the date hereof and as amended or supplemented by
Sellers pursuant
to the terms hereof, delivered by Sellers to Purchasers in
connection with this
Agreement.
"DISTRIBUTION AGREEMENT" means that certain Amended and
Restated
Distribution Agreement, dated as of August 29, 1997, among Vitro,
Crisa Corp.,
Vitrocrisa, Libbey Inc. and Libbey Glass Inc., as amended.
"ELECTROGLASS CONTRACT" means the Technical Assistance and
Supply
Agreement, dated October 1, 2004, between Electroglass, Ltd. and VC
Comercial.
"ENCUMBRANCE" means any lien, encumbrance, security interest,
charge,
mortgage, deed of trust, deed to secure debt, option, pledge,
restriction on
transfer of title or voting, restrictive covenant, right-of-way,
easement,
hypothecation, reservation, servitude, right to occupy of any kind,
right of
first refusal, encroachment, building or use restriction,
conditional sales
agreement, license or any adverse claim of any nature whatsoever,
other than in
the case of securities and any other equity ownership interests,
any
restrictions imposed by federal, state and non-U.S. securities
Laws.
"ENVIRONMENT" the indoor and outdoor environment, including any
navigable waters, waters of the contiguous zone, ocean waters,
natural
resources, surface waters, ground water (and in general any waters
and water
bodies defined as Mexican national waters (aguas nacionales) under
applicable
Environmental Laws), drinking water supply, wetlands, land surface,
subsurface
strata, ambient air, both inside and outside of buildings and
structures,
man-made buildings and structures, and plant and animal life on
earth.
"ENVIRONMENTAL CONDITION" means, with respect to any of the
Business
Real Property or in connection with the operations of the Business,
(i) existing
conditions, ongoing activities or failures to act that violate
Environmental
Laws or that have resulted or could reasonably result in a Release
of Hazardous
Materials, (ii) existing conditions resulting from past Releases of
Hazardous
Materials that have affected or could reasonably result in an
effect on the
Environment and (iii) existing conditions that would result in
potentially
harmful human exposure to Hazardous Materials.
"ENVIRONMENTAL DEFECT" means (i) the failure of any of the
Business
Real Property to be in compliance with any applicable Environmental
Laws; (ii)
any Business Real Property being subject to any agreements, consent
orders,
decrees (other than decrees that are applicable to the public in
general) or
judgments based on any Environmental Laws that negatively impact
the future use
of any portion of any Business Real Property as currently conducted
or that
require any change in the present condition of any Business Real
Property or
6
<PAGE>
the payment of any fine or penalty; (iii) any Business Real
Property being
subject to any uncured notice of violations of or noncompliance
with any
applicable Environmental Laws; or (iv) an Environmental
Condition.
"ENVIRONMENTAL LAWS" means all applicable Laws relating to (i)
pollution, contamination, remediation, protection or regulation of
the
Environment, (ii) any Release, including investigation and clean-up
of such
Release or threatened Release and (iii) the handling, storage,
treatment,
disposal, recycling or transportation of any Hazardous Materials,
including the
Ecological Balance and Environmental Protection Act of Mexico (Ley
General del
Equilibrio Ecologico y la Proteccion al Ambiente), the General Law
on Wastes of
Mexico (Ley General para la Prevencion y Gestion Integral de los
Residuos), the
National Waters Act of Mexico (Ley de Aguas Nacionales), Mexican
official norms
NOM-052-SEMARNAT-1993 and NOM-053- SEMARNAT-1993,
NOM-138-SEMARNAT/SS-2003 (as
well as the internal guidelines used by Mexico's Office of the
Federal
Prosecutor for Environmental Protection (Procuraduria Federal de
Proteccion al
Ambiente) for soils contaminated with heavy metals and their
remediation), the
General Health Law of Mexico (Ley General de Salud), Mexico's
Reglamento Federal
de Seguridad, Higiene y Medio Ambiente en el Trabajo and Mexican
official norm
NOM-010-STPS-1999, as such Laws have been amended or supplemented,
the
regulations promulgated pursuant thereto and the corresponding
environmental
Laws and regulations of the other states and municipalities of
Mexico.
"ENVIRONMENTAL PERMITS" means any permit, approval,
identification
number, license and other authorization required under or issued
pursuant to any
applicable Environmental Law.
"EQUIPMENT" means all equipment, fixtures, physical facilities,
machinery, inventory, spare parts, supplies, tools and other
tangible personal
property.
"ESCROW AGENT" means a trustee to be identified and reasonably
agreed
to by the Parties prior to Closing, which shall hold the Escrow
Amount in trust
for Sellers and Purchasers, and shall manage and disburse the
Escrow Fund in
accordance with the terms and conditions of the Escrow
Agreement.
"ESCROW AMOUNT" is an amount equal to the sum of (i) $8,000,000
plus
(ii) the product of $8,000,000 multiplied by the amount by which
(A) one exceeds
(B) the Former Business Employee Consent Percentage as of the fifth
Business Day
prior to the Closing Date, which amount will be deposited with the
Escrow Agent
at Closing and held and disbursed by the Escrow Agent pursuant to
the terms and
conditions of the Escrow Agreement.
"ESCROW FUND" means the Escrow Amount, as such sum may be increased
or
decreased as provided in the Escrow Agreement.
"EXCHANGE-IN-KIND DEED" means the Exchange-In-Kind Deed between
Vitro
and Vitrocrisa, to be dated as of the Closing Date, in all material
respects in
the form of Exhibit 1.01-F, together with such other good and
sufficient
instruments of conveyance and transfer, sufficient to vest good and
marketable
title to (a) the Plant C Real Property, free and clear of all
Encumbrances,
except Permitted Encumbrances, and (b) the Plant I Real Property
(including all
right, title and interest of Vitro in and to the Plant I
Improvements upon
expiration of the Plant I Surface Use Right), free and clear of
all
Encumbrances, except the Plant I Surface Use Right and Permitted
Encumbrances.
7
<PAGE>
"EXCLUDED ASSETS" means, collectively: (i) the Assets (excluding
the
Racks and Conveyors) that are used exclusively in the Excluded
Business,
including the FACUSA Intellectual Property; (ii) any other Assets
(A) with a
value less than $25,000 per Asset or related group of Assets, and
(B) that are
used primarily in the Excluded Business; (iii) each Seller's
ownership interests
(other than the Interests) in any Person, except (A) Vitrocrisa's
interest in
the Water User Association "Agua Industrial de Monterrey, S. de
U.", (B) 2,880
shares Series "A" with par value of 1.00 Mexican pesos in Gas
Industrial de
Monterrey, S.A. de C.V. and (C) to the extent such Seller owns such
interests as
agent for any of the Acquired Companies in connection with either
of the
Tractebel and Iberdrola Contracts; (iv) all claims, recoveries and
judgments in
favor of or for the benefit of any Vitro Entity relating solely to
any Excluded
Business; (v) all Retained Names and Marks; (vi) the Shared Assets
listed as
such in Exhibit 1.01-Q, except to the extent of any rights therein
provided in
any Ancillary Agreement; and (vii) the Licensed Vitro Intellectual
Property and
related source code, except to the extent of any rights therein
provided in the
Vitro Software License Agreement.
"EXCLUDED BUSINESS" means, collectively: (i) the production,
marketing
and sale of stainless steel and silverplated flatware as conducted
by FACUSA
during the 12 months preceding the Closing Date, (ii) the business,
activities
and operations of Plasticos Bosco, (iii) the production, marketing
and sale of
decorated lead crystal glass articles that are commonly referred to
as Taller de
Coleccion and (iv) the businesses, activities and operations of the
entities or
businesses set forth on Exhibit 1.01-G.
"FACUSA" means Fabricacion de Cubiertos, S.A. de C.V., a
wholly-owned
Subsidiary of Vitro.
"FACUSA INTELLECTUAL PROPERTY" means the Intellectual Property
described on attached Exhibit 1.01-H.
"FINCO" means Fomento Inmobiliario y de la Construccion, S.A. de
C.V.,
a wholly-owned Subsidiary of Vitro, which was merged into Vitro on
March 17,
2005, as evidenced by Notarial Deed number 16,043 dated April 13,
2005 and
recorded on May 12, 2005.
"FORMER BUSINESS
EMPLOYEES" means those individuals previously
employed as officers or employees of the Business (including the
Excluded
Employees), whose employment with the Business was terminated
before the Closing
Date and with respect to whom Post-Employment Benefits are payable
and, if
applicable, any such individual's heirs or other Persons entitled
to all or any
part of such individual's Post-Employment Benefits.
"FORMER BUSINESS EMPLOYEE CONSENT PERCENTAGE" means, as of any
determination date, a fraction:
(a) the numerator of which is the total number of Former
Business
Employees who have Consented (as such term is defined in the Escrow
Agreement);
and
(b) the denominator of which is the total number of Former
Business
Employees, as of the earlier of such date and the Closing Date,
minus the total
number of Former Business Employees who have not Consented (as such
term is
defined in the Escrow Agreement), as of such date, and who have
died and with
respect to whom no heirs or other Persons are entitled to
Post-Employment
Benefits, as of such date.
8
<PAGE>
"GAMMA WAREHOUSE LITIGATION" means the litigation existing as of
the
date of this Agreement between Vitrocrisa, and Urbanizaciones
Gamma, S.A. de
C.V. ("Gamma") whereby Gamma claims that Vitrocrisa did not
surrender a
warehouse facility to Gamma on November 30, 2003. This litigation
is currently
being tried in the civil courts sitting in Monterrey, N.L.
"GENERAL MANAGER" means Mr. Roberto Rubio Barnes.
"GM EMPLOYMENT AGREEMENT" means a written Contract between Vitro
and
the General Manager, to be executed and delivered on or prior to
Closing,
providing for the employment of the General Manager by Vitro and
reflecting the
terms and conditions set forth in Exhibit 1.01-I and being
otherwise reasonably
acceptable to Purchasers.
"GOOD REASON" means the occurrence of any of the following
circumstances, unless such circumstances are fully corrected prior
to the date
on which the termination of the General Manager's employment is
effective:
(a) The General Manager's base salary is reduced materially
without
the prior written consent of Purchasers;
(b) There is a material reduction in the incentive compensation
target
established for the position held by the General Manager and such
reduction is
not approved in writing by Purchasers (but excluding any reduction
that is
generally applied to Vitro executives of the same level as the
General Manager);
or
(c) A material executive benefit or employee benefit to which
the
General Manager is entitled is materially reduced or eliminated
without the
prior written consent of the Purchasers (but excluding any
reduction or
elimination that is generally applied to Vitro executives of the
same level as
the General Manager).
"GOVERNMENTAL AUTHORITY" means any Mexican, U.S. or other
federal,
national, supranational, state, provincial, local or other
government,
governmental, regulatory or administrative authority, agency or
commission or
any court, tribunal, or judicial or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment,
injunction,
decree, stipulation, determination or award entered by or with any
Governmental
Authority.
"HAZARDOUS MATERIALS" means any waste, pollutant, contaminant,
hazardous substance, toxic, ignitable, reactive or corrosive
substance,
hazardous waste, special waste, chemical substance, industrial
substance,
by-product, petroleum or petroleum-derived substance or waste,
whether in solid,
liquid or gaseous form, or any constituent of any such substance,
the
generation, use, handling, treatment, remediation, storage,
transportation,
disposal, discharge, Release, existence or emission of which the
Business is in
any way governed by or subject to any applicable Environmental Law,
including
any and all hazardous substances, wastes and materials defined or
regulated
under any Environmental Law and any waste, material or substance
which is (i)
designated as a "hazardous material" and/or "hazardous waste"
pursuant to the
Ecological Balance and Environmental Protection Act of Mexico (Ley
General del
Equilibrio Ecologico y la Proteccion al Ambiente), (ii) listed or
characterized
as hazardous under Mexican Official Norms NOM-052-ECOL-1993 and
NOM-053-ECOL-1993, (iii) designated as "hazardous wastes" under the
General Law
on Wastes (the Ley General para la Prevencion y Gestion Integral de
los
Residuos), or (iv) any other hazardous
9
<PAGE>
waste, hazardous material, toxic substance, pollutant, hazardous
substance,
radioactive substance or waste, medical waste, petroleum or
petroleum-derived
substance or waste, asbestos, polychlorinated biphenyl, or any
hazardous or
toxic constituent thereof, and in general any substance or material
that is of a
corrosive, reactive, explosive, toxic, flammable or biologically
infectious
nature.
"IMPROVEMENTS" means, with respect to any real property, all
buildings, fixtures, improvements, and facilities located on or
attached to such
real property or owned or leased by any Acquired Company and used
in, on or at
such real property, together with: (a) any and all loading docks,
parking lots,
garages, and other facilities serving any such buildings; (b)
landscaping and
site improvements; and (c) any construction work in progress and
building
materials located on or at the real property or intended to be used
in such
construction work.
"INDEBTEDNESS" of a Person means, without duplication:
(a) all indebtedness of such Person, whether or not contingent,
for
borrowed money;
(b) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments;
(c) all obligations of such Person for the deferred purchase price
of
real or personal property or services other than in the ordinary
course of
business;
(d) all indebtedness created or arising under any conditional sale
or
other title retention agreement with respect to property acquired
by such Person
(even though the rights and remedies of the seller or lender under
such
agreement in the event of default are limited to repossession or
sale of such
property);
(e) all obligations of such Person as lessee under leases that
have
been or should be, in accordance with Mexican GAAP, recorded as
capital
(financial) leases; provided, however, for avoidance of doubt, the
foregoing
does not include the Plant I Building Lease or the Plant I
Sublease;
(f) all obligations, contingent or otherwise, of such Person
under
acceptance, letter of credit or similar facilities;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of such
Person or any
warrants, rights or options to acquire such capital stock, valued,
in the case
of redeemable preferred stock, at the greater of its voluntary or
involuntary
liquidation preference plus accrued and unpaid dividends;
(h) all obligations of such Person required to be treated as debt
of
such Person under Mexican GAAP; provided, however, for avoidance of
doubt, the
foregoing does not include the Plant I Building Lease or the Plant
I Sublease;
(i)
all Indebtedness of others referred to in clauses (a) through
(h)
above guaranteed directly or indirectly in any manner by such
Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (i)
to pay or purchase such Indebtedness or to advance or supply funds
for the
payment or purchase of such Indebtedness, (ii) to purchase, sell or
lease (as
lessee or lessor) property, or to purchase or sell services,
primarily for the
10
<PAGE>
purpose of enabling the debtor to make payment of such Indebtedness
or to assure
the holder of such Indebtedness against loss, (iii) to supply funds
to or in any
other manner invest in the debtor (including any agreement to pay
for property
or services irrespective of whether such property is received or
such services
are rendered) or (iv) otherwise to assure a creditor against loss;
and
(j) all Indebtedness referred to in clauses (a) through (h)
above
secured by (or for which the holder of such Indebtedness has an
existing right,
contingent or otherwise, to be secured by) any Encumbrance on
property
(including accounts and contract rights) owned by such Person, even
though such
Person has not assumed or become liable for the payment of such
Indebtedness.
"INDEMNIFIED PARTY" means a Purchaser Indemnified Party or a
Seller
Indemnified Party, as the case may be.
"INDEMNIFYING PARTY" means Sellers pursuant to Section 9.02 and
Purchasers pursuant to Section 9.03, as the case may be.
"INTELLECTUAL PROPERTY" means any and all now known or
hereafter
known: (i) ownership rights associated with works of authorship
throughout the
world, including copyrights (including copyrights in computer
software,
including both object code and source code); (ii) trademark,
service mark and
trade name rights and similar rights, and all goodwill represented
thereby or
associated therewith, including by way of example and not
limitation, domain
name registrations; (iii) rights in any proprietary or confidential
concepts,
ideas, developments, innovations, inventions, algorithms,
techniques, designs,
processes, procedures, improvements, trade secrets, know how, show
how, and
other confidential and proprietary information (whether or not
patented or
patentable); (iv) all patents, registrations, applications,
renewals,
extensions, continuations, divisions or reissues hereof now or
hereafter in
force relating to any of (i) through (iii) (including any rights in
any of the
foregoing); (v) all other intellectual and industrial property
rights throughout
the world, whether arising by operation of Law, contract, license,
or otherwise;
and (vi) all rights to sue for past or future infringement of any
of the
foregoing.
"INTERCOMPANY INDEBTEDNESS" means Indebtedness described in clause
(b)
of the definition of the term "Indebtedness" and owed by any
Acquired Company to
any Vitro Entity as of the Closing Date (but before giving effect
to the
Closing), it being understood that in no event shall Intercompany
Payables be
deemed "Intercompany Indebtedness".
"INTERCOMPANY PAYABLES" means all accounts payable owed by any
Acquired Company to any Vitro Entity or other obligations of any
Acquired
Company to pay money to any Vitro Entity, other than Intercompany
Indebtedness,
including all Affiliate trade accounts receivable that reflect a
negative
balance, in each case outstanding as of the Closing Date (but
before giving
effect to the Closing) and as described on Exhibit 1.01-J; provided
that
"Intercompany Payables" shall not be deemed to include any amounts
payable
pursuant to this Agreement or any Ancillary Agreement.
"INTERESTED PARTY" means any Acquired Company, Seller (with respect
to
the Business) or Purchaser or any of their respective Affiliates,
or any of
their respective Representatives (with respect to the
Business).
11
<PAGE>
"INTERESTS" means, collectively, the LLC Interests, the Shares and
the
Partes Sociales.
"INVENTORY"
means inventory, merchandise, finished goods, raw
materials, packaging, labels, enamels, supplies and other personal
property
related to the Business and maintained, held or stored by or for
any of the
Acquired Companies as of the Closing Date, and any prepaid deposits
for any of
the same.
"IP ASSIGNMENT AGREEMENTS" means the IP Assignment Agreements
among
certain of the Acquired Companies and Vitro Entities, pursuant to
which the
parties thereto convey certain IT Assets and Intellectual Property
(excluding
certain interests in IT Assets and Intellectual Property subject to
the Vitro
Software License Agreement) to one another, to be dated as of the
Closing Date,
attached hereto as Exhibits 1.01-K1 and 1.01-K2.
"IT ASSETS" means, with respect to any Person, any and all of
such
Person's legal and beneficial right (including rights arising under
Contracts
and Intellectual Property rights), title and interest in and to all
software,
including modifications to software and related source code,
computer programs,
computer systems, databases (including data structures, database
routines (e.g.,
scripts, triggers, forms, SQL packages, and the like) and data
contained
therein), data rights, and documentation, reference and resource
materials
relating thereto, and associated contract rights (including license
agreements,
source code escrow agreements, support and maintenance agreements,
electronic
database access contracts, website hosting agreements, software or
website
development agreements, outsourcing agreements, service provider
agreements,
interconnection agreements, governmental permits, radio licenses,
and
telecommunications agreements).
"JUDGMENT" means any judgment, writ, order, injunction,
determination,
award, consent decree or other decree of or by any Mexican or U.S.
federal,
state or local court, judge, justice or magistrate, including any
bankruptcy
court or judge, and any order of or by a regulatory, judicial,
administrative,
or Governmental Authority.
"JV
AGREEMENTS" means, collectively, the Contracts set forth in
Exhibit 1.01-L.
"JV EFFECTIVE DATE" means August 29, 1997.
"JV STRADDLE PERIOD" means any Tax Period that includes but does
not
end on the JV Effective Date.
"LABOR
LAWS" means all applicable Laws governing or concerning labor
relations, unions and collective bargaining, terms and conditions
of employment,
employment discrimination, harassment, wages, hours or occupational
safety and
health, including the Federal Labor Law of Mexico (Ley Federal del
Trabajo), the
Social Security Act of Mexico (Ley del Seguro Social) and the
National Housing
Fund Law (Ley del Instituto del Fondo Nacional de la Vivienda para
los
Trabajadores), as such Laws have been amended or supplemented, and
the
regulations promulgated pursuant thereto.
"LANDLORD" means any lessor of Leased Real Property.
"LAW" means any Mexican, U.S. or other federal, national,
supranational, state, provincial, local or similar statute, law,
ordinance,
regulation, rule, code, order, requirement or rule of law
(including common law)
applicable to a Person.
12
<PAGE>
"LEASED REAL PROPERTY" means the real property that is related to
the
Business and that is leased by any of the Acquired Companies as
tenant, together
with, to the extent leased by any of the Acquired Companies, all
buildings and
other structures, facilities or Improvements currently or hereafter
located
thereon, all fixtures, systems, equipment and items of personal
property of any
of the Acquired Companies attached or appurtenant thereto and all
easements,
licenses, rights and appurtenances relating to the foregoing.
"LIABILITIES" means any and all Indebtedness, liabilities and
obligations, whether accrued or fixed, absolute or contingent,
matured or
inchoate, determined or determinable or reflected on a balance
sheet or
otherwise, including those arising under any Law, Action,
Governmental Order or
any judgment of any court of any kind or any award of any
arbitrator of any kind
and those arising under any Contract, arrangement, commitment or
undertaking.
"LICENSED INTELLECTUAL PROPERTY" means all Intellectual
Property
designated as such in Section 3.16(b) of the Disclosure
Schedule.
"LICENSED VITRO INTELLECTUAL PROPERTY" means all Intellectual
Property
designated as such in Section 3.16(b) of the Disclosure
Schedule.
"LLC INTERESTS" means the limited liability company membership
interests of Vitro in Crisa Industrial representing in the
aggregate 51% of the
outstanding equity interests in Crisa Industrial.
"LOSSES" means any and all actual damages, losses (including any
lost
profits or diminution in value), deficiencies, Liabilities, Taxes,
obligations,
penalties, judgments, settlements, claims, payments, fines,
interest, costs and
expenses, whether or not resulting from third party claims,
including the costs
and expenses of any and all Actions and demands, assessments,
judgments,
settlements and compromises relating thereto and the costs and
expenses of
attorneys', accountants', consultants' and other professionals'
fees and
expenses incurred in the investigation or defense thereof or the
enforcement of
rights hereunder and costs and expenses of Remediation (including,
in the case
of Remediation, all expenses and costs associated with financial
assurance), but
excluding all punitive or exemplary damages (other than punitive or
exemplary
damages awarded to any third party against an Indemnified
Party).
"M7 FURNACE" means that certain Equipment referred to as the M7
furnace located at Jose Maria Virgil No. 400, Colonia del Norte,
Monterrey, N.L.
Mexico and constructed pursuant to the Electroglass Contract.
"M7 FURNACE EFFECT"
means any effect on the business, operations,
Assets or Liabilities (including contingent Liabilities),
prospects, results of
operations or condition (financial or otherwise) of the Business,
the Business
Assets or the Acquired Companies to the extent arising or resulting
from (a) the
M7 Furnace Event or (b) the inability, or delay in the ability, of
the Acquired
Companies to use the M7 Furnace Technology in connection with the
construction,
rebuilding or operation of any furnace.
"M7
FURNACE EVENT" means (a) the defective or irregular operation
of
the M7 Furnace since its startup; (b) the failure of the M7 Furnace
to be in
compliance with any of the terms of the Electroglass Contract
(including any
specifications or performance criteria contained therein) at any
time, including
as a result of any defect in design, construction, manufacture or
technology, or
(c) any breach by Electroglass Ltd. of the Electroglass
Contract.
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<PAGE>
"M7 FURNACE TECHNOLOGY" means the electric furnace technology
utilized
in the construction of the M7 Furnace pursuant to the Electroglass
Contract or
any successor or derivative technology utilized in the M7 Furnace
or in any
subsequent furnace acquired or used by any Acquired Companies.
"MATERIAL ADVERSE EFFECT" means any circumstance, change in or
effect
on the Business or any of the Acquired Companies that is,
individually or in the
aggregate with all other circumstances, changes in or effects on
the Business or
any of the Acquired Companies, materially adverse to the business,
operations,
Assets or Liabilities (including contingent Liabilities),
prospects, results of
operations or the condition (financial or otherwise) of the
Business or the
Acquired Companies taken as a whole, including any of:
(a) the loss by the Business of any one or more customers, clients
or
distributors (other than Purchasers or any of their Affiliates)
individually or
collectively representing $20 million or more in sales of the
Business during
the prior 12-month period, except to the extent that any such loss
was caused
primarily by (i) any act or omission of any Purchaser or any of
their Affiliates
or (ii) the announcement of the Transactions;
(b) the
material disruption in the normal operation of any furnace
used in connection with the Business (other than the M7 Furnace)
for more than
seven consecutive days, except for scheduled disruptions required
to maintain or
service any furnace carried out in the ordinary course of business
consistent
with past practice;
(c) the material disruption in the normal operation of any one or
more
furnaces used in connection with the Business (other than the M7
Furnace) for
more than 10 days in the aggregate during any 30-day period, not
including
scheduled disruptions required to maintain or service any furnace
carried out in
the ordinary course of business consistent with past practice;
(d) the termination of the General Manager's employment with
any
Business Owner or the allocation of duties by any Business Owner
that restricts
in any material respects the ability of the General Manager to
perform his
duties for the Acquired Companies, unless (i) the General Manager
resigns his
employment other than for Good Reason, (ii) the General Manager is
unable, as a
result of a physical or mental disability, to perform his duties
with respect to
the Acquired Companies consistent with past practice, (iii) the
General
Manager's employment is terminated as a result of his death or (iv)
the
applicable Business Owner terminated the General Manager's
employment for Cause;
(e) the inability of the Business Owners to obtain sufficient
electricity, water, sewage services or other utilities necessary to
operate the
Business in the ordinary course consistent with past practice in
any material
respect;
(f) any material change in the ability or willingness of any
material
supplier of the Business to provide supplies necessary to operate
the Business
in the ordinary course consistent with past practice, unless (i)
the Business
Owners are able to obtain such supplies, for use by the Business,
from an
alternative source without any material increase in the cost
thereof, or (ii)
such change was caused by an act or omission of any Purchaser or
any Affiliate
of any Purchaser;
(g) any material strikes or work stoppages between any Acquired
Company and its employees;
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<PAGE>
(h) any material disruption in the operation of the Business,
including a material loss or impairment of Inventory, caused,
directly or
indirectly, by a fire in or affecting any of the facilities of the
Business,
unless all or substantially all of the Losses resulting from any
such disruption
are covered by insurance; and
(i) (i) any default occurs under the Bank Credit Agreement or
any
guaranty by Vitro or any of its Affiliates under any guaranty
executed with
respect thereto, (ii) such default is not cured within any
applicable grace or
cure period set forth therein and (iii) the lenders (or the
administrative or
collateral agent on behalf of the lenders) declare a default under
the Bank
Credit Agreement and commence the exercise of any remedies (other
than the mere
giving of notice of default) of the lenders (or the administrative
or collateral
agent on behalf of the lenders) under the Bank Credit
Agreement;
provided, however, that none of the following, either alone or in
combination,
shall be considered in determining whether there has been a
Material Adverse
Effect: (a) events, circumstances, changes or effects that
generally affect the
industries in which the Business operates (including legal and
regulatory
changes) in a manner which does not disproportionately affect the
Business or
the Business Assets; and (b) general, regional or local economic
conditions in
the markets in which the Business operates which do not
disproportionately
affect the Business or the Business Assets; and provided further
that any M7
Furnace Effect shall be disregarded in determining whether a
Material Adverse
Effect has occurred.
"MATERIAL IMPAIRMENT" means any one or more of the following: (i)
the
imposition of a Criminal Penalty or other similar consequences on
any Interested
Party with respect to the Acquired Companies or the Business; (ii)
the
imposition on any Interested Party of any fines or penalties in
excess of
$100,000 in the aggregate with respect to the Acquired Companies or
the
Business; (iii) a material and adverse effect (other than any M7
Furnace Effect)
on the ownership, use or operation of any material Business Asset;
or (iv) a
Material Adverse Effect.
"MEXICAN GAAP" means Mexican generally accepted accounting
principles
and practices in effect from time to time applied consistently
throughout the
periods involved.
"MEXICO" means the United Mexican States.
"NON-AFFILIATE" of a Person means any other Person who or which is
not
an Affiliate of such Person.
"NON-COMPETITION AGREEMENT" means the agreement in all material
respects in the form of Exhibit 1.01-M.
"OPERATING PLAN" means the operating plan of the Business, as
more
particularly described on Exhibit 1.01-N.
"ORGANIZATIONAL DOCUMENTS" means, with respect to a particular
entity,
the limited liability company agreement, limited partnership
agreement,
partnership agreement, certificate of formation, certificate of
incorporation
(acta constitutiva), bylaw (estatutos sociales) and their
amendments (reformas)
or any other similar organizational document of such entity.
"OWNED REAL PROPERTY" means the real property in which any of
the
Acquired Companies has fee title (or equivalent) interest that is
related to and
used in the Business,
15
<PAGE>
together with all buildings and other structures, facilities or
Improvements
currently or hereafter located thereon, all fixtures, systems,
equipment and
items of personal property of any of the Acquired Companies that
are related to
the Business attached or appurtenant thereto and all easements,
licenses, rights
and appurtenances relating to the foregoing.
"PARTES SOCIALES" means, collectively, the partes sociales of
(a)
Vitrocrisa designated Class II, Series "A", with a Variable Capital
value of
510.00 Mexican pesos, (b) VC Comercial designated Class II, Series
"A", with a
Variable Capital value of 510.00 Mexican pesos, (C) VC Holding
designated Class
I, Series "A", with a Fixed Capital value of 510,000.00 Mexican
pesos and (d) VC
Holding designated Class II, Series "A", with a Variable Capital
value of
13,273,076.66 Mexican pesos.
"PERMITTED ENCUMBRANCES" means the following: (a) Encumbrances
listed
in Exhibit 1.01-O1 for all purposes; (b) solely to the extent the
term
"Permitted Encumbrances" is used in limitation of any
representation or warranty
effective on the date hereof, Encumbrances listed on Exhibit
1.01-O2 (which
Encumbrances are to be removed at or prior to Closing); (c) liens
for Taxes not
yet due and payable; (d) Encumbrances imposed by Law, such as
attachments or
liens arising in the ordinary course of business securing
obligations that (i)
are not overdue for a period of more than 30 days, and (ii) are not
in excess of
$5,000 in the case of a single property or $50,000 in the aggregate
at any time;
(e) pledges or deposits to secure obligations under workers'
compensation Laws
or similar legislation or to secure public or statutory
obligations; (f)
Encumbrances of public record (other than those as to which Sellers
are required
to obtain discharges or releases pursuant to the terms of this
Agreement); (g)
zoning, building, or similar restrictions imposed by any Government
Authority;
(h) conditions that would be disclosed by an optical inspection;
(i)
Encumbrances consented to by Purchasers in writing after the date
of this
Agreement; and (j) minor survey exceptions, reciprocal easement
agreements and
other customary encumbrances on title to real property that (i)
were not
incurred in connection with any Indebtedness, (ii) do not render
title to the
property encumbered thereby unmarketable and (iii) do not,
individually or in
the aggregate, materially adversely affect the value of or the use
of such
property for its current and anticipated purposes.
"PERSON" means any individual, partnership, firm, corporation,
limited
liability company, association, trust, unincorporated organization,
joint stock
company, association, sociedad anonima de capital variable,
sociedad de
responsabilidad limitada de capital variable and any other U.S. or
non-U.S.
entity, as well as any syndicate or group that would be deemed to
be a person
under Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"PLANT C REAL PROPERTY" means the land and Improvements located
at
Doblado No. 1627 Norte, Colonia Terminal in Monterrey, Nuevo Leon,
Mexico.
"PLANT I BUILDING LEASE" means the Lease Agreement, dated February
17,
2004, between Constructora, as lessor, and FINCO, as lessee, with
respect to the
Plant I Improvements.
"PLANT I IMPROVEMENTS" means the plant, warehouse (47,288 sq.
meters),
distribution center and offices located on the Plant I Real
Property.
"PLANT I REAL PROPERTY" means the land located at Av. San Nicolas
No.
2121, Colonia Primero de Mayo, Monterrey, State of Nuevo Leon,
Mexico.
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<PAGE>
"PLANT I SECURITY DEPOSIT" means the amount of money paid by FINCO
to
Constructora as a security deposit pursuant to the Plant I Building
Lease.
"PLANT I SUBLEASE" means the Sublease Agreement, dated June 11,
2004,
between FINCO, as sublessor, and VC Comercial, as sublessee, with
respect to the
Plant I Improvements.
"PLANT I SURFACE USE RIGHT" means the right (derecho real de
superficie) granted by FINCO to Constructora pursuant to public
deed number 308
dated February 17, 2004 granted before Mr. Jorge Maldonado
Montemayor, Notary
Public No. 55 of Monterrey, Nuevo Leon, which first notarial copy
was registered
with the Registry Public of the Property and Commerce of Monterrey
under no.
1024, Vol. 164, Book 21 on March 12, 2004.
"PLANT I TITLE EXCEPTIONS" means the exceptions to good title
relating
to the Plant I Real Property set forth on Section 3.08(a)(i) of the
Disclosure
Schedule.
"POST-CLOSING TAX PERIOD" means any Tax Period beginning after
the
Closing Date and that portion of any Straddle Period beginning
after the Closing
Date.
"POST-EMPLOYMENT BENEFITS" means any pension benefit or
seniority
premium arising out of or relating to any individual's employment
with any
Acquired Company prior to the Closing Date.
"POST-JV TAX PERIOD" means any Tax Period beginning after the
JV
Effective Date and that portion of any JV Straddle Period beginning
after the JV
Effective Date.
"PRE-CLOSING TAX PERIOD" means any Tax Period ending on or before
the
Closing Date and that portion of any Straddle Period ending on the
Closing Date.
"PRE-JV TAX PERIOD" means any Tax Period ending on or before the
JV
Effective Date and that portion of any JV Straddle Period ending on
the JV
Effective Date.
"PROSPECTIVE OBLIGATIONS" means, in respect of any Contract,
obligations arising or accruing from or after the Closing.
"PURCHASE PRICE BANK ACCOUNT" means a bank account in the U.S. to
be
designated by Sellers in a written notice to Purchasers at least
five Business
Days before the Closing.
"RACKS AND CONVEYORS" means the Equipment used by the Acquired
Companies at the Plant I Real Property as of the date of this
Agreement and
identified in Exhibit 1.01-P.
"REAL PROPERTY LEASES" means the leases for Leased Real
Property
described in Section 3.17(b) of the Disclosure Schedule.
"RECEIVABLES" means any and all accounts receivable, notes and
other
amounts receivable from any Person (other than any Acquired
Company), including
customers and employees, arising from the conduct of the Business
before the
Closing, whether or not in the ordinary course, together with any
unpaid
financing charges accrued thereon.
17
<PAGE>
"REFERENCE BALANCE SHEET" means, collectively, (i) the audited
combined balance sheet of VC Holding and Subsidiaries (including
Taller de
Coleccion but excluding Crisa Industrial) and Crisa Libbey as of
December 31,
2005, prepared in accordance with Mexican GAAP and (ii) the
unaudited balance
sheet of Crisa Industrial as of December 31, 2005, prepared in
accordance with
Mexican GAAP.
"REFERENCE DATE" means December 31, 2005.
"REFERENCE INTERCOMPANY PAYABLES AMOUNT" means $17,836,606,
which
amount was determined, for clarification, by subtracting the amount
of the
Forgiven Payables ($2,500,000) from the amount of Intercompany
Payables in
existence on December 31, 2005 ($20,336,606).
"REIMBURSABLE LIABILITIES" means any and all Liabilities,
whether
arising before, at or after the Closing Date, of Sellers or any of
their
predecessor companies or businesses, or any of their Affiliates,
Subsidiaries or
divisions, or any other Person, relating to, resulting from or
arising out of
(a) the present, past or future operations or conduct, or the
ownership or use,
of the Excluded Business (other than Taller de Coleccion during the
period
between the JV Effective Date and the Closing Date), or (b) the
ownership or use
of any Assets (other than (i) the Business Assets, or (ii) any
Excluded Assets
constituting part of Taller de Coleccion during the period between
the JV
Effective Date and the Closing Date) owned or used by Vitro and its
Affiliates.
"Reimbursable Liabilities" also includes all Liabilities or Losses
assumed or
agreed to be performed, paid or reimbursed by Sellers pursuant to
this Agreement
or any of the Ancillary Agreements, and all Liabilities relating
to, resulting
from, pursuant to or arising out of or in connection with:
(a) Contracts not relating exclusively to the Business or any
Business
Assets (other than Shared Contracts), but only to the extent such
Contracts do
not relate to the Business;
(b) any warranty, performance and similar obligations entered into
or
incurred in the course of business of, or related to, the Excluded
Business with
respect to its products or services;
(c) Actions to the extent related to, resulting from or arising
in
connection with the Excluded Business or the ownership or use of
the Excluded
Assets other than Actions related to, resulting from or arising in
connection
with Taller de Coleccion or the operation of the Excluded Assets
constituting
part of Taller de Coleccion between the JV Effective Date and the
Closing Date;
(d) Sellers' portion, determined pursuant to Section 5.08, of
Shared
Contractual Liabilities;
(e) allocations of Shared Liabilities to Sellers pursuant to
Section
5.09;
(f) Taxes (including Transfer Taxes) for which any Vitro Entity
is
liable pursuant to Article VII or applicable Law (provided,
however, in the
event of any conflict between the provisions of Article VII and
applicable Law,
the provisions of Article VII shall control);
18
<PAGE>
(g) all Indebtedness of the Vitro Entities (other than Indebtedness
of
any Acquired Company, including any guaranty or other assurance of
the payment
of any such Indebtedness granted by any Vitro Entities);
(h) any Losses incurred by any Acquired Company after the Closing
Date
arising out of the Gamma Warehouse Litigation;
(i) any profit sharing payments made by Libbey Inc. (or any of
its
Affiliates) to Crisa Corp. in excess of the subsequently determined
amount due
resulting from the correction of a pricing error on an original
invoice or the
return, rejection or claim for losses by the applicable customer
for products
upon which a profit sharing payment has been made prior to or on
the Closing
Date;
(j) Post-Employment Benefits payable to Former Business
Employees;
(k) any Contract with the General Manager or any other Business
Employee that provides for the vesting of any rights in the General
Manager or
other Business Employee, as the case may be, upon consummation of
the
Transactions;
(l) the
resignation of the General Manager and the Excluded Employees
as employees of any of the Acquired Companies on or prior to the
Closing Date,
as contemplated by this Agreement;
(m) any prepayment premiums or other prepayment penalties charged
by
the holders of Indebtedness of the Business who or which are
Non-Affiliates of
any Party that is prepaid at the Closing;
(n) any Losses (including any Losses arising from a failure to
pay
applicable employer employee quotas payable to the Mexican
Institute of Social
Security or the National Fund of Housing Institute and Savings for
Retirement
Fund System) incurred by any Purchaser Indemnified Party arising
out of any
individual who carried out professional duties with respect to the
Business
purportedly as an independent commission agent (comisionistas
independientes)
prior to the Closing being deemed to have been a Business
Employee;
(o) any Losses incurred by any Purchaser Indemnified Party
arising
from any (i) Third Party Claim alleging personal bodily injury or
anticipated
bodily injury suffered by a third party in whole or in part caused
by a
manufacturing or design defect of any product manufactured,
distributed or sold
by any Acquired Company between the JV Effective Date and the
Closing Date or
(ii) Remedial Action, to the extent undertaken due to a
manufacturing or design
defect of any product manufactured, distributed or sold by any
Acquired Company
between the JV Effective Date and the Closing Date;
(p) (i) any Losses arising out of any Environmental Condition
relating
to, resulting from or arising with respect to the manufacture,
production or
supply of any Taller de Coleccion product between the JV Effective
Date and the
Closing Date and (ii) any Losses arising out of any Environmental
Condition
relating to, resulting from or arising with respect to the
manufacture,
production or supply of any Taller de Coleccion product following
the Closing
Date;
(q) any Losses arising from any of the following events and
circumstances, to the extent that they occurred at any time between
the JV
Effective Date and the Closing Date:
19
<PAGE>
(i) any pollution, contamination or Release that violates, or
requires
remediation under, any applicable Law, the source of which was any
activity of
any Acquired Company or any property owned, leased (including the
Plant I Real
Property), used or operated by it; (ii) any storage or treatment of
dangerous or
toxic wastes or substances on land owned, leased (including the
Plant I Real
Property), used or operated by any of the Acquired Companies in a
manner that
violates applicable Law; (iii) any disposal, shipment or
transportation of any
dangerous or toxic wastes or substances by any of the Acquired
Companies or at
the direction of any of the Acquired Companies in a manner that
violates
applicable Law; and (iv) any failure of any of the Acquired
Companies to obtain,
maintain in full force for the operation of the Business, submit
timely renewal
applications for and comply with all required Environmental
Permits;
(r) any Losses incurred by any Purchaser Indemnified Party after
the
Closing Date arising from any Action set forth in Section 3.13 of
the Disclosure
Schedule (but not including (i) the Gamma Warehouse Litigation and
(ii) items
1.a., 1.b., 1.c., 2.a., 3.a., 3.b., 4.a., and 8. on Schedule
3.13);
(s) wages, claims, severance and Post-Employment Benefits for
Excluded
Employees;
(t) the foreign trade (comercio exterior) contingencies set forth
on
Item 8 of Section 3.09 of the Disclosure Schedule;
(u) the Plant I Title Exceptions;
(v) unless and until Sellers deliver to Purchasers the
Constructora
Resolution Document, whether before, on or after the Closing Date,
any Losses
incurred by any Purchaser Indemnified Party arising if, upon
expiration of the
Plant I Surface Use Right, title to and ownership of the Plant I
Improvements
does not revert to the then-current owner of fee title to the Plant
I Real
Property upon a de minimis payment by such owner to Constructora or
its
successors or assigns in exchange; and
(w) any and all fines or other penalties imposed on any of the
Acquired Companies relating to Item 10 in Section 3.13 of the
Disclosure
Schedule (and any Losses incurred by any Purchaser Indemnified
Party in
connection with the defense or appeal of any proceeding or
investigation related
thereto).
"RELEASE" means disposing, discharging, injecting, spilling,
leaking,
leaching, dumping, emitting, escaping, emptying, seeping,
migrating, placing and
the like into or upon any land or water or air or otherwise
entering into the
Environment.
"REMEDIAL ACTION" means any course of action initiated or taken by
any
Acquired Company to protect the health, safety and welfare of any
individual who
has purchased any product manufactured, distributed or sold by any
Acquired
Company between the JV Effective Date and the Closing Date.
"REMEDIATION" means an action of any kind to address, correct
or
respond to an Environmental Condition or to otherwise comply with
Environmental
Laws, including the following activities: (i) monitoring,
investigation,
assessment, treatment, cleanup, containment, removal, mitigation,
response or
restoration work; (ii) responding to any notice, claim, cause of
action, order,
action or investigation by any Person alleging potential liability
for property
damage (including claims for interference with use and diminution
in value) or
death or injury to
20
<PAGE>
Persons; (iii) negotiating with or obtaining any permits, consents,
approvals or
authorizations from any Governmental Authority or government entity
necessary to
conduct any such activity; (iv) preparing and implementing any
plans or studies
for any such activity; (v) actions necessary to obtain a written
notice from a
Governmental Authority or government entity with jurisdiction over
the real
property at an off-site location under Environmental Laws that no
material
additional work is required by such Governmental Authority or
governmental
entity; (vi) the use, implementation, application, installation,
operation or
maintenance or removal actions on the real property or an off-site
location,
remedial technologies applied to the surface or subsurface soils,
excavation and
treatment or disposal of soils at an off-site location, systems for
long-term
treatment of surface water or groundwater, replacement, removal or
encapsulation
of friable or damaged asbestos-containing materials, engineering
controls or
institutional controls; (vii) the design, acquisition and
installation of
pollution control equipment required under Environmental Laws; and
(viii) any
other activities reasonably determined to be necessary or
appropriate or
required under Environmental Laws to address an Environmental
Condition or to
avoid Liabilities under such Environmental Laws or under this
Agreement.
"REPRESENTATIVE" of a Person means such Person's members,
directors,
controlling Persons, officers, employees, agents, recipients of
authority
granted pursuant to a power of attorney, partners and advisors
(including
attorneys, accountants, auditors, consultants, bankers, financial
advisors and
prospective sources of financing for the Transactions), as
applicable.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLERS' KNOWLEDGE" or similar terms used in this Agreement mean
the
actual knowledge of any of Enrique Santos, Hector Pulido, Ricardo
Mena, Claudio
del Valle, Carlos Mattei, Javier Arechavaleta, Arturo Lozano,
Fabrice Serfati,
Rafael Colome, Jose Salazar, Hector Pro, Angel Vela, Mario Guzman,
Roberto Rubio
Barnes, Alvaro Rodriguez, Javier Ruelas Lopez, Jose Antonio Perez
Vara,
Alejandro Garcia Fernandez, Salvador Minarro Villalobos, Ramiro
Garza Guerrero
and Raul Garza Samano.
"SHARED ASSETS" means the Assets used in the operation of both (a)
the
Business and (b) the Excluded Business, all of which are set forth
on Exhibit
1.01-Q.
"SHARED BOOKS AND RECORDS" means the Books and Records used in
the
operation of both (a) the Business and (b) the Excluded
Business.
"SHARED CONTRACTUAL LIABILITIES" means Liabilities in respect
of
Shared Contracts.
"SHARED CONTRACTS" means Contracts between Vitro and any of its
Affiliates, on the one hand, and one or more third parties, on the
other hand,
that directly benefit both any Acquired Company and any other
businesses
conducted by Vitro or its Affiliates, all of which are set forth on
Section
3.20(b)(i) of the Disclosure Schedule.
"SHARED LIABILITY THIRD PARTY CLAIMS" means any and all Third
Party
Claims that might give rise to a claim for Loss by any Purchaser
Indemnified
Party other than Losses with respect to which all Purchaser
Indemnified Parties
are entitled to 100% indemnification from Sellers under Article
IX.
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<PAGE>
"SHARED SUPPLY CONTRACTS" means Shared Contracts that relate to
the
purchase of supplies or materials used in the Business providing
for payments in
excess of $10,000 over a 12-month period.
"SHARES" means 25,500 shares of Crisa Libbey Class I, Series "A"
fixed
capital stock.
"STOCK OPTION PLAN" means any option plan created for certain
Persons,
including Business Employees, to purchase shares of capital stock
of Vitro, S.A.
de C.V.
"STRADDLE PERIOD" means any Tax Period that includes but does not
end
on the Closing Date.
"SUBSIDIARY" means, with respect to any Person, any and all
corporations, partnerships, limited liability companies, joint
ventures, joint
stock companies, trusts, unincorporated organizations,
associations, sociedades
anonimas de capital variable, sociedades de responsabilidad
limitada de capital
variable and other U.S. and non-U.S. entities controlled by such
Person.
"SUBSTITUTION AGREEMENT" means a substitution agreement (convenio
de
substitucion) in all material respects in the form of Exhibit
1.01-R.
"TAXES" means any and all taxes, charges, duties, fees, levies,
tariffs, imposts and other charges of any kind (together with any
and all
interest, penalties or additions associated therewith) imposed by
any
Governmental Authority, including taxes or other charges on or with
respect to
income (Impuesto Sobre la Renta), assets (Impuesto al Activo),
franchises,
capital stock, real property (including Impuesto Predial and
Contribuciones por
Mejoras), personal property, tangible, employment, payroll,
windfall or social
security quotas (contribuciones al Instituto Mexicano del Seguro
Social), social
contribution, unemployment compensation, retirement fund quotas
(contribuciones
al Sistema de Ahorro para el Retiro), employee profit sharing
(participacion de
los trabajadores en las utilidades), disability, transfer, sales,
use, excise,
gross receipts, National Workers' Housing Fund Institute Quotas
(contribuciones
al Infonavit) and value added tax (Impuesto al Valor Agregado);
taxes imposed or
levied on the use and exploitation of public domain natural
resources or for
public services, including water dues (Pagos de Derechos); taxes or
other
charges in the nature of excise, withholding, ad valorem, stamp,
transfer or
gains taxes; license, registration and documentation fees; customs
duties,
tariffs and similar charges; and all other taxes of any kind for
which the
Acquired Companies may have any liability imposed by any
Governmental Authority,
whether disputed or not, and any charges, interest or penalties
imposed by any
Governmental Authority in connection therewith; and shall include
any Liability
for the Taxes of any other Person under Law (including as a
transferee or
successor), by Contract, or otherwise.
"TAX PERIOD" means any period prescribed by any Governmental
Authority
for which a Tax Return is required to be filed or a Tax (other than
any
estimated, installment or similar interim Tax payment) is required
to be paid.
"TAX RETURN" means any report, return (including any
information
return), claim for refund, election, estimated Tax filing or
payment, request
for extension, document, declaration or other information or filing
required to
be supplied to any Governmental Authority with respect to Taxes,
including
attachments thereto and amendments thereof.
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<PAGE>
"TERMINATION AND RELEASE AGREEMENT" means the Limited Termination
and
Release Agreement, to be dated as of the Closing Date, in all
material respects
in the form of Exhibit 1.01-S.
"TRACTEBEL AND IBERDROLA CONTRACTS" means that certain Amended
and
Restated Agreement for Provision of Electrical Power Generation
Capacity and
Associated Electrical Energy, dated December 15, 1999, between
Vitro Corporativo
(as agent for the Capacity Users), Enron Energia Industrial de
Mexico, S. de
R.L. de C.V., and the Capacity Users named therein, and that
certain Electric
Energy Supply Agreement, dated March 28, 2003, between Iberdrola
Energia
Monterrey, S.A. de C.V., Vitrocrisa and Vidriera Monterrey, S.A. de
C.V.
"TRANSACTIONS" means the transactions contemplated by this
Agreement
and the Ancillary Agreements.
"TRANSFER TAXES" shall mean any and all transfer, documentary,
sales,
use, gross receipts, stamp, registration and value added Taxes and
recording,
escrow and other similar Taxes and fees (including recording,
notarial and
escrow fees and any real property or leasehold interest transfer or
gains tax
and any similar Tax).
"TRANSITION SERVICES AGREEMENTS" means Transition Services
Agreements,
each (a) among one or more Acquired Companies, on the one hand, and
one or more
Vitro Entities, on the other hand, providing services thereunder
and (b) to be
dated as of the Closing Date, in form and substance to be agreed
upon pursuant
to Section 5.17.
"U.S." means United States of America.
"U.S. GAAP" means U.S. generally accepted accounting principles
and
practices in effect from time to time applied consistently
throughout the
periods involved.
"VENDORS" means any and all vendors who are unaffiliated with
the
Business Owners and who or which supply raw materials, components,
spare parts,
supplies, goods, merchandise or services to the Business
Owners.
"VITRO BOARD" means the board of directors of Vitro.
"VITRO CLUB" means the athletic club that Vitro maintains in
Monterrey, Mexico for use by employees of Vitro and its
Affiliates.
"VITRO ENTITIES" means Sellers and their Affiliates (other than
the
Acquired Companies).
"VITRO GUARANTEES" means all obligations of the Vitro Entities
under
any loan, financing, lease, Contract or other obligation set forth
on Exhibit
1.01-T and in existence as of the Closing Date for which any Vitro
Entity is or
may be liable, as guarantor, original tenant, primary obligor,
Person required
to provide financial support in any form whatsoever, or otherwise
(including by
reason of performance guarantees) to the extent relating to the
Business, but in
any case excluding obligations under any Shared Contracts.
"VITRO SOFTWARE LICENSE AGREEMENT" means the Vitro Software
License
Agreement among the Acquired Companies and Vitro Corporativo, S.A.
de C.V., to
be dated as of the Closing Date, in all material respects in the
form of Exhibit
1.01-U.
23
<PAGE>
SECTION 1.02. Definitions. The following terms have the meanings
set
forth in the Sections set forth below:
<TABLE>
<CAPTION>
Definition
Location
----------
--------
<S>
<C>
"ACQUIRED COMPANIES".........................................
Preamble
"AGREEMENT"..................................................
Preamble
"APPLICABLE CLOSING DATE"....................................
6.01
"COMBINED TAX RETURNS".......................................
7.01(a)
"CONFIDENTIALITY AGREEMENT"..................................
5.03(a)
"CONTEST"....................................................
7.03(b)
"CONTINUING EMPLOYEES".......................................
6.01
"CRISA CORP".................................................
Preamble
"CRISA INDUSTRIAL"...........................................
Preamble
"CRISA INDUSTRIAL FINANCIAL STATEMENTS"......................
3.07(a)
"CRISA LIBBEY"...............................................
Preamble
"DISPUTED PAYABLES"..........................................
5.12(d)
"EMPLOYEE BENEFIT PLANS".....................................
3.18(a)
"ESCROW AGREEMENT"...........................................
2.06
"EXCLUDED EMPLOYEES".........................................
5.21(a)
"EXISTING STOCK".............................................
5.05(b)
"FINANCIAL STATEMENTS".......................................
3.07(a)
"FORGIVEN PAYABLES"..........................................
5.12(c)
"FULLY INDEMNIFIED THIRD PARTY CLAIMS".......................
9.05(b)
"INDEMNIFICATION THRESHOLD"..................................
9.04(b)(i)
"INTERNATIONAL TRADE LAWS"...................................
3.15(c)
"LGA3".......................................................
Preamble
"LIBBEY EUROPE"..............................................
Preamble
"LIBBEY MEXICO"..............................................
Preamble
"MATERIAL CONTRACTS".........................................
3.20(a)
"MIRRORED SHARED CONTRACTS"..................................
5.08(b)
"OUTSIDE CLOSING DATE"......................................
10.01(c)
"PARTIES"....................................................
Recitals
"PAYEE PARTY"................................................
5.08(c)
"PAYOR PARTY"................................................
5.08(c)
"PENSION PLAN"...............................................
3.18(d)
"PER DIEM TAXES".............................................
9.07(c)(i)
"PERMITS"....................................................
3.15(d)
"PURCHASE PRICE".............................................
2.02(a)
"PURCHASER INDEMNIFIED PARTY"................................
9.02
"PURCHASER PROPOSED ALTERNATIVE ACTION"......................
5.01(b)(xxxi)
"PURCHASERS".................................................
Preamble
"RESTRICTED PERIOD"..........................................
5.14(a)
"RETAINED NAMES AND MARKS"...................................
5.05(a)
"SELLER INDEMNIFIED PARTY"...................................
9.03
"SELLER PROPOSED ALTERNATIVE ACTION".........................
5.01(b)(xxxi)
"SELLER REPRESENTATIVE"......................................
11.13(a)
"SELLERS"....................................................
Preamble
"SELLERS' BROKER"............................................
3.24
"SELLERS' MIRRORED SHARED CONTRACT FEES".....................
5.08(b)
"SET-OFF AMOUNT".............................................
9.06(b)
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Definition
Location
----------
--------
<S>
<C>
"SHARED LIABILITY"...........................................
5.09
"SOFIVSA"
5.01(b)(xiv)
"SPECIFIED PRODUCTS".........................................
5.14(a)
"SUPPLEMENTAL ASSETS"........................................
3.08(e)
"SUPPLEMENTAL LIABILITIES"...................................
3.08(e)
"TAX CLAIM"..................................................
9.07(e)
"TERMINATION DATE"...........................................
5.04(b)
"TERMINATION FEE"............................................
10.03(c)
"THIRD PARTY CLAIM"..........................................
9.05(b)
"TRANSFERRED EMPLOYEES"......................................
6.03
"VC COMERCIAL"...............................................
Preamble
"VC HOLDING".................................................
Preamble
"VITRO"......................................................
Preamble
"VITROCRISA".................................................
Preamble
"WATSON WYATT REPORT"........................................
3.18(d)
</TABLE>
SECTION 1.03. Interpretation and Rules of Construction. In this
Agreement, except to the extent otherwise provided or that the
context otherwise
requires:
(a) when a reference is made in this Agreement to an Article,
Section,
Exhibit or Schedule, such reference is to an Article or Section of,
or an
Exhibit or Schedule to, this Agreement unless otherwise
indicated;
(b) the table of contents and headings for this Agreement are
for
reference purposes only and do not affect in any way the meaning
or
interpretation of this Agreement;
(c) whenever the words "include," "includes" or "including" are
used
in this Agreement, they are deemed to be followed by the words
"without
limitation";
(d) the definitions contained in this Agreement are applicable to
the
singular as well as the plural forms of such terms;
(e) references to a Person are also to its successors and
permitted
assigns; and
(f) the use of "or" is not intended to be exclusive unless
expressly
indicated otherwise.
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale. Upon the terms and subject to
the
conditions of this Agreement, at the Closing, Sellers shall sell,
assign,
transfer, convey and deliver to Purchasers the Interests, free and
clear of all
Encumbrances, and Purchasers shall purchase the Interests and the
covenants
contained in Section 5.14 and the Non-Competition Agreement, all in
such
proportions as set forth in Exhibit 2.01. The LLC Interests will be
sold,
assigned, transferred, conveyed and delivered pursuant to the
Assignment and
Amendment Agreement.
25
<PAGE>
SECTION 2.02. Purchase Price. (a) The purchase price for the
Interests and the covenants contained in Section 5.14 and the
Non-Competition
Agreement shall be $80,000,000 (the "PURCHASE PRICE").
(b) Prior to the Closing, the Parties shall agree on a
reasonable
allocation of the Purchase Price among the Interests and the
covenants contained
in Section 5.14 and the Non-Competition Agreement in accordance
with Exhibit
2.02(b).
SECTION 2.03. Closing. Subject to the terms and conditions of
this
Agreement, the Closing shall be held (a) at the offices of Latham
& Watkins LLP,
233 South Wacker Drive, Chicago, Illinois at 10:00 a.m. central
time on the
fifth Business Day following the satisfaction or waiver of all of
the conditions
to the obligations of the Parties set forth in Sections 8.01 and
8.02, or (b) at
such other place or at such other time or on such other date as
Sellers and
Purchasers may mutually agree.
SECTION 2.04. Closing Deliveries by Sellers. At the Closing,
Sellers
shall deliver or cause to be delivered to Purchasers:
(a) stock certificates evidencing the Shares duly endorsed in
property
(endoso en propiedad);
(b) executed counterparts of each Ancillary Agreement to which any
of
the Business Owners is a party;
(c) a receipt for the Purchase Price, less the Escrow Amount;
(d) a certificate duly executed by the Secretary or an
Assistant
Secretary of each Seller, dated as of the Closing Date, certifying
(i) as to the
incumbency of the persons executing this Agreement and the
Ancillary Agreements
on such Seller's behalf, (ii) that attached to such certificate is
a complete
and correct copy of resolutions that have been duly and validly
adopted by the
board of directors of such Seller evidencing the authorization of
the execution
and delivery of this Agreement and each Ancillary Agreement to
which such Seller
is a party and the consummation of the Transactions, together with
a statement
to the effect that such resolutions are in full force and effect on
the Closing
Date, (iii) in the case of the certificate delivered by the
Secretary or an
Assistant Secretary of Vitro, that attached to such certificate is
a copy of
each Acquired Company's Organizational Documents that are in effect
on the
Closing Date; and (iv) in the case of the certificate delivered by
the Secretary
or an Assistant Secretary of Vitro, that attached to such
certificate is a copy
of each Acquired Company's special registry of partners (registro
especial de
socios), in each case duly reflecting the transfer of the
applicable Partes
Sociales in accordance with Exhibit 2.01, stock record book
(registro de
acciones), minute book (libro de actas), libro de variaciones de
capital and
libro especial de socios, as applicable;
(e) the resignations, effective as of the Closing, of all of
the
directors (or, in the case of Crisa Industrial, the managers) of
the Acquired
Companies, Roberto Rubio Barnes and the Excluded Employees, each in
form and
substance reasonably acceptable to Purchasers; provided that the
resignation of
Roberto Rubio Barnes shall be in all material respects in the form
of Exhibit
2.04(e);
(f) non-Encumbrance certificates (certificados de libertad de
gravamenes) of each Acquired Company issued by the Public Registry
of Commerce
of each of the Acquired
26
<PAGE>
Company's domicile, within 20 Business Days prior to Closing, as to
the absence
of Encumbrances (other than Permitted Encumbrances) on the Owned
Real Property
and the personal property of the Acquired Companies;
(g) written confirmation that is reasonably acceptable to
Purchasers
that the Acquired Companies are in possession of all, or have
delivered to
Purchasers, originals and copies of all their notarial deeds
(testimonios
notariales), and of all official public instruments and documents
relating to
Business Assets;
(h) an Assignment and Assumption Agreement, pursuant to which
Vitro
assigns and transfers to VC Holding (or such other of the Acquired
Companies as
Purchasers may designate), free and clear of all Encumbrances other
than
Permitted Encumbrances, all right, title and interest of Vitro, as
successor by
merger to FINCO, in and to the Plant I Building Lease and the Plant
I Sublease;
(i) a Bill of Sale pursuant to which FACUSA conveys and transfers
to
VC Comercial, free and clear of all Encumbrances other than
Permitted
Encumbrances, all right, title and interest of FACUSA and the other
Vitro
Entities in and to the Racks and Conveyors;
(j) the Constructora Resolution Document, if any;
(k) original Notarial Instrument (escritura publica) issued by
a
notary public in Mexico, containing an irrevocable power of
attorney granted by
the Seller Representative in favor of CT Corporation System for the
purposes
referred to in Section 11.11(b), in all material respects in the
form of Exhibit
2.04(k);
(l) Sellers' notification, if any, pursuant to Section 5.06;
(m) a Bill of Sale pursuant to which VC Comercial conveys and
transfers to Vitro Corporativo, S.A. de C.V. or any Affiliate of
Vitro
Corporativo, S.A. de C.V., as directed by Vitro, all right, title
and interest
of VC Comercial and the other Acquired Companies in and to the
Assets,
Liabilities and business of Taller de Coleccion; and
(n) a complete and correct list of the Business Employees as of a
date
within four Business Days prior to the Closing Date, including such
employees'
names, employee numbers and the salaries or hourly rates paid to
such employees.
SECTION 2.05. Closing Deliveries by Purchasers. At the Closing,
Purchasers shall deliver or cause to be delivered to:
(a) Sellers, the Purchase Price, less the Escrow Amount, by
wire
transfer in immediately available funds (which shall be deemed to
be paid in
cash) to the Purchase Price Bank Account;
(b) Sellers, an amount equal to the amount of the Plant I
Security
Deposit, by wire transfer in immediately available funds (which
shall be deemed
to be paid in cash) to the Purchase Price Bank Account;
(c) the applicable Vitro Entities by the Acquired Companies, an
amount
equal to all Intercompany Indebtedness, including all accrued and
unpaid
interest thereon, by wire transfer in immediately available funds
(which shall
be deemed to be paid in cash) to such
27
<PAGE>
account or accounts designated by the applicable Vitro Entities in
writing
delivered to Purchasers prior to the Closing Date;
(d) Vitro, an amount equal to 100% of the Accounting Dividend Tax,
by
wire transfer in immediately available funds (which shall be deemed
to be paid
in cash) to such account or accounts designated by Vitro in writing
delivered to
Purchasers prior to the Closing Date;
(e) the Escrow Agent, an amount equal to the Escrow Amount, by
wire
transfer in immediately available funds to the account designated
therefor in
the Escrow Agreement;
(f) Seller Representative, executed counterparts of each
Ancillary
Agreement to which any of Purchasers and their Affiliates is a
party;
(g) Seller Representative, a certificate duly executed by the
Secretary or an Assistant Secretary of each Purchaser, dated as of
the Closing
Date, certifying (i) as to the incumbency of the persons executing
this
Agreement and the Ancillary Agreements on such Purchaser's behalf,
(ii) that
attached to such certificate is a complete and correct copy of
resolutions that
have been duly and validly adopted by the board of directors of
such Purchaser
evidencing the authorization of the execution and delivery of this
Agreement and
each Ancillary Agreement to which such Purchaser is a party and the
consummation
of the Transactions, together with a statement to the effect that
such
resolutions are in full force and effect on the Closing Date;
and
(h) Purchasers' notification, if any, pursuant to Section 5.06.
SECTION 2.06. Escrow (a). Prior to the Closing, the Parties
shall
enter into a guaranty trust (fideicomiso de garantia) with the
Escrow Agent in
all material respects in the form of Exhibit 2.06 (the "ESCROW
AGREEMENT"). In
accordance with the terms of the Escrow Agreement, Purchasers shall
deliver the
Escrow Amount to the Escrow Agent to be held in trust, managed and
paid out by
the Escrow Agent in accordance with the terms of the Escrow
Agreement.
Purchasers shall be responsible for paying all fees charged and
other costs
incurred by the Escrow Agent pursuant to the Escrow Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLERS
Sellers jointly and severally represent and warrant to Purchasers
the
truth and accuracy of the following as of the date hereof and as of
the Closing
(except to the extent any of the following representations and
warranties are as
of a specified date, in which case such representations and
warranties shall be
true and correct as of that date):
SECTION 3.01. Organization, Authority and Qualification of
Sellers.
Each Seller is duly organized, validly existing and in good
standing under the
Laws of the jurisdiction of its incorporation or formation and,
subject to the
satisfaction of the condition set forth in Section 8.01(k) of this
Agreement,
has all necessary power and authority to enter into this Agreement
and the
Ancillary Agreements, to carry out its obligations hereunder and
thereunder and
to consummate the Transactions. Each Seller (other than Vitro) is a
direct or
indirect wholly-
28
<PAGE>
owned subsidiary of Vitro. The execution and delivery of this
Agreement and the
Ancillary Agreements by the respective Sellers, the performance by
Sellers of
their respective obligations hereunder and thereunder and, subject
to the
satisfaction of the condition set forth in Section 8.01(k) of this
Agreement,
the consummation by Sellers of the Transactions have been duly
authorized by all
requisite action on the part of Sellers and their respective equity
holders.
This Agreement has been, and upon their execution the Ancillary
Agreements to
which the respective Sellers are party shall have been, duly
executed and
delivered by the respective Sellers, and (assuming due
authorization, execution
and delivery by the other Parties) this Agreement constitutes, and
upon their
execution the Ancillary Agreements to which the respective Sellers
are party
shall constitute, legal, valid and binding obligations of Sellers,
enforceable
against Sellers in accordance with the respective terms of such
agreements.
SECTION 3.02. Organization, Authority and Qualification of the
Acquired Companies. Each Acquired Company is an entity duly
organized, validly
existing and in good standing under the Laws of the jurisdiction of
its
formation, which is listed in Section 3.02 of the Disclosure
Schedule, and has
all necessary power and authority to own, operate or lease the
properties and
Assets now owned, operated or leased by it and to carry on the
Business as it
has been and is currently conducted. Sellers have delivered to
Purchasers true
and correct copies of the Organizational Documents of each Acquired
Company,
each as in effect on the date hereof.
SECTION 3.03. Capitalization. (a) The authorized, issued and
outstanding shares of capital stock of, or other equity interests
in, each
Acquired Company are set forth in Section 3.03 of the Disclosure
Schedule. All
of the issued and outstanding shares of capital stock of, or other
equity
interests in, the Acquired Companies are validly issued, fully paid
and
nonassessable. None of the Interests was issued in violation of any
preemptive
rights. Other than the JV Agreements, there are no options,
warrants,
convertible securities or other rights, agreements, arrangements or
commitments
of any character relating to the Interests or obligating any Seller
or Acquired
Company to issue or sell any Interests or any other shares of
capital stock, or
any other interest in, any Acquired Company. There are no
outstanding
contractual obligations of any Acquired Company to repurchase,
redeem or
otherwise acquire any shares of capital stock or other equity
interests, or make
any investment (in the form of a loan, capital contribution or
otherwise) in,
any other Person. When taken together with the shares of capital
stock of, and
other equity interests in, the Acquired Companies owned of record
by Affiliates
of Purchasers, the Interests constitute all of the issued and
outstanding equity
interests in the Acquired Companies and are owned of record and
beneficially by
the respective Sellers, as set forth in Section 3.03 of the
Disclosure Schedule,
free and clear of all Encumbrances except for those provided for in
the Bylaws
and the JV Agreement. Upon consummation of the Transactions and
registration of
the Interests in the name of the applicable Purchasers in the stock
record books
(registros de acciones) and special registry of partners (registro
especial de
socios), as applicable, of the Acquired Companies, Purchasers,
assuming they
shall have purchased the Interests for value in good faith and
without notice of
any adverse claim, will own all the issued and outstanding equity
interests in
the Acquired Companies free and clear of all Encumbrances. Upon
consummation of
the Transactions, the Interests will be fully paid and
nonassessable. There are
no voting trusts, stockholder agreements, proxies or other
agreements or
understandings in effect with respect to the voting or transfer of
any of the
Interests other than the JV Agreements.
(b) The registros de acciones, registro especial de socios or
equivalent Books and Records, as applicable, of each Acquired
Company accurately
records: (i) the name and address of each Person owning Interests
and each
Affiliate of Purchasers who owns shares
29
<PAGE>
of capital stock in the applicable Acquired Company and (ii) the
certificate
number of each certificate evidencing shares of capital stock
issued by such
Acquired Company, the number of shares evidenced by each such
certificate, the
date of issuance thereof and, in the case of cancellation, the date
of
cancellation.
SECTION 3.04. Subsidiaries. Except as set forth in Section 3.04 of
the
Disclosure Schedule, none of the Acquired Companies has any
Subsidiaries, and no
Acquired Company owns, of record or beneficially, any direct or
indirect equity
or other interest, or any right (contingent or otherwise) to
acquire the same,
in any Person, except that Vitrocrisa and VC Comercial are
Subsidiaries of VC
Holding. Except as set forth in Section 3.04 of the Disclosure
Schedule, none of
the Acquired Companies is a partner or member of any partnership or
limited
liability company or a participant in any joint venture or similar
arrangement.
SECTION 3.05. No Conflict. Subject to receipt of the approvals
or
authorizations contemplated by Section 3.06 below, the execution,
delivery and
performance of this Agreement and the Ancillary Agreements by
Sellers and the
Acquired Companies do not and will not (a) violate, conflict with
or result in
the breach of the Organizational Documents of the respective
Sellers or any
Acquired Company, or (b) conflict with or violate any Law or
Governmental Order
applicable to the respective Sellers and Acquired Companies, except
as would not
(i) adversely affect the ability of Sellers to carry out their
respective
obligations under this Agreement and the Ancillary Agreements and
to consummate
the Transactions or (ii) adversely affect the ability of the
Acquired Companies
to conduct the Business. Subject to either receipt of the consent
of the holders
of the Bank Debt or the payment, at Closing, by the Acquired
Companies of the
outstanding principal balance, and all accrued and unpaid interest,
late fees,
and prepayment premiums owing with respect to the Bank Debt, and
except as
otherwise set forth in Section 3.05 of the Disclosure Schedule, the
execution,
delivery and performance of this Agreement and the Ancillary
Agreements by
Sellers and the Acquired Companies do not and will not conflict
with, result in
any breach of, constitute a default (or event which, with the
giving of notice
or lapse of time, or both, would become a default) under, require
any consent
under, give rise to any Encumbrances, or give to others any
purchase rights or
rights of first refusal, termination, acceleration or cancellation
of, any note,
bond, mortgage or indenture, Contract, lease, sublease, license,
permit,
franchise or other instrument or arrangement to which the
respective Sellers or
Acquired Companies are party or by which their respective Assets or
properties
are bound, except as would not (i) adversely affect the ability of
Sellers to
carry out their respective obligations under this Agreement and the
Ancillary
Agreements and to consummate the Transactions or (ii) adversely
affect the
ability of the Acquired Companies to conduct the Business from and
after the
Closing.
SECTION 3.06. Governmental Consents and Approvals. The
execution,
delivery and performance of this Agreement and each Ancillary
Agreement by the
respective Sellers do not and will not require any consent,
approval,
authorization or other order of, action by, filing with or
notification to, any
Governmental Authority, except (a) required filings under the
Securities
Exchange Act of 1934, as amended, or the securities market laws of
Mexico (Ley
del Mercado de Valores), (b) the prior approval of the Mexican
Foreign
Investment Commission, and (c) clearance from the Mexican Federal
Competition
Commission.
SECTION 3.07. Financial Information; Books of Account. (a)
Sellers
have delivered to Purchasers true and complete copies in all
material respects
of (i) the audited combined balance sheets of VC Holding and
Subsidiaries and
Crisa Libbey, excluding Crisa Industrial for each of the fiscal
years ended as
of December 31, 2003, December 31, 2004 and December 31, 2005, and
the related
audited combined statements of operations, changes in
30
<PAGE>
stockholders' equity and cash flows, together with all related
notes and
schedules thereto, accompanied by the reports thereon of Deloitte
(collectively,
the "FINANCIAL STATEMENTS"), and (ii) the unaudited balance sheet
of Crisa
Industrial for each of the fiscal years ended as of December 31,
2003, December
31, 2004 and December 31, 2005, and the related unaudited
consolidated income
statements and statements of cash flow of Crisa Industrial (the
"CRISA
INDUSTRIAL FINANCIAL STATEMENTS"). The Financial Statements and the
Crisa
Industrial Financial Statements (i) were prepared in accordance
with the books
of account and other financial records of the Acquired Companies in
all material
respects, (ii) present fairly the combined financial condition and
results of
operations of the Acquired Companies as of the dates thereof or for
the periods
covered thereby, (iii) have been prepared in accordance with U.S.
GAAP (except
that the Crisa Industrial Financial Statements have been prepared
in accordance
with Mexican GAAP), applied on a basis consistent with the past
practices of the
Acquired Companies, except, in the case of the Crisa Industrial
Financial
Statements, for the absence of notes thereto, and (iv) include all
adjustments
(consisting only of normal recurring year-end accruals) that are
necessary for a
fair presentation of the combined financial condition of the
Acquired Companies
and the results of the operations of the Acquired Companies as of
the dates
thereof or for the periods covered thereby (except, in the case of
the Crisa
Industrial Financial Statements, for the absence of notes
thereto).
(b) The books of account and other financial records of the
Acquired
Companies: (i) reflect all items of income and expense and all
Assets and
Liabilities required to be reflected therein in accordance with
Mexican GAAP or
U.S. GAAP, as applicable, applied on a basis consistent with the
past practices
of the Acquired Companies, (ii) are in all material respects
complete and
correct, and do not contain or reflect any material inaccuracies
or
discrepancies, (iii) have been maintained in accordance with good
business and
accounting practices and (iv) reflect all items of income and
expense, and all
assets used or expended, and liabilities incurred, in the operation
of the
Business.
SECTION 3.08. Sufficiency of Assets. (a) Each Acquired Company
owns and has good title to all material tangible personal property
reflected on
its books as owned by it, and FACUSA owns and has good title to the
Racks and
Conveyors, in each case free and clear of all Encumbrances, subject
to Permitted
Encumbrances. Except as set forth in Section 3.08(a)(i) of the
Disclosure
Schedule, the Acquired Companies will have good title to all
Supplemental Assets
as of the Closing Date, subject to Permitted Encumbrances. Except
as set forth
on Section 3.08(a)(ii) of the Disclosure Schedule, to Sellers'
Knowledge the
material tangible personal property of the Acquired Companies,
taken as a whole,
is in good operating condition and repair, ordinary wear and tear
excepted. To
Sellers' Knowledge, except as set forth in Section 3.08(a)(iii) of
the
Disclosure Schedule, there are no facts or conditions affecting the
Business
Assets that could, individually or in the aggregate, interfere in
any respect
with the Acquired Company's use, occupancy or operation thereof as
currently
used, occupied or operated, or their adequacy for such use.
(b) Except as set forth in Section 3.08(b) of the Disclosure
Schedule,
the Assets currently owned or leased by the Acquired Companies,
together with
the Supplemental Assets and all other Assets or services the
benefits of which
are to be provided to the Acquired Companies pursuant to the
Ancillary
Agreements (but excluding the Assets of Taller de Coleccion),
constitute all of
the Assets required to operate the Business in the manner in which
it is
currently conducted and in which it has been conducted over the
preceding 12
months in all material respects.
31
<PAGE>
(c) Except as set forth in Section 3.08(c) of the Disclosure
Schedule,
the Business has been conducted only through the Acquired
Companies. Neither
Vitro nor any of its Subsidiaries has any direct or indirect
equity, joint
venture or other interest in any Person conducting the Business,
other than
Sellers and the Acquired Companies.
(d) Except as set forth in Section 3.08(d) of the Disclosure
Schedule,
each of the Acquired Companies is engaged in no business or
activities of any
kind other than the Business.
(e) Section 3.08(e) of the Disclosure Schedule sets forth a
complete
and correct list of the Business Assets and Crisa Liabilities that
are not as of
the date hereof Assets or Liabilities, as applicable, of any
Acquired Company
(the "SUPPLEMENTAL ASSETS" and "SUPPLEMENTAL LIABILITIES",
respectively),
together with the name of each Vitro Entity that holds each such
Asset and
Liability as of the date hereof.
SECTION 3.09. Absence of Undisclosed Liabilities. The Acquired
Companies have no outstanding Liabilities with respect to the
Business, other
than (i) Liabilities that are listed or reserved against on the
Financial
Statements or the Crisa Industrial Financial Statements, (ii)
Liabilities that
are set forth in Section 3.09 of the Disclosure Schedule or (iii)
Liabilities
that are not required under U.S. GAAP or Mexican GAAP, as
applicable, to be
listed or reserved against on the Financial Statements or the Crisa
Industrial
Financial Statements, as applicable, and that do not and could not
reasonably be
expected to result, individually or in the aggregate, in a Loss to
the Acquired
Companies in an amount in excess of $2,000,000. Reserves are
reflected on the
Reference Balance Sheet against all Liabilities of the Business,
other than
Liabilities relating to the Excluded Business and Reimbursable
Liabilities, in
amounts that have been established on a basis consistent with the
past practices
of the Acquired Companies and in accordance with U.S. GAAP or
Mexican GAAP, as
the case may be.
SECTION 3.10. Receivables. Section 3.10 of the Disclosure Schedule
is
an aged list of the Receivables as of January 31, 2006 showing
separately those
Receivables that as of such date (a) are within the stated payment
terms of the
applicable Acquired Company to its respective customers, (b) are
past due by
between 0 and 30 days, (c) are past due by between 31 and 60 days,
(d) are past
due by between 61 and 90 days, (e) are past due by between 91 and
180 days and
(f) are past due by more than 180 days. Except to the extent, if
any, reserved
for on the Reference Balance Sheet, all Receivables reflected on
the Reference
Balance Sheet arose from, and the Receivables existing as of the
Closing will
have arisen from, the sale of Inventory or services to any Persons
and in the
ordinary course of business consistent with past practice and,
except as
reserved against on the Reference Balance Sheet, constitute or will
constitute,
as the case may be, only valid, undisputed claims of the Acquired
Companies not
subject to valid claims of setoff or other defenses or
counterclaims other than
those arising in the ordinary course of business consistent with
past practice.
SECTION 3.11. Inventories. Except as set forth in Section 3.11 of
the
Disclosure Schedule, the Acquired Companies have good and
marketable title to
the Inventories owned by them free and clear of all Encumbrances,
except
Permitted Encumbrances. Except as set forth in Section 3.11 of the
Disclosure
Schedule, the Inventories do not consist of any items held on
consignment. None
of the Acquired Companies is under any obligation or liability with
respect to
accepting returns of items of Inventory or merchandise in the
possession of
their customers other than in the ordinary course of business
consistent with
past practice. Except as set forth in Section 3.11 of the
Disclosure Schedule,
no clearance or extraordinary sale of the Inventories has been
conducted since
the Reference Date. Section 3.11 of the Disclosure
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Schedule is a complete and correct list of the addresses of all
warehouses,
outlet stores and other facilities in which the Inventories are
located. At
December 31, 2005 and at Closing there were and will be no material
differences
between the quantities of Inventory recorded in the Business Books
and Records
and the actual physical quantities on hand.
SECTION 3.12. Conduct in the Ordinary Course. Since the
Reference
Date, except as set forth in Section 3.12 of the Disclosure
Schedule:
(a) the Business has been conducted in the ordinary course and
there
has not occurred any event, circumstance or fact that, individually
or in the
aggregate, has had or could reasonably be expected to have a
Material
Impairment; and
(b) none of the Business Owners has taken (or agreed to take,
except
as contemplated by this Agreement and the Ancillary Agreements) any
action that,
if taken after the date hereof, would constitute a violation of
clauses (iii),
(iv), (vii), (viii), (ix), (xi), (xiii), (xiv), (xix), (xx), (xxiv)
and (xxv) of
Section 5.01(b).
SECTION 3.13. Litigation. Except as set forth in Section 3.13 of
the
Disclosure Schedule, (a) no Business Owner is engaged in or a party
to or, to
Sellers' Knowledge, during the past three years has been threatened
with, any
Action related to any Acquired Company or the Business; (b) no
Vitro Entity is
engaged in or a party to or, to Sellers' Knowledge, during the past
three years
has been threatened with, any Action arising from the alleged
failure by any
Vitro Entity to fulfill its obligations under any Shared Contract;
(c) to
Seller's Knowledge, during the past three years no Business Owner
has received
written notice that any investigation has been threatened or is
contemplated by
any Governmental Authority with respect to the Acquired Companies
or the
Business; (d) no Business Owner has become subject to any Judgment
that
restricts operation of the Business as it is currently conducted or
as
contemplated by the Operating Plan or that restricts the legality,
validity or
enforceability of this Agreement, any Ancillary Agreement or the
consummation of
the Transactions; (e) there is no Action, charge, investigation or
arbitration
or other method of settling disputes, by or before any Governmental
Authority,
which questions the validity of this Agreement or any action taken
or to be
taken by a Business Owner in connection with the Transactions or
the Operating
Plan; and (f) there are no unpaid monetary Judgments relating to
the Business.
SECTION 3.14. Compliance with Laws. (a) To Sellers' Knowledge,
except as set forth in Section 3.14 of the Disclosure Schedule each
of the
Acquired Companies is, and for the past three years has been, in
compliance in
all material respects with all Laws applicable to the Business or
the Business
Assets, except to the extent that the failure to so comply could
not be
reasonably expected to result in a Material Impairment. To Sellers'
Knowledge,
no Acquired Company has in the past three years conducted any
internal
investigation concerning any actual or alleged material violation
of any Law on
the part of any Acquired Companies or any of their respective
officers,
directors, employees, agents or representatives in connection with
the conduct
of the Business.
(b) To Sellers' Knowledge, no Acquired Companies or any of the
respective directors, officers, agents, employees, representatives
or any other
individual or entity to whom or which any of the Acquired Companies
has granted
a power of attorney in accordance with Mexican law (in their
capacities as such)
of any Acquired Company has: (i) used any funds that are in any
manner related
to the Business for unlawful contributions, gifts, entertainment or
other
unlawful expenses relating to political activity; (ii) directly or
indirectly
paid or delivered any fee, commission or other sum of money or item
of property,
however characterized, to any
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finder, agent or other party acting on behalf of or under the
auspices of a
governmental official or Governmental Authority, in the U.S.,
Mexico or any
other country, which is in any manner related to the Business, that
was illegal
under any applicable Law; (iii) made any payment to any customer or
supplier of
the Business, or to any officer, director, partner, employee or
agent of any
such customer or supplier, for the unlawful sharing of fees to any
such customer
or supplier or any such officer, director, partner, employee or
agent for the
unlawful rebating of charges; or (iv) engaged in any other unlawful
reciprocal
practice, or made any unlawful payment or given any other unlawful
consideration
to any such customer or supplier or any such officer, director,
partner,
employee or agent, in respect of the Business.
(c) To Sellers' Knowledge, no Acquired Companies or any of
their
respective directors, officers, agents, employees, representatives
or any other
individual or entity to whom or which any of the Acquired Companies
has granted
a power of attorney in accordance with Mexican law (in their
capacities as
such), have, in the past three years, taken any action or made any
omission in
violation of, or that may cause the Business, the Business Assets
or the
Acquired Companies to be in violation of, any applicable Law
governing imports
into or exports from the United States or any other country, or
relating to
economic sanctions or embargoes, corrupt practices, money
laundering, or
compliance with unsanctioned foreign boycotts, including the Arms
Export Control
Act, the Trading with the Enemy Act, the International Emergency
Economic Powers
Act, the Export Administration Act, the 1930 Tariff Act and other
U.S. customs
Laws, the Foreign Corrupt Practices Act, the Export Administration
Regulations,
the International Traffic in Arms Regulations, the Office of
Foreign Assets
Control Regulations, the U.S. Customs Regulations, or any
regulation, ruling,
rule, order, decision, writ, judgment, injunction, or decree of any
Governmental
Authority issued pursuant thereto (collectively, the "INTERNATIONAL
TRADE
LAWS"), except to the extent such violation could not be reasonably
expected to
result in a Material Impairment. Notwithstanding the foregoing,
Purchasers
acknowledge that the Acquired Companies have sold merchandise and
made shipments
to customers within Cuba and that, if applicable to the Acquired
Companies,
these shipments may violate the U.S. embargo on trade with Cuba. To
Sellers'
Knowledge, in the past three years none of the Business, the
Business Assets,
the Acquired Companies or the Business Employees is or has been the
subject of
any investigation, complaint, claim, or charge of any violation of
the
International Trade Laws by any Governmental Authority.
(d) Section 3.14(d) of the Disclosure Schedule sets forth all
permits,
registrations, licenses, approvals, consents and authorizations,
including all
Environmental Permits, of any Governmental Authority the absence or
loss of
which, or violation of or breach or default under which,
individually or in the
aggregate, could reasonably be expected to result in a Material
Impairment (the
"PERMITS"). Section 3.14(d) also sets forth the identity of the
Persons who hold
such Permits. Except as set forth in Section 3.14(d) of the
Disclosure Schedule,
to Sellers' Knowledge, the Permits are all Permits required in
order to operate
the Business in the ordinary course consistent with past practices,
except to
the extent the absence of any such Permit could not be reasonably
expected to
result in a Material Impairment. To the extent that Section 3.14(d)
of the
Disclosure Schedule discloses that any Permits are held by Persons
other than
the Acquired Companies, Sellers will cause the holder(s) of such
Permits to
transfer such Permits to the Acquired Companies at the Closing,
and, to the
extent that the consent of any Governmental Authority is required
for such
transfer, Sellers will cause the holder to obtain such consents
prior to the
Closing. Except as disclosed in Section 3.14(d) of the Disclosure
Schedule, to
Sellers' Knowledge the Acquired Companies are in compliance with
the terms of
the Permits, such Permits are in full force and effect, and none of
the Business
Owners has received any written notice from any Governmental
Authority
challenging, revoking, materially modifying or refusing to renew
any Permit, in
each case except to the extent such failures and
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notices, individually and in the aggregate, would not reasonably be
expected to
result in a Material Impairment.
SECTION 3.15. Environmental Matters. Except as set forth in
Section
3.15 of the Disclosure Schedule, to Sellers' Knowledge:
(a) The Business is and has been at all times during the past
five
years in compliance in all material respects with all applicable
Environmental
Laws.
(b) None of the Acquired Companies (or, with respect to the Plant
I
Real Property, Vitro) has received notice from any Governmental
Authority or any
third party of actual or threatened Liability (with respect to any
Business Real
Property or otherwise for which an Acquired Company may be subject)
under any
Environmental Laws, and there are no facts, circumstances or
Environmental
Defects that could reasonably form the basis for the assertion of
any material
claim against any Acquired Company (or, with respect to the Plant I
Real
Property, Vitro) under any Environmental Laws with respect to any
Business Real
Property (including the Plant I Real Property) or otherwise be a
Liability for
which an Acquired Company may be subject.
(c) No Acquired Company is subject to any consent decree or order,
and
no Acquired Company is subject to any material judgment, decree or
judicial or
administrative order relating to compliance with any applicable
Environmental
Law, or to the cleanup of Hazardous Materials.
(d) There have been no Releases of Hazardous Materials
requiring
Remediation under any Environmental Laws by the Acquired Companies
(or, with
respect to the Plant I Real Property, Vitro) or by any other Person
at, on, in,
under, over or in any way affecting any Business Real Property
(including the
Plant I Real Property).
(e) None of the Acquired Companies (or, with respect to the Plant
I
Real Property, Vitro) has been subject to any material
administrative or
judicial proceeding pursuant to applicable Environmental Law or has
paid any
fines, penalties or assessments within the last five years with
respect to
environmental matters pertaining to the Business.
(f) The Acquired Companies (and, with respect to the Plant I
Real
Property, Vitro) have filed all notices, registrations, reports or
other filings
necessary to maintain compliance in all material respects with all
Environmental
Laws applicable to the Business.
(g) None of the Business Real Property and the Equipment of the
Business contains any Hazardous Materials, asbestos, regulated
polychlorinated
biphenyls, underground storage tanks, solid waste disposal areas,
associated
piping or pipelines, open or closed pits, sumps or other
underground containers.
(h) Sellers have previously provided to Purchasers correct and
complete copies of all files of the Business relating to all
matters associated
with the operations of the Business that are regulated by any
Environmental Law
or otherwise relating to environmental matters, including any
environmental
assessments or reports of prior environmental assessments of any
Business
operations, facilities and properties or with respect to the
Business Real
Property.
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<PAGE>
SECTION 3.16. Intellectual Property. (a) Section 3.16(a) of the
Disclosure Schedule sets forth a complete and correct list of all
unexpired
patents (including without limitation design and utility patents)
and patent
applications, registered trademarks, trademark applications, domain
name
registrations, material unregistered trademarks, registered
copyrights,
copyright applications and material unregistered copyrights owned
by the
Acquired Companies and used in the conduct of the Business as of
the date hereof
or at any time during the preceding 12 months and setting forth, as
to each such
item, as applicable, the date of application, registration or
issuance and the
jurisdiction in which such item is registered, issued or
pending.
(b) Section 3.16(b) of the Disclosure Schedule sets forth a
complete
and correct list of all Intellectual Property used in the Business
pursuant to a
written license, written consent, written permission or similar
written
agreement, but excluding COTS Licenses.
(c) Except as set forth in Section 3.16(c) of the Disclosure
Schedule:
(i) the Acquired Companies own or have the right to use the
material Intellectual Property used in the Business free and clear
of
all liens, claims and encumbrances (other than Permitted
Encumbrances)
including claims of joint owners, joint inventors or joint
authors;
(ii) none of the Business Owners or, to Sellers' Knowledge, any
other party, is in breach of or in default under any material
agreement or understanding pertaining to the Licensed
Intellectual
Property or any other material agreement by which the Business
Owners
use the Intellectual Property of any third party in the Business,
and
each such license or agreement is now and following the Closing
shall
be valid and in full force and effect;
(iii) the operation of the Business, including the design,
development, use, import, manufacture and sale of the products,
technology or services of the Business, does not materially
infringe,
dilute, misappropriate or otherwise violate the Intellectual
Property
of any third party, and no claim has been made, notice given,
or
dispute arisen to that effect;
(iv) the Business Owners have no pending claim(s) that any
third
party has infringed, misappropriated or otherwise violated any of
the
Business Intellectual Property, and, to Sellers' Knowledge, there
is
no basis for any such claim; and
(v) to Sellers' Knowledge, none of the Acquired Companies and
their respective employees, directors, officers, contractors or
agents
has (A) misappropriated, materially misused or improperly
disclosed
the material trade secrets or confidential or proprietary
information
of any person, or (B) disclosed any material trade secret or
confidential or proprietary information of the Business except to
the
extent such disclosure was necessary to the operation of the
Business
and made pursuant to an appropriate confidentiality agreement
binding
upon the recipient of such trade secrets or confidential
information
of the Business.
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<PAGE>
SECTION 3.17. Business Real Property. (a) (a) Section 3.17(a) of
the
Disclosure Schedule lists the street address and/or legal
description of each
parcel of Owned Real Property.
(b) Section 3.17(b) of the Disclosure Schedule lists: (i) the
street
address of each parcel of Leased Real Property, and (ii) the
identity of the
Landlord, lessee and current occupant (if different from the
lessee) of each
such parcel of Leased Real Property.
(c) Except as described in Section 3.17(c)(i) of the Disclosure
Schedule, to Sellers' Knowledge there is no material violation of
any Law
(including any building, planning or zoning Law) relating to any of
the Business
Real Property. Except as described in Section 3.17(c)(ii) of the
Disclosure
Schedule, Sellers have made available to Purchasers true, legible
and complete
copies of each public deed (escritura publica) for each parcel of
Owned Real
Property and all related title insurance policies, title reports,
surveys,
certificates of occupancy, environmental reports and audits,
appraisals and
permits that are in the Business Owners' possession or reasonably
under their
control. Except as set forth in Section 3.17(c)(iii) of the
Disclosure Schedule,
the Acquired Companies are in peaceful and undisturbed possession
of each parcel
of Business Real Property, and there are no contractual or legal
restrictions
that preclude the ability to use the Business Real Property for the
purposes for
which it is currently being used in any material respect. Except as
set forth in
Section 3.17(c)(iv) of the Disclosure Schedule, all existing water,
sewer,
steam, gas, electricity, telephone, Internet access and other
similar utilities
required for the occupancy, operation and maintenance of the
Business Real
Property are adequate for the conduct of the Business as currently
conducted in
all material respects. To Sellers' Knowledge, except as set forth
in Section
3.17(c)(v) of the Disclosure Schedule, there are no material latent
defects or
material adverse physical conditions affecting the Business Real
Property or any
of the facilities, buildings, structures, erections, improvements,
fixtures,
fixed assets and personalty of a permanent nature annexed, affixed
or attached
to, located on or forming part of the Business Real Property.
Except as set
forth in Section 3.17(c)(vi) of the Disclosure Schedule, none of
the Acquired
Companies has leased or subleased any parcel or any portion of any
parcel of
Business Real Property to any other Person, and no other Person has
any rights
to the use, occupancy or enjoyment thereof pursuant to any lease,
sublease,
license, occupancy or other agreement, nor has any Acquired Company
assigned its
interest under any lease or sublease listed in Section 3.17(b) of
the Disclosure
Schedule to any third party.
(d) Section 3.17(d) of the Disclosure Schedule sets forth a
complete
and correct list of all leases and subleases relating to the
Business Real
Property and any and all ancillary documents pertaining thereto
(including all
amendments, modifications, supplements, exhibits, schedules,
addenda and
restatements thereto and thereof and all consents, including
consents for
alterations, assignments and sublets, documents recording
variations, memoranda
of lease, options, rights of expansion, extension, first refusal
and first offer
and evidence of commencement dates and expiration dates). With
respect to each
of such leases and subleases, none of the Acquired Companies has
exercised or
given any notice of exercise, and no Landlord has exercised or
given any notice
of exercise of, any option, right of first offer or right of first
refusal
contained in any such lease or sublease, including any such option
or right
pertaining to purchase, expansion, renewal, extension or
relocation.
(e) Except as set forth in Section 3.17(e) of the Disclosure
Schedule,
(i) Vitro owns fee title to the Plant I Real Property; (ii) Vitro
is the holder
of the leasehold interest under the Plant I Building Lease and is
the sublessor
under the Plant I Sublease; (iii) Vitro's interests with respect to
the Plant I
Real Property, the Plant I Improvements, the Plant I Building
Lease
37
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and the Plant I Sublease are free and clear of all Encumbrances
other than
Permitted Encumbrances and, with respect to the Plant I Real
Property, the
interest of Constructora under the Plant I Surface Use Right and
(iv) the amount
of the Plant I Security Deposit is $125,000.
(f) Except as disclosed in Section 3.17(f) of the Disclosure
Schedule,
to Sellers' Knowledge: (i) Constructora has complied with all of
its obligations
under the Plant I Building Lease; (ii) Vitro has paid to
Constructora all
amounts required to be paid by Vitro under the Plant I Building
Lease and is not
otherwise in default under the Plant I Building Lease; (iii) VC
Comercial has
paid to Vitro all amounts required to be paid by VC Comercial under
the Plant I
Sublease and is not otherwise in default under the Sublease; and
(iv) Vitro has
the right to assign and convey to Vitrocrisa or such other entity
as Purchasers
shall designate the Plant I Real Property and all right, title and
interest of
Vitro under the Plant I Building Lease and the Plant I
Sublease.
(g) There are no condemnation proceedings or eminent domain
proceedings of any kind pending or, to Sellers' Knowledge,
threatened against
the Business Real Property.
(h) All the Business Real Property is occupied under a valid
and
current certificate of occupancy or similar permit. The
Transactions will not
require the issuance of any new or amended certificate of
occupancy, and, to
Sellers' Knowledge, there are no facts that would prevent the
Business Real
Property from being occupied by any of the Acquired Companies after
the Closing
in the same manner as occupied by the Acquired Companies
immediately prior to
the Closing.
SECTION 3.18. Employee Benefit Matters. (a) Section 3.18 of the
Disclosure Schedule lists each compensatory arrangement (other than
salary and
wages), bonus, pension, retirement, health, life, disability,
employee discount,
severance and fringe benefits provided or made available to the
Business
Employees by the Acquired Companies, other than as required by Law
or through a
governmental program (the "EMPLOYEE BENEFIT PLANS").
(b) Sellers have provided to Purchasers true, complete and
accurate
copies of all Employee Benefit Plans that are written, and have
provided an
accurate description of all unwritten Employee Benefit Plans.
(c) Each Employee Benefit Plan is, and has been, established,
registered (where required), qualified, administered, funded (where
required)
and invested in compliance in all material respects with the terms
thereof and
all applicable Laws. With respect to each Employee Benefit Plan,
all required
filings and reports have been made in a timely and complete manner
with all
governmental authorities in all material respects. All obligations
of Sellers or
any Affiliates of Sellers or under the Employee Benefit Plans
(whether pursuant
to the terms thereof or any applicable Laws) have been satisfied in
all material
respects, and there are no outstanding material defaults or
violations
thereunder by any Seller or any Acquired Company. Full payment has
been made in
a timely manner of all amounts that are required to be made as
contributions,
payments or premiums to or in respect of any Employee Benefit Plan
under
applicable Law or under any Employee Benefit Plan or any agreement
relating to a
Employee Benefit Plan, and no Taxes, penalties or fees are owing or
assessable
under any such Employee Benefit Plan. Except as set forth in
Section 3.18(c) of
the Disclosure Schedule, to Sellers' Knowledge, no event has
occurred with
respect to any registered Employee Benefit Plan that would result
in the
revocation of the registration of such Employee Benefit Plan, or
that would
entitle any person (without the consent of the sponsor of such
Employee Benefit
Plan) to wind up or terminate any such Employee Benefit Plan, in
whole or in
part, or could otherwise
38
<PAGE>
reasonably be expected to have an adverse effect on the Tax status
of any such
Employee Benefit Plan. Except for accrued liabilities under the
Pension Plan,
there are no going-concern unfunded actuarial liabilities, past
service unfunded
liabilities or solvency deficiencies with respect to any of the
Employee Benefit
Plans. No contribution holidays have been taken under any of the
Employee
Benefit Plans, and there have been no withdrawals of assets or
transfers of
assets from any Employee Benefit Plan, except in accordance with
applicable
Laws.
(d) Without limiting the representations in Section 3.18(b) and
(c),
Section 3.18(d) of the Disclosure Schedule contains (or, in the
case of clause
(iii), will contain at Closing) true and correct copies of (i) the
Plan de
Pensiones en Beneficio del Personal de Vitro, S.A. de C.V y
empresas
subsidiarias (the "PENSION PLAN"); (ii) the most recent analysis of
the costs of
the Pension Plan; (iii) the most recent actuarial assessment of the
Pension Plan
prepared by Watson Wyatt Mexico (the "WATSON WYATT REPORT"). All
documents and
materials, and the information contained or reflected therein,
provided by any
Business Owner to Watson Wyatt Mexico for purposes of preparing the
Watson Wyatt
Report were, as of their respective dates, true and correct in all
material
respects.
(e) All of the Business Employees have been duly registered with
the
Mexican Institute of Social Security, and the National Fund of
Housing Institute
and Savings for Retirement Fund System considering their real
salary and
position.
(f) Except as set forth in Section 3.18(f) of the Disclosure
Schedule,
none of the Acquired Companies is delinquent in the payment of
employer employee
quotas payable to the Mexican Institute of Social Security or the
National Fund
of Housing Institute and Savings for Retirement Fund System. There
are no
pending or, to Sellers' Knowledge, threatened administrative
proceedings
involving payments by any of the Acquired Companies to the Mexican
Institute of
Social Security or the National Fund of Housing Institute and
Savings for
Retirement Fund System.
SECTION 3.19. Taxes.
(a) Except as set forth in Section 3.19(a) of the Disclosure
Schedule,
all Tax Returns required to be filed by or with respect to each
Acquired Company
have been timely filed with the appropriate Governmental Authority,
and all such
Tax Returns are complete and accurate in all material respects.
(b) Except as set forth in Section 3.19(b) of the Disclosure
Schedule,
each Acquired Company has timely paid or made provision for the
payment of all
Taxes that have or may become due (whether or not shown or
reportable on any Tax
Return) with respect to Pre-Closing Tax Periods. As of December 31,
2005, the
unpaid Taxes of each Acquired Company did not exceed the accruals
and reserves
for Taxes (other than any reserve for deferred Taxes established to
reflect
timing differences between book and Tax income) set forth on the
face of the
Reference Balance Sheet (rather than in any notes thereto). Since
the Reference
Date, none of the Acquired Companies has incurred any Liability for
Taxes
outside the ordinary course of business or otherwise inconsistent
with past
custom and practice.
(c) All Taxes each Acquired Company is or was required by Law
to
withhold or collect have been duly withheld or collected and, to
the extent
required, have been timely paid to the proper Governmental
Authority.
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(d) Except as set forth in Section 3.19(d) of the Disclosure
Schedule,
there are no liens for Taxes (other than for current Taxes not yet
due and
payable) upon any assets of the Acquired Companies.
(e) Except as set forth in Schedule 3.19(e) of the Disclosure
Schedule, no deficiencies for Taxes or other assessments relating
to Taxes have
been threatened, claimed, proposed or assessed by any Governmental
Authority
against any Acquired Company. There are no audits, investigations,
claims or
other administrative or judicial proceedings in progress, pending
or threatened
relating to any Liability for Taxes of an Acquired Company, and
there are no
matters under discussion with any Governmental Authority with
respect to Taxes
of an Acquired Company. No claim has been made by any Governmental
Authority in
a jurisdiction where an Acquired Company does not file Tax Returns
that such
Acquired Company may be subject to taxation in that
jurisdiction.
(f) Except as set forth in Section 3.19(f) of the Disclosure
Schedule,
no Acquired Company will be required to recognize for Tax purposes
in a
Post-Closing Tax Period any income or gain which would otherwise
have been
required to be recognized under the accrual method of accounting in
a
Pre-Closing Tax Period as a result of any Seller or Acquired
Company making a
change in method of accounting or otherwise deferring the
recognition of income
or gain to a Post-Closing Tax Period as a result of the accounting
method used
in a Pre-Closing Tax Period.
(g) None of the Acquired Companies, any Seller or any of their
Affiliates has requested or received any ruling from any
Governmental Authority,
or signed any binding agreement with any Governmental Authority
(including any
advance pricing agreement), that would impact the amount of Tax
Liability of an
Acquired Company after the Closing Date.
(h) There are no Tax sharing, indemnity, allocation or similar
Contracts in effect as between any Acquired Company (or any
predecessors
thereof) and any other party. No Acquired Company has any
contractual
obligations to indemnify any other Person with respect to
Taxes.
SECTION 3.20. Material Contracts. (a) Except as set forth on
Section
3.16, Section 3.17, Section 3.18, Section 3.20, or Section 3.25 of
the
Disclosure Schedule, no Acquired Company is a party to or bound by,
and none of
the Business Assets are bound by, any Contract of the types
described below (the
"MATERIAL CONTRACTS"):
(i) collective bargaining agreements;
(ii) employment, management or consulting Contracts providing
for
(x) annual payment in excess of $50,000, or (y) rights
conditioned
upon assignment, change in control or other transactions similar
to
the Transactions;
(iii) Contracts that provide, whether under a plan or
otherwise,
for bonuses, pensions, options, stock purchases, deferred
compensation, retirement payments, profit sharing, or the like;
(iv) indentures, mortgages, notes, installment obligations,
Contracts, or other instruments, in each case relating to
Indebtedness
in an amount greater than $50,000 individually or $100,000 in
the
aggregate;
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(v) all guaranties, direct or indirect, by a Business Owner of
any obligation of any Person for borrowings or lease
obligations,
excluding endorsements made for collection in the ordinary course
of
business;
(vi) partnership, joint venture, alliance or other similar
Contracts;
(vii) licenses or similar agreements regarding material
Intellectual Property, whether as licensee or licensor, other
than
COTS Licenses;
(viii) agency, sales representation, distribution or other
similar Contracts providing for annual payments in excess of
$50,000;
(ix) Contracts for the purchase of supplies or materials other
than in the ordinary course of business consistent with past
practice
or providing for payments in excess of $50,000 over a 12-month
period;
(x) Contracts for the sale of any Business Assets or services
other than in the ordinary course of business consistent with
past
practice, or the grant of any preferential rights to purchase or
lease
any Business Assets, each for Business Assets valued in excess
of
$50,000 or providing for payments in excess of $50,000 over a
12-month
period;
(xi) Contracts for the sale of any Business Assets or services
in
the ordinary course of business consistent with past practice
for
Business Assets valued in excess of $250,000;
(xii) Contracts (other than the JV Agreements) that limit or
purport to limit the ability of the Acquired Companies to compete
in
any line of business or with any Person or in any geographic area
or
during any period of time;
(xiii) Contracts between or among, on the one hand, any of the
Acquired Companies and, on the other hand, any of Vitro and its
Affiliates (other than the Acquired Companies);
(xiv) Contracts relating to the acquisition of all or
substantially all of the Assets or stock of another business,
corporation or other Person, whether by merger, consolidation, sale
or
other transfer;
(xv) leases for tangible personal property involving annual
payments in excess of $50,000;
(xvi) Contracts for the sale or purchase of real property;
(xvii) material Contracts (other than those described in clause
(xxiv) below) entered into other than in the ordinary course of
business consistent with past practice;
(xviii) "requirements" Contracts or any Contracts committing a
Person to provide the quantity of goods or services required by
another Person;
(xix) Contracts with "take or pay" provisions;
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(xx) joint marketing, manufacturing, or research and
development,
or other alliance Contracts;
(xxi) material insurance Contracts;
(xxii) Contracts not made in the ordinary course of business
involving an estimated total future payment or payments in excess
of
$50,000;
(xxiii) Contracts, other than those described in the preceding
clauses (i) through (xxii), involving total annual payments in
excess
of $100,000 with respect to one Contract or $200,000 in the
aggregate;
and
(xxiv) all other Contracts, whether or not made in the ordinary
course of business, which are material to any Acquired Company or
the
conduct of the Business, or the absence of which would cause, or
would
be reasonably likely to cause, a Material Impairment.
(b) Section 3.20(b)(i) of the Disclosure Schedule sets forth a
complete and accurate list of all Shared Contracts. Section
3.20(b)(ii) of the
Disclosure Schedule sets forth a complete and accurate description
of all of the
material terms of all oral Contracts that satisfy Section
3.20(a)(xiii).
(c) Except as set forth on Section 3.20(c)(i) of the Disclosure
Schedule, Sellers have delivered or made available to Purchasers
true, correct
and complete copies of all of the Material Contracts and Shared
Contracts.
Except as set forth in Section 3.20(c)(ii) of the Disclosure
Schedule, each
Material Contract and Shared Contract upon consummation of the
Transactions,
except to the extent that any consent set forth in Section 3.05 of
the
Disclosure Schedule is not obtained, shall continue in full force
and effect
without penalty or other adverse consequence. Except as set forth
in Section
3.20(c)(iii) of the Disclosure Schedule, none of the Acquired
Companies (or, in
the case of Shared Contracts, the Vitro Entities) is in breach of,
or default
under, any Material Contract, Shared Contract, or, as of the
Closing, any
Contract set forth on Schedule 3.08(e) hereto, and to which it is a
party,
except to the extent such breach or default would not reasonably be
expected to
result in a Material Impairment.
SECTION 3.21. Customers. Set forth in Section 3.21(a) of the
Disclosure Schedule is a complete and correct list of the names and
addresses of
the 20 most significant customers and distributors (excluding
Affiliates of
Purchasers) based on dollar sales volumes of the Business during
the 12-month
period ended December 31, 2005 and the amount for which each such
customer or
distributor was invoiced during such period. Except as set forth on
Section
3.21(b) of the Disclosure Schedule, none of the Business Owners has
received any
notice or has any valid reason to believe that any such customer or
distributor
has ceased or has substantially reduced, or intends to cease or
substantially
reduce, the purchase, use or distribution of products, Equipment,
goods or
services of the Business at any time.
SECTION 3.22. Suppliers. Set forth in Section 3.22(a) of the
Disclosure Schedule is a complete and correct list of the names and
addresses of
the 20 most significant suppliers of the Business based on amounts
invoiced
during the 12-month period ended December 31, 2005, the amount for
which each
supplier invoiced the Business during such period and the total
amount owed to
each such supplier on December 31, 2005. Except as set forth in
Section 3.22(b)
of the Disclosure Schedule, none of the Business Owners has
