EXHIBIT 10.76
STOCK PROMISSORY SALE AND PURCHASE AGREEMENT
between
VAA - VISTA ALEGRE ATLANTIS SGPS, SA
and
LIBBEY EUROPE B.V.
DATED AS OF JANUARY 10, 2005
TABLE OF CONTENTS
PAGE
PREAMBLE; RECITALS............................................................................. 1
ARTICLE 1 SALE AND PURCHASE OF SHARES.......................................................... 1
1.1. Sale and Purchase.................................................................. 1
1.2. Purchase Price..................................................................... 2
1.3. Earn-out Payment................................................................... 3
1.4. Post-Closing Adjustment............................................................ 6
1.5. Payments........................................................................... 7
ARTICLE 2 CLOSING.............................................................................. 7
2.1. Date and Place of Closing.......................................................... 7
2.2. Closing Transactions and Deliveries................................................ 8
2.3. Endorsement of Share Certificates.................................................. 8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...................................... 9
3.1. Organization; Authority; Execution................................................. 9
3.2. Consents........................................................................... 9
3.3. Effect of the Transaction.......................................................... 9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER......................................... 9
4.1. Organization; Authority; Execution................................................. 9
4.2. Capital............................................................................ 10
4.3. Ownership of the Shares............................................................ 11
4.4. Consents........................................................................... 11
4.5. Effect of the Transaction.......................................................... 11
4.6. Compliance with Law................................................................ 12
4.7. Accounting and Financial Documents................................................. 12
4.8. Conduct of Business................................................................ 13
4.9. Sufficiency of Information Technology; Services.................................... 14
4.10. Real Property...................................................................... 15
4.11. Movable Property and Business...................................................... 15
4.12. Intellectual Property Rights....................................................... 15
4.13. Receivables........................................................................ 16
4.14. Inventory.......................................................................... 16
4.15. Contracts.......................................................................... 16
4.16. Bonus Programs..................................................................... 18
4.17. Subsidies.......................................................................... 18
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TABLE OF CONTENTS
(continued)
Page
4.18. Insurance.......................................................................... 18
4.19. Employment Matters................................................................. 18
4.20. Pension and Other Employee Benefit Matters......................................... 20
4.21. Tax; Social Security; Customs...................................................... 21
4.22. Environment........................................................................ 22
4.23. Litigation and Proceedings......................................................... 22
4.24. Product Liability.................................................................. 23
4.25. Bank Accounts and Signature Powers................................................. 23
4.26. Intermediaries..................................................................... 23
4.27. Customer-owned Molds............................................................... 23
4.28. Completeness of Representations and Warranties..................................... 23
ARTICLE 5 COVENANTS OF THE PURCHASER........................................................... 23
5.1. Best Efforts Undertaking........................................................... 23
5.2. Confidentiality.................................................................... 24
5.3. Restricted Actions; Board of Directors............................................. 24
5.4. Board Member....................................................................... 24
ARTICLE 6 COVENANTS OF THE SELLER.............................................................. 25
6.1. Best Efforts Undertaking........................................................... 25
6.2. Confidentiality and Exclusivity.................................................... 25
6.3. Management of the Company.......................................................... 25
6.4. Non-competition and Non-solicitation............................................... 25
6.5. Employee Notification.............................................................. 26
6.6. Access and Information............................................................. 26
6.7. Cancellation of Related-Party Contracts and Satisfaction of Debts.................. 26
6.8. Waivers............................................................................ 27
6.9. Assistance with Regard to Relationships............................................ 27
6.10. Further Agreements................................................................. 27
6.11. Transfer Pricing File.............................................................. 27
6.12. Remaining Shares................................................................... 27
6.13. Intellectual Property.............................................................. 28
6.14. Governmental Authorities........................................................... 28
6.15. Government Incentive Contract...................................................... 28
6.16. Satisfaction of Indebtedness....................................................... 28
ii
TABLE OF CONTENTS
(continued)
Page
6.17 Receipts of Payment................................................................ 28
ARTICLE 7 INDEMNIFICATION...................................................................... 28
7.1. Indemnification by the Seller...................................................... 28
7.2. Indemnification by the Purchaser................................................... 29
7.3. Environmental Matters.............................................................. 29
7.4. Notification and Payment of Claims................................................. 30
7.5. Third Party Claims................................................................. 30
7.6. Determination of the Indemnification Amount........................................ 31
7.7. Threshold.......................................................................... 32
7.8. Deductible......................................................................... 32
7.9. Maximum Amount..................................................................... 32
7.10. Exceptions to Limitations on Indemnification....................................... 32
7.11. Interest........................................................................... 33
7.12. Deadlines for Claims............................................................... 33
7.13. Release............................................................................ 33
7.14. Duty to Mitigate................................................................... 33
ARTICLE 8 FURTHER AGREEMENTS................................................................... 33
8.1. Merger Notification................................................................ 33
8.2. Employee Issues.................................................................... 33
8.3. Outlet Stores...................................................................... 34
8.4. Historical Data on BAAN............................................................ 34
8.5. Supply of Non-Soda Lime Glassware and Ceramic Products............................. 34
8.6. IVIMA Warehouse.................................................................... 34
8.7. Cancellation and Replacement of Guarantees......................................... 34
8.8. Government Incentive Contract...................................................... 35
8.9 Payments for Furnace Repairs....................................................... 36
ARTICLE 9 CONDITIONS TO CLOSING; TERMINATION................................................... 36
9.1. Conditions to Each Party's Obligations............................................. 36
9.2. Conditions to the Purchaser's Obligations.......................................... 37
9.3. Conditions to the Seller's Obligations............................................. 37
9.4. Termination........................................................................ 38
ARTICLE 10 MISCELLANEOUS........................................................................ 38
10.1. Arbitration........................................................................ 38
iii
TABLE OF CONTENTS
(continued)
Page
10.2. Language........................................................................... 38
10.3. Waiver; Enforcement................................................................ 38
10.4. Right to Set-off................................................................... 38
ARTICLE 11 INTERPRETATION; DEFINITIONS.......................................................... 38
11.1. Headings........................................................................... 38
11.2. Definitions........................................................................ 39
ARTICLE 12 GENERAL PROVISIONS................................................................... 45
12.1. Cooperation........................................................................ 45
12.2. Announcements...................................................................... 45
12.3. Assignment......................................................................... 46
12.4. Third Party Beneficiaries.......................................................... 46
12.5. Entire Agreement................................................................... 46
12.6. Severability....................................................................... 46
12.7. Notices and Communications......................................................... 46
12.8. Costs.............................................................................. 47
12.9. No Waiver.......................................................................... 47
12.10. Specific Performance............................................................... 47
12.11. Governing Law...................................................................... 47
iv
TABLE OF ANNEXES
Annex 1.2(d) Form of Remaining Shares Escrow Agreement
Annex 1.3(b) Net Sales and EBITDA Calculation Principles
Annex 2.2(a)(ii) Form of Resignation Letters
Annex 2.2(a)(iv) Form of Transfer Letter for Original Shares
Annex 2.2(c) Form of Guarantee Letter*
Annex 2.2(e) Form of Transfer Letter for Remaining Shares
Annex 4.1(a) Extracts from Trade Register and Organizational Documents
Annex 4.4 Seller Consents
Annex 4.7(a) 2003 Financial Statements
Annex 4.7(b) 2004 Financial Statements
Annex 4.7(e) Amounts Outstanding under Government Incentive Contract
Annex 4.8(a) Conduct of Business Exceptions (January 1, 2004)
Annex 4.8(b) Conduct of Business Exceptions (October 1, 2004)
Annex 4.9 Services by Seller and its Affiliates
Annex 4.10(a) Real Property Ownership
Annex 4.10(b) Real Property Leases
Annex 4.11(a) Assets Used but not Owned or Leased
Annex 4.11(c) Assets Used by Printglass
Annex 4.12(a) Intellectual Property Ownership
Annex 4.12(b) Intellectual Property Licenses
Annex 4.14 Inventory
Annex 4.15 Material Contracts
Annex 4.16 Bonus Programs
Annex 4.17 Subsidies
Annex 4.18 Insurance Claims
Annex 4.19(b) Collective Agreements and Benefits
Annex 4.19(c) Employees
Annex 4.19(d) Temporary and Term Employment Agreements
Annex 4.19(e) Increased Payments to Employees
Annex 4.20(a) Pension and Other Benefit Commitments
Annex 4.20(b) Pension Plan
Annex 4.20(c) Actuarial Report
Annex 4.20(d) Authorization of New Plan
Annex 4.21(e) Tax and Social Receivables
Annex 4.23 Litigation
Annex 4.25 Accounts and Signatories
Annex 4.27 Customer-owned Molds
Annex 8.2 Employees Subject to Transfer
Annex 8.3 Outlet Store Employees
*Only Annex 2.2(c) is attached. All other annexes have been omitted
intentionally. The registrant shall furnish a supplementary copy of each such
other annex to the Commission upon its request.
STOCK PROMISSORY SALE AND PURCHASE AGREEMENT
This Stock Promissory Sale and Purchase Agreement, dated as of January 10, 2005
(this "AGREEMENT"), is between VAA - Vista Alegre Atlantis SGPS, SA,
incorporated and organized under the laws of Portugal with its registered office
at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇-▇(▇▇▇▇▇▇), ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, registered
in the Commercial Registry of Lisboa under number 466 (the "SELLER"), and Libbey
Europe B.V., a limited liability company (besloten vennootschap met beperkte
aansprakelijkheid) organized under the laws of the Netherlands and having its
principal place of business at ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ or,
if the Purchaser notifies the Seller in writing at least five (5) days prior to
the Closing Date, an Affiliate of the Purchaser (the "PURCHASER"). The Seller
and the Purchaser are referred to herein collectively as the "Parties" and
individually as a "PARTY."
RECITALS
A. The Seller is the owner of all of the shares representing one hundred
percent (100%) of the entire issued and outstanding interest of
Crisal-Cristalaria Automatica, S.A., (the "SHARES"), a company
incorporated and organized under the laws of Portugal with its registered
office at Lugar de Casal de Areia, Freguesia de Cos, Concelho de Alcobaca,
Portugal, with share capital of thirteen million five hundred thousand
euro ((euro) 13,500,000) registered in the Commercial Registry of Alcobaca
under number 3086, tax number 505 210 150 (the "COMPANY").
B. The Seller wishes to sell and transfer, and the Purchaser wishes to
purchase, the Shares, on the terms and subject to the conditions set forth
hereunder.
The Parties have therefore agreed as follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES
1.1. Sale and Purchase.
(a) Subject to the terms and conditions of this Agreement, the Seller
hereby promises to sell and transfer to the Purchaser and the
Purchaser hereby promises to purchase from the Seller, the Shares,
in accordance with the following schedule:
(i) On the Closing Date, the Seller shall sell and transfer and
the Purchaser shall purchase ninety-five percent (95%) of the
Shares (the "ORIGINAL SHARES").
(ii) The Seller shall sell and transfer to the Purchaser and the
Purchaser shall purchase from the Seller the remaining five
percent (5%) of the Shares (or, if the Company is transformed
from an S.A. into another type of legal entity after the
Closing Date, such other right or title representing the
remaining five percent (5%) ownership in the Company),
including all rights attached thereto (the "REMAINING
SHARES"), on the earlier of (a) a date to be determined at the
sole discretion of the Purchaser and set forth in a written
notice sent to the Seller, but which shall not be earlier than
seven (7) Business Days as
from such written notice, or (b) seven (7) days after the date
on which the Contingency Payment Statement for the Initial
Earn-out Calculation Period becomes final (the "REMAINING
SHARES PURCHASE DATE").
(b) The Original Shares and the Remaining Shares shall be sold
free and clear of all Encumbrances, together with all rights
attaching thereto. The representations and warranties set
forth in Sections 4.1(b), 4.1(c), 4.3(a), 4.3(b) and 4.4 of
this Agreement shall be deemed to have been restated by the
Seller as of the effective date of sale of the Remaining
Shares, as if such representations and warranties were made as
of such date; provided, however, that for purposes of this
Section 1.1(b) only, "Shares" as used in Sections 4.1(b),
4.1(c), 4.3(a), 4.3(b) and 4.4 shall be deemed to mean
"Remaining Shares" and the Seller shall make no
representations and warranties concerning the Company.
1.2. Purchase Price.
(a) The consideration to be paid by the Purchaser to the Seller shall
consist of
(i) a payment equal to twenty-seven million five hundred thousand
euro ((euro) 27,500,000) (the "INITIAL PAYMENT"), minus (a)
the amount of the principal balance of any reimbursable loans
(incentivos reembolsaveis), plus any accrued and unpaid
interest and fees or penalties, specified on the Government
Incentive Contract Statement required under Section 1.2(b)(i),
(b) the amount (if any) specified on the Indebtedness
Statement required under Section 1.2(b)(ii), and (c) two
hundred fifty thousand euro ((euro) 250,000); plus
(ii) an additional payment to be determined in accordance with
Section 1.2(c), to be paid on the Remaining Shares Purchase
Date; plus
(iii) a contingent payment as described in Section 1.3 below.
(b) Four (4) Business Days before the Closing Date, the Seller shall
provide the Purchaser with the following:
(i) a statement setting forth (a) the amount of principal balance
of any reimbursable loans (incentivos reembolsaveis), plus
accrued and unpaid interest and fees or penalties, in each
case as may be outstanding under the Government Incentive
Contract as of the Closing Date, and (b) the amount of funds
earned or received under the Government Incentive Contract
that the Seller (or the Company) has characterized as
non-reimbursable loans (incentivos nao reembolsaveis) as of
the Closing Date (the "GOVERNMENT INCENTIVE CONTRACT
STATEMENT"); and
(ii) a written notice specifying the amount of Indebtedness
including any accrued and unpaid interest (other than amounts
under Section 1.2(a)(i)(a)) that will remain outstanding on
the Closing Date and detailing the amounts of any additional
borrowings or payments made
2
between the date of the last monthly report provided to the
Purchaser pursuant to Section 6.6 and the Closing Date (the
"INDEBTEDNESS Statement");
provided, however, that if the Closing Date will occur fewer than
four (4) Business Days after all of the conditions in Article 9 are
fulfilled, the Seller shall provide such documents at such time as
reasonably agreed by the Seller and the Purchaser.
(c) On the Remaining Shares Purchase Date, the Purchaser shall pay to
the Seller either a "PERFORMANCE PAYMENT" equal to two million euros
((euro) 2,000,000) (reduced by the sum of any amounts due on the
Remaining Shares Purchase Date by the Seller to the Company pursuant
to Sections 8.8(a) and (c)), or a "DEFERRED PAYMENT" equal to one
euro ((euro) 1) (reduced by the sum of any amounts due on the
Remaining Shares Purchase Date by the Seller to the Company pursuant
to Sections 8.8(a) and (c)), as follows:
(i) If the Remaining Shares Purchase Date is not prior to the
third (3rd) anniversary of the Closing Date, the Purchaser
shall pay an amount equal to (a) the Performance Payment if
the cumulative EBITDA of the Company for any eight (8)
calendar quarters between the Closing Date and the third (3rd)
anniversary of the Closing Date equals or exceeds ten million
euro ((euro) 10,000,000), or (b) the Deferred Payment if the
cumulative EBITDA of the Company does not equal or exceed ten
million euro ((euro) 10,000,000) for any eight (8) calendar
quarters during such period; and
(ii) If the Remaining Shares Purchase Date is on or prior to the
third (3rd) anniversary of the Closing Date, the Purchaser
shall pay an amount equal to the Performance Payment.
(d) On the Closing Date, the Parties shall execute and deliver, together
with the Escrow Agent, an escrow agreement (the "REMAINING SHARES
ESCROW AGREEMENT") in the form attached hereto as ANNEX 1.2(D). In
accordance with the Remaining Shares Escrow Agreement and Section
2.2(e), the Seller shall, on the Closing Date, deposit the Remaining
Shares and the letter referred to in Section 2.2(e)(ii) with the
Escrow Agent in accordance with the Remaining Shares Escrow
Agreement. Such documents will be released in accordance with the
Remaining Shares Escrow Agreement and Section 2.2(e)(ii).
1.3. Earn-out Payment.
(a) The Purchaser shall pay to the Seller an earn-out payment (the
"EARN-OUT PAYMENT"), subject to the following:
(i) The Purchaser shall pay an Earn-out Payment of five million
five hundred thousand euro ((euro)5,500,000) if
a. for the thirty-six (36) month period beginning on the
EBITDA Start Date (the "INITIAL EARN-OUT CALCULATION
PERIOD"), (i) the
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Company's cumulative EBITDA equals or exceeds eighteen
million euro ((euro) 18,000,000), and (ii) the value of
the Company's cumulative Net Sales averages thirty
million euro ((euro) 30,000,000) or more per annum
during such Initial Earn-out Calculation Period; or
b. for the last twelve (12) months of the Initial Earn-out
Calculation Period, (i) the Company's cumulative EBITDA
equals or exceeds six million euro ((euro) 6,000,000),
and (ii) the value of the Company's cumulative Net Sales
equals or exceeds thirty million euro ((euro)
30,000,000).
(ii) If the conditions in neither Section 1.3(a)(i)(a) nor Section
1.3(a)(i)(b) are satisfied, the following provisions will
apply:
a. The Purchaser shall pay an Earn-out Payment of five
million five hundred thousand euro ((euro) 5,500,000)
plus interest if, during any period of four (4)
consecutive calendar quarters during the sixty (60)
month period beginning on the day after the last day of
the Initial Earn-out Calculation Period, (i) the
Company's cumulative EBITDA equals or exceeds six
million euro ((euro) 6,000,000), and (ii) the value of
the Company's cumulative Net Sales equals or exceeds
thirty million euro ((euro) 30,000,000). The "EXTENDED
EARN-OUT CALCULATION PERIOD" shall mean the period
beginning on the day after the last day of the Initial
Earn-out Calculation Period and ending on the earlier of
(x) the last day of such sixty (60) month period and (y)
the last day of the first four (4) consecutive calendar
quarter period in which the conditions in this Section
1.3(a)(ii)(a) are satisfied.
b. Interest due pursuant to Section 1.3(a)(ii)(a) shall
accrue at a rate per annum equal to EURIBOR for three
(3) month interbank loans plus two and a half percent
(2.5%) per annum and shall be compounded. Interest shall
be calculated on the basis of a three hundred sixty-five
(365) day year and the actual number of days elapsed,
shall begin accruing on the first day of the Extended
Earn-out Calculation Period and shall cease accruing on
the last day of the Extended Earn-out Calculation
Period.
(iii) If the Seller is not entitled to an Earn-out Payment pursuant
to Sections 1.3(a)(i)(a), 1.3(a)(i)(b) or 1.3(a)(ii)(a), the
Purchaser shall not owe the Seller an Earn-out Payment. For
the avoidance of doubt, the Seller shall in no event be
entitled to more than one Earn-out Payment.
(iv) The "EBITDA START DATE" shall mean January 1, 2005.
(b) Calculations of Net Sales and EBITDA pursuant to this Section 1.3
shall be made on a Consistent Basis in accordance with the
principles in ANNEX 1.3(B), which sets forth a detailed calculation
of the Company's Net Sales and
4
EBITDA for 2003 and a detailed reconciliation of the Company's EBIT
for 2003 to Portuguese GAAP.
(c) The Purchaser shall calculate Net Sales and EBITDA for the first and
second twelve (12) month periods during the Initial Earn-out
Calculation Period, and shall send to the Seller, within sixty (60)
days following the end of the first twelve (12) month period and
second twelve (12) month period, respectively, a statement setting
forth the Net Sales and EBITDA. The Seller may notify the Purchaser
of any disagreements it has with such calculations; provided,
however, that the Seller shall only have the right to dispute the
calculations relating to the first and second twelve (12) month
periods at the end of the Initial Earn-out Calculation Period in
accordance with Section 1.3(d). Any exercise of, or failure to
exercise, such notice rights by the Seller shall not constitute a
waiver of any rights or claims the Seller has under Section 1.3(d).
(d) The Purchaser shall calculate Net Sales and EBITDA for the
applicable periods and shall send to the Seller, within sixty (60)
days following the end of the Initial Earn-out Calculation Period
and, if applicable, commencing with the fourth (4th) calendar
quarter, at the end of each calendar quarter during the Extended
Earn-out Calculation Period, a statement (a "CONTINGENCY PAYMENT
STATEMENT") setting forth the Net Sales and EBITDA and stating the
amount to be paid for the Remaining Shares pursuant to Section
1.2(c), if applicable, and stating whether the Earn-Out Payment is
payable to the Seller and, if applicable, the amount of interest
due. The Contingency Payment Statement shall become final and
binding upon the Parties thirty (30) days after the Seller's receipt
of the Contingency Payment Statement, unless the Seller gives
written notice to the Purchaser before such date of its disagreement
with the Contingency Payment Statement (a "SELLER'S CONTINGENCY
PAYMENT OBJECTION"). Any Seller's Contingency Payment Objection
shall specify in reasonable detail the nature of any disagreement
with the Contingency Payment Statement. During the thirty (30) days
following the Purchaser's receipt of a Seller's Contingency Payment
Objection, the Parties shall attempt to resolve in writing any
differences that they may have concerning any matters set out in the
Seller's Contingency Payment Objection. If, at the end of such
thirty (30) day period, the Parties have not reached written
agreement on all such matters, then either Party may refer the
remaining differences by written notice to the Independent
Accountant. If such a referral is not made by either Party within
forty-five (45) days following the Purchaser's receipt of a Seller's
Contingency Payment Objection, the Contingency Payment Statement
will become final and binding on the Parties. If such a referral is
made, the Independent Accountant shall resolve the matters set forth
in the Seller's Contingency Payment Objection on which the Parties
have not agreed, as set out in the written notice to it. The
Independent Accountant shall give the Parties the opportunity to set
forth in writing their positions regarding the matters in dispute
and shall deliver its written determination of such matters to the
Parties as soon as reasonably possible after being notified of the
dispute. The Independent Accountant's determination shall be
conclusive and binding upon the Parties. The fees and disbursements
of the Independent Accountant shall be borne equally by the
Purchaser and the Seller. The Purchaser shall make readily
5
available to the Seller, and the Parties shall make readily
available to the Independent Accountant, all relevant books and
records and any work papers relating to the Contingency Payment
Statement. Upon resolution of all disputed matters, the Independent
Accountant shall cause to be prepared and shall deliver to the
Parties the Contingency Payment Statement, reflecting the resolution
of such disputed matters, which shall then be final and binding on
the Parties, absent manifest error.
(e) If an Earn-out Payment is due, such payment shall be paid by the
Purchaser to the Seller within seven (7) days following the date on
which the Contingency Payment Statement for the relevant calculation
period has become final.
(f) Without prejudice to Section 5.3(b) of this Agreement, the Seller's
sole remedy in connection with any claim by the Seller that its
contingent payment interests in the Earn-out Payment have been
adversely affected as a result of the management of the Company's
business after Closing shall be, in the event that an Earn-out
Payment is not made during the Initial Earn-out Calculation Period,
the possibility of an Earn-out Payment in relation to the Extended
Earn-out Calculation Period in accordance with this Section 1.3.
1.4. Post-Closing Adjustment.
(a) As soon as possible after the Closing, but in any event within sixty
(60) days thereafter, the Purchaser shall at its expense prepare or
cause to be prepared, and deliver to the Seller an audited balance
sheet of the Company as of the Closing Date, in accordance with
Portuguese GAAP, Applied on a Consistent Basis (the "CLOSING
STATEMENT"), which will include information for determining the
Closing Indebtedness and Closing Cash. In preparing such Closing
Statement, the Purchaser shall cause the newly appointed Company's
auditors to consult with the former auditors of the Company, and the
Seller shall be liable for the expenses of the former auditors.
(b) The Closing Statement shall become final and binding upon the
Parties thirty (30) days after the Seller's receipt of the Closing
Statement, unless the Seller gives written notice to the Purchaser
before such date of its disagreement with the Closing Statement (a
"SELLER'S CLOSING STATEMENT OBJECTION"). Any Seller's Closing
Statement Objection shall specify in reasonable detail the nature of
any disagreement with the Closing Statement. During the fifteen (15)
days following the Purchaser's receipt of a Seller's Closing
Statement Objection, the Parties shall attempt to resolve in writing
any differences that they may have concerning any matters set out in
the Seller's Closing Statement Objection. If, at the end of such
fifteen (15) day period, the Parties have not reached written
agreement on all such matters, then either Party may refer the
remaining differences by written notice to the Independent
Accountant. If such a referral is not made by either Party within
thirty (30) days following the Purchaser's receipt of a Seller's
Closing Statement Objection, the Closing Statement will become final
and binding on the Parties. If such a referral is made, the
Independent Accountant shall resolve the matters set forth in the
Seller's Closing Statement Objection on which the Parties have not
agreed, as set out in the written notice to it. The Independent
Accountant shall give the Parties the opportunity to set forth in
writing their positions regarding the matters in dispute and shall
deliver its written
6
determination of such matters to the Parties as soon as reasonably
possible after being notified of the dispute. The Independent
Accountant's determination shall be conclusive and binding upon the
Parties. The fees and disbursements of the Independent Accountant
shall be borne equally by the Purchaser and the Seller. The
Purchaser shall make readily available to the Seller, and the
Parties shall make readily available to the Independent Accountant,
all relevant books and records and any work papers relating to the
Closing Statement. Upon resolution of all disputed matters, the
Independent Accountant shall cause to be prepared and shall deliver
to the Parties the Closing Statement, reflecting the resolution of
such disputed matters, which shall then be final and binding on the
Parties, absent manifest error.
(c) If the Closing Indebtedness, less the amount of any outstanding
reimbursable amounts (including any accrued and unpaid interest and
fees or penalties) under the Government Incentive Contract and the
amount of any other Indebtedness that, in each case, have been
deducted in accordance with Section 1.2(a)(i), is greater than the
Closing Cash, the Seller shall pay such difference to the Purchaser
as a post-Closing Purchase Price adjustment. If the Closing Cash is
greater than the Closing Indebtedness, less the amount of any
outstanding reimbursable amounts under the Government Incentive
Contract (including any accrued and unpaid interest and fees or
penalties) and the amount of any other Indebtedness that, in each
case, have been deducted in accordance with Section 1.2(a)(i), the
Purchaser shall pay such difference to the Seller as a post-Closing
Purchase Price adjustment.
(d) Payments due under this Section 1.4 shall be made within five (5)
days after the Closing Statement becomes final and binding on the
Parties and shall bear interest at a rate per annum equal to EURIBOR
for three (3) month interbank loans plus two and a half percent
(2.5%) calculated on the basis of a three hundred sixty-five (365)
day year and the actual number of days elapsed, from the Closing
Date until the date of effective payment.
1.5. Payments. All payments to be made pursuant to this Agreement shall be made
in euros, for same day value, by certified bankers check or by wire
transfer to the bank account notified in writing by the Seller to the
Purchaser, or by the Purchaser to the Seller, as applicable, no later than
four (4) Business Days before the date of payment.
ARTICLE 2
CLOSING
2.1. Date and Place of Closing. Subject to Section 9.4 of this Agreement, the
closing of the sale and purchase of the Original Shares (the "CLOSING")
shall take place, at the option of the Purchaser, (i) within five (5)
Business Days of the fulfillment or waiver of the last of the conditions
set out in Article 9, (ii) on the last Business Day of the month in which
the last of the conditions set out in Article 9 has been fulfilled or
waived, or (iii) within the first three (3) Business Days of the month
following the month in which the last of the conditions set out in Article
9 has been fulfilled or waived, at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Castelo ▇▇▇▇▇▇ & Associados, PC. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇-▇(▇▇▇▇▇▇), ▇▇▇▇-▇▇▇,
▇▇▇▇▇▇, Portugal, provided that all the conditions set out in Article 9
remain satisfied or waived on that date. The Closing shall take place at a
time to be set by agreement among the Parties, or failing such
7
agreement, at 10.00 a.m. The date on which the Closing takes place is
referred to herein as the "CLOSING DATE."
2.2. Closing Transactions and Deliveries. On the Closing Date:
(a) The Seller shall deliver to the Purchaser:
(i) all corporate documents relating to the Company that are not
in the Company's possession (if any);
(ii) the written resignations of members of the corporate bodies of
the Company as required by the Purchaser in the form attached
as ANNEX 2.2(A)(II);
(iii) copies of resolutions of the Seller's Board of Directors
approving the Transaction; and
(iv) the original of the Seller letter to the Company requesting
the transfer of the Original Shares in the form attached as
ANNEX 2.2(A)(IV).
(b) The Seller shall deliver to the Purchaser the share certificates
representing the Original Shares duly endorsed in favor of the
Purchaser.
(c) The Purchaser shall deliver a letter from Libbey Inc. guaranteeing
the payment to the Seller of the Earn-out Payment, if and when it
becomes due, in the form attached as ANNEX 2.2(C).
(d) The Purchaser shall pay to the Seller the Initial Payment in
accordance with Section 1.2(a)(i).
(e) With regard to the Remaining Shares, the Seller shall deliver to the
Escrow Agent:
(i) the respective share certificates with the endorsement in
blank; and
(ii) a letter from the Seller to the Company requesting the
transfer of the Remaining Shares, in the form attached as
ANNEX 2.2(E).
2.3. Endorsement of Share Certificates. On the Remaining Shares Purchase Date
and upon the payment of the Performance Payment or the Deferred Payment,
as applicable, by the Purchaser to the Escrow Agent for the benefit of the
Seller, the Escrow Agent will (x) fill in and complete the endorsement in
the share certificates of the Remaining Shares referred to in Section
2.2(e)(i) above with the identity of the Purchaser, (y) deliver to the
Purchaser such certificates and to the Company the letter referred to in
Section 2.2(e)(ii) above, upon releasing to the Seller the Performance
Payment or the Deferred Payment, as applicable; provided that, in the
event that the Company is transformed from an S.A. into another type of
legal entity after the Closing Date, with respect to the formalities
contemplated under (x) and (y) above, the Parties and the Escrow Agent
shall comply with such other formalities as are required under Portuguese
law in order to transfer the ownership interest held by the Seller in the
Company to the Purchaser, and the Seller shall cooperate with the
Purchaser in entering into such new arrangements with the Escrow Agent,
including
8
depositing any necessary documentation into the Remaining Shares Escrow
Agreement, necessary to realize the objectives of this Section 2.3.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants that the following statements are true and
correct as of the date hereof and will be true and correct as of the Closing
Date, unless otherwise stated:
3.1. Organization; Authority; Execution.
(a) The Purchaser is a corporation duly organized and validly existing
under the Laws of its jurisdiction of incorporation, and has the
corporate power and authority to conduct its business as currently
conducted.
(b) The Purchaser has the power and authority to enter into this
Agreement and to carry out its obligations hereunder. The Purchaser
has duly authorized the execution of this Agreement and the
consummation of the Transaction, and no other corporate action on
the part of the Purchaser is necessary to authorize the execution by
it of this Agreement or the consummation of the Transaction.
(c) This Agreement has been duly executed by the Purchaser and
constitutes a legal, valid and binding obligation of the Purchaser,
enforceable against it in accordance with its terms.
3.2. Consents. Except for the Merger Notification, the Purchaser is not
required to obtain any Consents from third parties in connection with the
execution or enforceability of this Agreement or the consummation of any
of the Transactions.
3.3. Effect of the Transaction. The execution of this Agreement by the
Purchaser, its performance of its obligations hereunder, and the
consummation by it of the Transaction does not give rise to any conflict
with, or violation or breach of, any provision of its organizational
documents (including its by-laws), or of any applicable Law.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants that the following statements, taking into
account any exceptions, disclosures, limitations and qualifications with regard
to each such statement in the Annexes to this Article 4, are true and correct as
of the date hereof and will be true and correct as of the Closing Date:
4.1. Organization; Authority; Execution.
(a) The Company is a corporation duly organized, validly existing and,
where applicable, in good standing under the Laws of its
jurisdiction of incorporation; the Company has the corporate power
and authority to own, lease and operate the assets held or used by
it. The Company is duly registered with the Commercial Registry of
Alcobaca under number 3086, and the information contained in such
trade register as reflected in extracts from
9
such trade register dated January 6, 2005, copies of which are
attached in ANNEX 4.1(a), is correct and complete. A copy of the
current organizational documents of the Company is attached hereto
in ANNEX 4.1(a).
(b) The Seller has the power and authority to enter into this Agreement
and to carry out its obligations hereunder. The Seller has duly
authorized the execution of this Agreement and the consummation of
the Transaction, and no other corporate action on the part of the
Seller is necessary to authorize the execution by it of this
Agreement or the consummation of the transactions contemplated
herein.
(c) This Agreement has been duly executed by the Seller, and constitutes
a legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms.
(d) Neither the Seller nor the Company is the subject of any current,
pending or to the Seller's best knowledge threatened Proceeding
under any bankruptcy, insolvency, moratorium on payments, judicial
composition, dissolution, liquidation or any other debtor relief or
similar Laws, and no circumstances exist that would form the basis
for the initiation of any such Proceeding.
(e) There has been no proposal made or resolution adopted by any
competent corporate body of either of the Seller or the Company for
the dissolution, liquidation, merger or split-up of either of them,
and no circumstances exist that would form the basis for the
mandatory dissolution or liquidation of either of them.
(f) The minute books or similar records of the Company (or, to the
extent that separate minute books or similar records have not been
kept for the Company, the documents referred to in Section 4.1(g))
contain an accurate record of all meetings and other corporate
action of the Company's stockholders, Board of Directors or other
governing bodies, and any committees thereof. All of the registers,
account books and corporate documents of the Company (or, to the
extent that separate minute books or similar records have not been
kept for the Company, the documents referred to in Section 4.1(g))
have been and continue to be regularly maintained, and give a true
and accurate account of the activities of the Company as required by
Law in all material respects.
(g) The Seller has delivered to the Company, or the Company is otherwise
in possession of all corporate documents of the Company, including
all documents that the Company is required to keep or maintain by
Law.
4.2. Capital. The Seller owns all of the Shares in the Company. All of the
Shares have been validly issued and are fully paid up and, where
applicable, non-assessable. Except for the Shares, the Company has not
issued or cooperated with the issue of any shares or other securities
(including warrants) or depositary receipts of shares ("titulos
definitivos ou provisorios ou quaisquer outros tipos de valores
mobiliarios"). There are no options, warrants or other agreements or
undertakings pursuant to which the Company is or could be bound to issue
any shares or other securities (including warrants). No securities issued
by the Company are listed on any stock exchange or unregulated market.
10
4.3. Ownership of the Shares.
(a) The Seller is the unconditional legal and beneficial owner and the
holder of record of the Shares, free and clear of all Encumbrances.
The rights of the Seller with respect to the Shares is not subject
to revocation, rescission or any form of annulment whatsoever.
(b) None of the Shares have been transferred or encumbered in advance
("oneradas por qualquer forma"), and the Seller has not received any
notice of an attachment ("Penhora ou qualquer outro tipo de
apreensao judicial ou extra judicial") thereon.
(c) Except in relation to Printglass - Transformacao ▇▇ ▇▇▇▇▇ LDA, the
Company does not own and has not committed to acquire, directly or
indirectly, any shareholding or other interest in any corporation,
partnership or other entity, nor does the Company serve as director
or manager in any company or entity.
(d) As of the Closing Date, the Company shall be the unconditional legal
and beneficial owner and the holder of record of share capital in
Printglass, representing an ownership interest of nineteen percent
(19%) of Printglass, free and clear of all Encumbrances. The rights
of the Company with respect to such share capital will not be
subject to revocation, rescission or any form of annulment
whatsoever.
4.4. Consents. Except for the Merger Notification, the Declaration and as set
out in ANNEX 4.4, neither the Seller nor the Company is required to obtain
any Consents from, make any filings with, or give any notices to any
Governmental Authority or other person in connection with the execution or
enforceability of this Agreement or the consummation of any part of the
Transaction.
4.5. Effect of the Transaction. The execution of this Agreement by the Seller,
the performance by it of its obligations hereunder, and the consummation
by it of the Transaction, does not and will not affect the legal situation
of the Company or the Company's rights and obligations vis-a-vis third
parties and will not give rise to any of the following:
(a) any conflict with, or violation of, any provision of the
organizational documents ("Estatutos, deliberacoes dos orgaos
sociais, regulamentos internos e similares") of the Company;
(b) any conflict with, or violation or breach of, any applicable Law, or
any other obligation of the Company;
(c) any loss or material change in the terms of any Subsidy;
(d) any breach of or default or event that, with the lapse of time or
giving of notice would constitute a default, under any Contract, or
any contractual cause for early termination of or acceleration of
payment under any Contract;
(e) any obligation to pay a bonus or indemnity of any type whatsoever to
any employee or corporate executive of the Company;
11
(f) any change to, suspension, cancellation or withdrawal of, any
Consent granted to the Company, or any favorable Tax or Social
benefit or regime enjoyed by the Company;
(g) any entitlement for any party to be released from its obligations
under the terms of any guarantee, comfort letter or other similar
document issued as a surety or in support of any undertakings by the
Company;
(h) any registration or creation of a pledge or other security interest
on the assets of the Company; and
(i) any impairment to the continued ownership or use by the Company of
the Intellectual Property Rights set out in Annex 4.12(a) and Annex
4.12(b).
4.6. Compliance with Law.
(a) The Company has conducted in all material respects its business in
compliance with all applicable Laws (including, without exception,
Laws concerning competition), Consents and Permits.
(b) The Company possesses all Consents and Permits required in
connection with its operations as currently conducted, and all such
Consents and Permits are in full force and effect. There are no
Proceedings to modify, suspend or terminate any such Consent or
Permit pending or, to the Seller's best knowledge, threatened, in
each case that could reasonably be expected to have a material
adverse effect on the Company's business as currently conducted.
(c) The Seller is not aware of any planned modifications to any Permits
that could reasonably be expected to be, individually or in the
aggregate, materially adverse to the Company.
4.7. Accounting and Financial Documents.
(a) ANNEX 4.7(a) contains complete and correct copies of the audited
financial statements (balance sheet, profit and loss statement, cash
flow statement and notes on the accounts (including any off-balance
sheet undertakings)) of the Company, including the report and
opinion of the independent auditor of the Company, as of and for the
period ended December 31, 2003, prepared in accordance with
Portuguese GAAP Applied on a Consistent Basis (the "2003 FINANCIAL
STATEMENTS").
(b) ANNEX 4.7(b) contains complete and correct copies of the unaudited
financial statements (balance sheet, profit and loss statement and
notes on the accounts (including off-balance sheet undertakings)) of
the Company as of and for the period ended September 30, 2004,
prepared in accordance with Portuguese GAAP Applied on a Consistent
Basis and including a comparison to the comparable period ended
September 30, 2003 (the "2004 FINANCIAL STATEMENTS" and, together
with the 2003 Financial Statements, the "FINANCIAL STATEMENTS").
(c) Subject to any applicable year-end adjustments in relation to the
2004 Financial Statements, the Financial Statements give a true and
accurate
12
account of the financial condition, assets, liabilities and results
of operations of the Company as of the respective dates thereof and
for the periods then ended. The 2003 Financial Statements have been
certified without qualification by the independent auditor of the
Company.
(d) As of the dates of the Financial Statements, the Company did not
have any Liabilities, whether due or to become due, that were either
(i) required by Portuguese GAAP to be reflected in the relevant
Financial Statements, or (ii) individually or in the aggregate
material to the financial condition of the Company, and that, in
either case, were not reflected or expressly reserved against in the
Financial Statements, specifically disclosed or provided for in the
notes thereto.
(e) ANNEX 4.7(e) sets forth the amount of principal balance, plus
accrued and unpaid interest and fees or penalties, outstanding under
the Government Incentive Contract as of the date hereof.
4.8. Conduct of Business.
(a) Since January 1, 2004, except as specifically contemplated herein or
as indicated in ANNEX 4.8(a):
(i) The Company has not undertaken any transaction materially
modifying the substance of, or the rights over, its assets,
such as any transfer, pledge, lease, grant of license or other
rights to third parties with respect to its tangible or
intangible assets;
(ii) The Company has not incurred or become subject to any
Liability, whether due or to become due, or entered into any
material transaction that is outside the Ordinary Course of
Business;
(iii) The Company has not made any change in its accounting
procedures or practices; and
(iv) The Company has not agreed to do any of the foregoing.
(b) Since October 1, 2004, except as specifically contemplated herein or
as indicated in ANNEX 4.8(b):
(i) The Company has carried out its activities in the Ordinary
Course of Business, using commercially reasonable efforts to
(a) preserve the organization and value of its business, its
goodwill and reputation, its relationships with its main
clients, suppliers, customers and agents, as well as with
public authorities, (b) keep available the services of its
employees, (c) maintain all its material assets and properties
in working condition, and (d) comply in all material respects
with all contractual and other obligations applicable to its
business.
(ii) The Company has not undergone or suffered any change in its
condition (financial or otherwise), income, properties,
Liabilities whether due or to become due or operations that
has been, or could reasonably be expected to be, individually
or in the aggregate,
13
materially adverse to the Company and, to the Seller's best
knowledge, no such change is pending or threatened;
(iii) The Company has not terminated any business relationship the
severing or cessation of which could have a material adverse
effect on its financial condition;
(iv) The Company has not declared any dividends or made any other
distribution of profits, reserves or retained earnings;
(v) The Company has not accelerated the collection of, granted any
discounts (other than in the Ordinary Course of Business) with
respect to, or sold to third parties, any accounts receivable
related to the Company, or delayed the payment of any payables
related to the Company or any portion thereof for a period
longer than fifteen (15) days beyond the normal payment
conditions of the Company; without limitation of the
foregoing, all charges and expenses related to the Contracts
listed in Annex 4.15, as required by Section 4.15(m) (except
in relation to the financial leases listed under Section
6.16), to the extent that such charges and expenses relate to
the Company's furnace number 2 (including expenditures made
for the reconfiguration of its machines), have been paid in
full;
(vi) The Company has not agreed to any merger, de-merger, spin-off
or consolidation; changed its share capital, issued any
securities of any nature whatsoever (including warrants),
granted any stock options, or purchased any of its own
securities;
(vii) No amendments have been made to the organizational documents
(including articles of association and by-laws) of the
Company;
(viii) The Company has not, except in the Ordinary Course of
Business, (i) varied the terms of any existing Indebtedness or
guarantee; (ii) subjected any of its properties or other
assets to any Encumbrance other than Permitted Encumbrances;
(iii) discharged or satisfied any Encumbrance or paid or
satisfied any Liability, whether due or to become due, in each
case other than upon it becoming due and payable; (iv)
cancelled, compromised, settled or otherwise adjusted any
debt, claim or Proceeding or waived or released any right
relating to its business; or (v) sold, assigned, transferred
or otherwise disposed of any assets with a book value greater
than fifty thousand euro ((euro)50,000); and
(ix) The Company has not agreed to do any of the foregoing.
4.9. Sufficiency of Information Technology; Services. The Company owns, leases
or licenses or is otherwise legally entitled to use all computer hardware,
software, databases and other information technology necessary for the
operation of its business, as currently conducted. Except as set forth in
ANNEX 4.9, the Seller and its Affiliates do not provide any services to
the Company.
14
4.10. Real Property.
(a) ANNEX 4.10(a) sets out a complete and accurate list of real property
owned by the Company. The Company has good and valid title to all
such property and, as of the Closing, all such property will be
owned by the Company free and clear of all Encumbrances, except for
Permitted Encumbrances. Without limiting the foregoing, no third
party may invoke retention or similar rights in order to encumber or
restrict the rights of the Company to the real property listed in
Annex 4.10(a) due to any events occurring or any circumstances
arising on or prior to the Closing Date or due to continuing events
that started on or prior to the Closing Date.
(b) ANNEX 4.10(b) sets out a complete and accurate list of each parcel
of real property leased by the Company or otherwise used (but not
owned) by it. In each case, the Company has a valid and subsisting
right to use the premises subject to the current conditions of use,
in each instance free and clear of all Encumbrances other than
Permitted Encumbrances.
(c) There are no zoning, condemnation or expropriation Proceedings
pending or to the Seller's best knowledge threatened that would
preclude or materially impair the use of any property owned, leased
or used by the Company.
(d) The buildings and other facilities or installations owned by the
Company are not built or situated on land not owned by the Company.
4.11. Movable Property and Business.
(a) Except as set out in ANNEX 4.11(a), the Company either owns free and
clear of all Encumbrances other than Permitted Encumbrances, or uses
under the terms of a valid operational or financial lease, all
movable property, machinery and equipment that it uses (including,
without limitation, the movable property obtained from the IVIMA
facility and currently used by the Company).
(b) The computers, equipment, servers, communications networks and
computer facilities and hardware necessary for the running and
operation of the Company's business are in good working order, have
received proper maintenance to assure their good working order and
do not have nor is there reason to believe that they may have any
defects that could materially affect their performance or limit the
undertaking of the activities of the business taken as a whole.
(c) ANNEX 4.11(c) sets out a complete and accurate list of all assets
owned or leased by the Company and used by Printglass. The Company
either owns all such assets free and clear of all Encumbrances other
than Permitted Encumbrances or has entered into financial leases for
such assets.
4.12. Intellectual Property Rights.
(a) ANNEX 4.12(a) sets out a complete and accurate list of all
Intellectual Property Rights that the Company owns. All such
Intellectual Property Rights are valid and free from any
Encumbrances (other than Permitted Encumbrances), and
15
the Company has made all filings, payments and formalities necessary
to ensure that they have full and exclusive ownership of such
Intellectual Property Rights, enforceable against third parties. No
license or right to use of any of the Intellectual Property Rights
set out therein has been granted to any Person other than the
Company.
(b) ANNEX 4.12(b) sets out a complete and accurate list of all
Intellectual Property Rights that the Company uses under license.
(c) The Company is not infringing or has not infringed, or is not
participating or has not participated in any infringement of, any
Intellectual Property Rights of any other Person. There are no
adverse claims with respect to any Intellectual Property Rights,
either owned or licensed, that are currently pending. To the
Seller's best knowledge, no Person is infringing any Intellectual
Property Rights of the Company.
(d) To the Seller's best knowledge, there are no valid grounds for any
bona fide claim: (i) to the effect that the use, sale or licensing
of any product or process as now used, sold or licensed by the
Company infringes any Intellectual Property Right of any other
Person; (ii) against the use by the Company of any Intellectual
Property Right of any other Person; (iii) challenging the ownership
or validity of any Intellectual Property Right of the Company; or
(iv) challenging the license or legally-enforceable right to use any
Intellectual Property Right that the Company uses under license.
4.13. Receivables. Except for amounts specifically reserved for in the Financial
Statements, all accounts receivable set out in the Financial Statements
and all other rights of payment, including, without limitation, unbilled
amounts and credits extended to third parties acquired by the Company
between September 30, 2004, and the date hereof or the Closing Date, as
applicable, (a) have arisen from bona fide transactions in the Ordinary
Course of Business, (b) are free from any Encumbrances, and (c) to the
Seller's best knowledge should be collectible in full within six (6)
months from the date such right to payment arose; provided, however, that
nothing herein may be construed as an express -------- ------- or implied
warranty by the Seller in respect of actual collection of any such
accounts receivable.
4.14. Inventory. The inventory set out in the Financial Statements and all
inventory acquired by the Company between the date of the Financial
Statements and the date hereof consist of raw materials, cartons,
semi-finished and finished products that are usable and/or saleable in the
Ordinary Course of Business for the purpose for which they were produced,
subject to the percentage for depreciation of inventory as consistently
recorded by the Company, and in quantities sufficient for the usual
requirements of the Company and its customers. All inventory that was not
located on the Company's site as of December 31, 2004, is set forth on
ANNEX 4.14.
4.15. Contracts. ANNEX 4.15 sets out a complete list of all Contracts (setting
forth only with respect to oral agreements an indication of the purpose of
the Contract, the names of the parties thereto, its duration (definite or
indefinite) and the amounts involved thereunder) falling under any of the
following categories:
16
(a) Contracts (including customer contracts) involving the Company's
obligation to pay, or entitlement to receive, under the normal
course of such Contracts, a total amount in excess of fifty thousand
euro ((euro) 50,000) or the equivalent thereof in any other
currency, calculated on the date hereof;
(b) Contracts, the term of which exceeds one (1) year or is unlimited in
duration (with the exception of labor agreements), that the Company
may not terminate on less than three (3) months' notice without
payment of an indemnity;
(c) Contracts giving rise to the payment by the Company of fees or any
other consideration to the other party (or to any entity or
individual connected therewith), other than as provided in Section
4.15(l), in consideration for business referred or otherwise
provided to the Company by such party;
(d) Contracts providing for the sharing of profits, the payment of
commissions, or the payment of any amounts based on profits or
revenues;
(e) Contracts under which the Company is bound not to carry out, or to
restrict the performance of, certain activities, or to refrain from
competing;
(f) Contracts granting exclusive rights;
(g) Any outstanding loans granted by the Company;
(h) Guarantees, sureties, warranties and credit support agreements given
by (i) the Seller or its Affiliates for the benefit of the Company
or (ii) the Company, excluding guarantees to secure utility
purchases or rental payments unless such guarantees are to or for
the benefit of the Seller or its Affiliates.
(i) Contracts that do not fall within the scope of the Company's
Ordinary Course of Business, or which have been entered into under
conditions other than those usually granted to independent parties,
or which do not reflect market conditions or normal commercial
practices;
(j) Contracts relating to the holding and/or transfer of securities or
interest in any entity or to the control or management thereof;
(k) Contracts with the Seller or any of the Seller's Affiliates other
than those in the Ordinary Course of Business;
(l) Representative, agency, distribution or sales contracts;
(m) Contracts relating to the rebuilding or the repairing of the
Company's furnace(s) or the reconfiguration of its machines,
involving the Company's obligation to pay, or entitlement to
receive, under the normal course of such Contracts, a total amount
in excess of fifty thousand euro ((euro) 50,000) or the equivalent
thereof in any other currency, calculated on the date hereof; and
(n) Contracts for the supply of raw materials, electricity, mold repair
services, natural gas or packaging materials, involving the
Company's obligation to pay, or entitlement to receive, under the
normal course of such Contracts, a
17
total amount in excess of fifty thousand euro ((euro) 50,000) or the
equivalent thereof in any other currency, calculated on the date
hereof.
All such Contracts, together with the leases under Sections 4.10(b) and
4.11(a), licenses under Section 4.12(b), Government Incentive Contract
under Section 4.17, and collective bargaining agreements and employment
contracts under Sections 4.19(b) and 4.19(d), are valid and binding and in
full force and effect, and the Company is in a position to obtain
enforcement of the terms thereof. The Company is not in material breach of
any such Contract and has not waived any right under any such Contract
that could have a material adverse effect on the Company, and the Company
has not received any notice of breach, default, acceleration or transfer
under any such Contract. To the Seller's best knowledge, no other party to
any Contract is in material default thereunder.
4.16. Bonus Programs. ANNEX 4.16 sets out a complete and accurate list of all
incentive, bonus, rappel and similar programs with customers of the
Company currently in effect.
4.17. Subsidies. ANNEX 4.17 sets out a complete and accurate list of all
Subsidies that impose on the Company any obligations or conditions that
remain in effect as of the date hereof or that will come into effect
hereafter, setting out the amounts received as of the date hereof and any
amounts remaining to be dispensed thereunder. The Company is not in breach
of any of the terms and conditions of any Subsidy and does not anticipate
being in breach based on current conditions, in either case that would
result in a material adverse effect on the Company.
4.18. Insurance. ANNEX 4.18 sets out a complete list of the insurance policies
of the Company. The corresponding premiums have been duly paid and the
Company has complied in all material respects with the provisions thereof.
The continuity and cost of the coverage provided by those policies shall
not be affected by the sale of the Original Shares or the Remaining Shares
to the Purchaser. Except as set forth on ANNEX 4.18, there is no insurance
claim pending and, to the Seller's best knowledge, there are no
circumstances likely to give rise to any such claim.
4.19. Employment Matters.
(a) There are no current or pending collective or individual labor
disputes with the employees of the Company and, to the Seller's best
knowledge, no such collective or individual disputes are threatened.
(b) ANNEX 4.19(B) sets out, for the Company:
(i) all applicable collective bargaining agreements;
(ii) the compensation scheme, including premiums, bonuses,
commissions, fringe benefits (without limitation, automobiles
and cellular telephones supplied by the Company) and any other
acquired rights, applicable to all of the employees or certain
categories thereof; and
(iii) the profit-sharing, incentive, stock-option, company savings
and other similar plans,
18
and no changes have been made by the Company to the rights granted
collectively by it to its employees since January 1, 2004.
(c) ANNEX 4.19(c) sets out a list of all employees of the Company,
listing the name, age, date of hire, type of employment contract and
length of service, professional category, gross annual compensation,
and corresponding benefits. Except as set out in ANNEX 4.19(C), no
person is an employee of the Company or may claim such status due to
any events occurring or circumstances arising on or prior to the
Closing Date or due to continuing events that started on or prior to
the Closing Date.
(d) Except for employment contracts with temporary and term employees,
copies of which are set out in ANNEX 4.19(d), the Company has not
entered into any other written employment agreements that are
currently in effect.
(e) Except as set out in ANNEX 4.19(e), the Company did not undertake
vis-a-vis its directors, collaborators or employees to pay any
amount, as increased wages or termination payment in excess to
amounts required by Law. ANNEX 4.19(e) sets forth any additional
benefits granted to such persons since January 1, 2004, with the
exception of compulsory salary increases made pursuant to the terms
of any applicable collective bargaining agreement or as otherwise
required by Law.
(f) There are no outstanding undertakings or obligations vis-a-vis
former employees or corporate officers of the Company.
(g) There are no obligations of the Company vis-a-vis bodies
representing its employees, insofar as such obligations exceed those
provided for by applicable Law or the collective status referred to
in Section 4.19(b).
(h) No claim has been made against the Company by any relevant authority
for failure to comply with labor rules and regulations that is not
fully and finally settled, nor are, to the best knowledge of the
Seller, claims of such type anticipated.
(i) Neither the Seller nor the Company has undertaken to grant any
benefits to any employee or corporate officer of the Company as a
result of the completion of the sale of the Shares contemplated
hereunder.
(j) The Company has not made any commitment vis-a-vis its employees in
connection with any future dismissal or reorganization.
(k) The Company is and has been in compliance in all material respects
with all provisions of labor and Social Laws, the collective status
described in Section 4.19(b), and individual employment contracts,
including payment of any amounts due from the retroactive salary
increase as from due January 1, 2004, and obligations as towards the
relevant labor authorities, including communications, notifications
and authorizations.
19
(l) No senior executive or key employee of the Company has declared his
or her intention to resign, and no senior executive or key employee
of the Company has resigned since the date three (3) months before
the date hereof.
4.20. Pension and Other Employee Benefit Matters.
(a) ANNEX 4.20(a) sets out a complete and accurate list of all pension,
pre-pension, health, disability and other employee benefit
commitments of the Company other than the Plan (as defined below).
(b) A copy of the Company's updated defined benefit pension and
disability plan established to grant or to have granted pensions to
current or former employees of the Company (the "PLAN") is attached
as ANNEX 4.20(b). As of the date hereof and as of Closing, the
Liabilities, whether due or to become due, for present or former
employees of the Company under the Plan are and will be adequately
funded under Portuguese GAAP and consistent with all statutory and
regulatory pension funding obligations.
(c) A copy of the latest Certified Actuarial Report, which certifies as
of April 30, 2004, the adequacy of the Plan reserves for the pension
responsibilities of the Company, is attached as ANNEX 4.20(c). Since
the date of such report, the Company has not granted, committed to
or agreed to any salary raises or other adjustments to pensionable
salaries that will or could result in back service or future service
payment obligations.
(d) The Company was granted authorization by the applicable regulatory
authorities for the incorporation of a new defined benefit pension
and disability plan, a copy of which is attached as ANNEX 4.20(d).
The Plan's assets that were transferred to such new plan are
sufficient to fund the Liabilities, whether due or to become due,
for present or former employees of the Company under the Plan and
are adequately funded under Portuguese GAAP and consistent with all
statutory and regulatory pension funding obligations.
(e) The Plan is the only collective and/or individual pension or
disability scheme to which the Company is obligated to make any
contribution or otherwise fulfill any commitment. Other than the
Plan, the Company has no Liability (whether due or to become due)
for any pension, pre-pension, health, disability or other employee
benefit commitments or plans of the Seller or any of the Seller's
Affiliates.
(f) All contributions to the Plan are and have been made in full, and
all other obligations of the Company under the Plan have been fully
satisfied, in a timely manner.
(g) There are no current or pending Proceedings regarding the Plan, or
the implementation thereof, and to the Seller's best knowledge, no
such Proceedings are threatened.
20
4.21. Tax; Social Security; Customs.
(a) The Company has timely filed and maintained true, accurate and
complete Tax and Social reports, returns, notices and other
documentation as required by applicable Laws, has withheld from its
employees and timely paid to the appropriate Governmental Authority
proper and accurate amounts for all periods through the date hereof
as required by applicable Tax withholding provisions of applicable
Laws, and has otherwise complied in all material respects with all
applicable Tax and Social Laws.
(b) The Company has timely paid all Taxes and Social Charges that became
due before the date hereof. The reserves appearing on the books of
the Company at the Closing Date are sufficient to pay all Taxes and
Social Charges due or that may become due with respect to the period
covered thereby, regardless of whether the liability for such Taxes
is disputed.
(c) No Tax or Social audit or inquiry relating to any Taxes for which
the Company is or may be liable is pending, and the Company has not
received any information request or similar notice from said
authorities, which remains unsatisfied or unresolved. To the
Seller's best knowledge, no such audit or inquiry is threatened.
(d) The Company is not bound by any undertaking or obligation given in
consideration for any Tax or Social benefit or Consent. The Company
does not own any asset (i) the tax value of which is less than its
net book value, (ii) which is subject to any holding obligation, or
(iii) to which any Tax or Social Liability (whether due or to become
due) not shown in the Financial Statements is attached. The
information provided and the representations made to the Tax or
Social authorities by the Company in connection with the obtaining
of any Tax or Social benefits or Consents enjoyed by them were true,
accurate and complete in all material respects. The incentive and
other similar plans enjoyed by the employees of the Company duly
qualify for the Tax and Social exemptions normally applicable to
them.
(e) The Company is entitled to the Tax and Social receivables (including
the carry-back receivables) described in ANNEX 4.21(e).
(f) The distributable reserves and other distributable amounts appearing
in the Financial Statements may be distributed without any Tax
burden for the Company.
(g) The Company has not been made aware by its tax counsel (external or
in-house) or auditors that a position it has taken on certain Tax or
Social matters is based on an interpretation of the Tax rules and
regulations likely to be challenged by the Tax or Social
authorities.
(h) The Company has not made any Tax elections that are still in effect
(including, but not limited to corporate income tax and V.A.T.).
21
(i) The Company has not assumed or is not bound to assume the Tax
Liabilities of any other Person or to indemnify such Person for such
Tax Liabilities (whether due or to become due).
4.22. Environment.
(a) No activities of the Company and no facilities or properties owned,
leased, used or operated by it at any time between March 29, 1996,
and the Closing are or have been the source of any pollution,
contamination or Release that would violate or require remediation
under any applicable Law.
(b) None of the land, premises or facilities owned, leased, used or
operated by the Company as of or at any time between March 29, 1996,
and the Closing are contaminated or polluted in a way that would
violate or require remediation under any applicable Law.
(c) No dangerous or toxic wastes or substances are or have been stored
or treated on land owned, leased, used or operated by the Company as
of or at any time between March 29, 1996, and the Closing. The
Company has not shipped or transported or caused the shipment or
transportation of any dangerous or toxic wastes or substances. The
Company has not disposed or caused the disposal of wastes on sites
other than those designed for their storage, treatment or
destruction and in compliance with applicable Laws.
(d) There are no prohibitions, injunctions, restrictions or limitations
of any nature whatsoever on the free use or disposal by the Company
of any of its movable assets or real property arising from their
environmental condition, and there are no facts or circumstances
that could reasonably provide a basis for any such prohibition,
injunction, restriction or limitation.
(e) The Company has obtained and is and, to the Seller's best knowledge,
has at all times between March 29, 1996 and the Closing been in
compliance in all material respects with all Permits that are
required under, and has complied in all material respects with all
applicable Laws relating to, public health and safety, worker health
and safety, and pollution or protection of the Environment,
including Laws relating to Releases of pollutants, contaminants or
chemical, industrial, hazardous or toxic materials or wastes or
otherwise relating to the testing, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or chemical, industrial,
hazardous or toxic materials or wastes. All such Permits are valid
and in full force for the operation of the Company's business as
currently conducted and, where applicable, timely renewal
applications have been submitted for all such Permits.
(f) The Company is not liable with respect to matters covered under this
Section 4.22 for any other Person.
4.23. Litigation and Proceedings. Except as set out in ANNEX 4.23, there are no
current or pending Proceedings to which the Company is a party or in which
the Company is otherwise involved, in each case for which the Company is
or could be reasonably expected to be liable for amounts in excess of two
thousand five hundred euro
22
((euro) 2,500), and no such Proceedings are, to the Seller's best
knowledge, threatened. There are no Judgments in force or outstanding
against the Company.
4.24. Product Liability.
(a) The Company has not been ordered or requested by any Governmental
Authority or judicial authority, or by any professional or consumer
body whatsoever, to recall any product manufactured or marketed by
it, or to inform the users thereof of the existence of any defect in
any such product or danger caused by, or related to, its use. The
Company does not anticipate proceeding with a spontaneous recall of
any of its products.
(b) To the Seller's best knowledge, there are no grounds for the
liability of the Company in respect of products manufactured or
marketed by the Company.
4.25. Bank Accounts and Signature Powers. ANNEX 4.25 sets out a complete and
accurate list of the bank accounts and safe deposit boxes opened in the
name of or for the benefit of the Company, with the names of the persons
authorized to operate such accounts or to have access to such deposit
boxes, as well as a list of all of the powers of attorney granted by the
Company.
4.26. Intermediaries. All negotiations relating to this Agreement have been
carried out without the involvement of any person acting on behalf of the
Seller, the Purchaser or the Company in a manner that could give rise to
any valid claim against the Company or the Purchaser for any broker's or
finder's fee or similar compensation in connection with the transactions
contemplated hereby.
4.27. Customer-owned Molds. ANNEX 4.27 sets out a complete and accurate list of
all molds used by the Company and owned by customers of the Company.
4.28. Completeness of Representations and Warranties. The Seller has not omitted
to disclose to the Purchaser any facts that (i) would be necessary to make
the information contained in this Agreement and its annexes not misleading
in any material respect, or (ii) might reasonably have caused the
Purchaser not to enter into the Transaction, or to have entered into the
Transaction on materially different terms. Where representations and
warranties in this Article 4 are subject to the Seller's best knowledge,
the Seller has made reasonable efforts to obtain from Messrs. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇, Ms. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Aires, Ms. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, and the Company's directors and professional advisors all
relevant information, and in making those representations and warranties
the Seller has relied upon the information so obtained by it.
ARTICLE 5
COVENANTS OF THE PURCHASER
5.1. Best Efforts Undertaking. The Purchaser shall use its best efforts to
take, or cause to be taken, all actions and to do, or cause to be done,
all things reasonably necessary, proper or advisable under all applicable
Laws to cause each of the conditions to Closing set out in Article 9 to be
satisfied and to consummate and make effective the Transaction. In case at
any time after Closing any further action is necessary or
23
desirable to carry out the purposes of this Agreement, the Purchaser shall
use its best efforts to take or cause to be taken any such action.
5.2. Confidentiality. From the date hereof through and including the Closing
Date, the Purchaser shall refrain from providing any third parties with
any Confidential Information whatsoever concerning the Company, other than
(a) as required by applicable Law or otherwise necessary in relation to
the Merger Notification or to a courtesy notification to the antitrust
authorities in the United States, or (b) as necessary to undertake the
actions specifically contemplated by this Agreement. If this Agreement is
terminated in accordance with Section 9.4, the Purchaser will, at the
Seller's option, (a) promptly deliver to the Seller all documents
furnished to the Purchaser or its representatives by or on behalf of the
Seller (and all copies thereof) containing Confidential Information or
destroy the same and send to the Seller written confirmation of such
destruction and (b) destroy all documents prepared by it or its
representatives that contain or reflect Confidential Information and send
to the Seller written confirmation of such destruction; provided, however,
that the Purchaser may retain one copy of any such document in its files
for internal recordkeeping and accounting purposes only. Notwithstanding
the return or destruction of the Confidential Information and the
termination of this Agreement, the Purchaser and its representatives will
continue to be bound by this Section 5.2 until the second anniversary of
the date hereof.
5.3. Restricted Actions; Board of Directors. During the Initial Earn-out
Calculation Period and the Extended Earn-out Calculation Period, if
applicable:
(a) the Purchaser shall have the sole authority to manage and operate
the business of the Company; provided; however, that the Purchaser
shall ensure that the Company shall not enter into any transactions
that are not arms' length or that constitute illegal transfer
pricing;
(b) the Purchaser agrees not to take and to prevent the Company from
taking actions for the primary purpose of adversely affecting the
Seller's contingent payment rights to the Performance Payment and
the Earn-out Payment; and
(c) the Board of Directors (Conselho de Administracao) of the Company
shall meet no less frequently than twice per year, to resolve upon
matters that it is required to act upon by Law. The Purchaser shall
ensure that all Board members timely receive monthly management
reports generally consistent with prior practice.
5.4. Board Member. Until the Remaining Shares Purchase Date, the Seller shall
have the right to appoint a member to the Board of Directors of the
Company, such person to be appointed with the consent of the Purchaser,
which shall not to be unreasonably withheld; it is understood that such
board position shall entail no executive powers in relation to the Company
and the member appointed by the Seller shall not be entitled to any
remuneration in such capacity from the Company.
24
ARTICLE 6
COVENANTS OF THE SELLER
6.1. Best Efforts Undertaking. The Seller shall use its best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all
things reasonably necessary, proper or advisable under all applicable Laws
to cause each of the conditions to Closing set out in Article 9 to be
satisfied and to consummate and make effective the Transaction. In case at
any time after Closing any further action is necessary or desirable to
carry out the purposes of this Agreement, the Seller shall use its best
efforts to take or cause to be taken any such action.
6.2. Confidentiality and Exclusivity. From the date hereof through and
including the Closing Date, the Seller shall refrain, and shall cause the
Company to refrain, from providing any third parties with any information
whatsoever concerning the Company, other than (a) within the course of the
Seller's Ordinary Course of Business, (b) as required by applicable Law or
otherwise necessary in relation to the Merger Notification, or (c) as
necessary to undertake the actions specifically contemplated by this
Agreement. During the same period, the Seller shall refrain from
initiating or continuing, either directly or indirectly, with any Person
other than the Purchaser, any negotiations concerning the sale of all or
part of the Shares, or of any part of the business of the Company.
6.3. Management of the Company. From the date hereof through and including the
Closing Date, except as expressly and specifically envisioned in this
Agreement, the Seller shall cause the Company:
(a) to take each of the actions described in Section 4.8(b)(i) and not
to take any of the actions described in Sections 4.8(a)(i) through
4.8(a)(ii) and Sections 4.8(b)(iii) through 4.8(viii);
(b) without prejudice to the generality of the foregoing, not to (i)
enter into any employment agreement with any Person; (ii) adopt,
enter into, amend in any material respect, announce any intention to
adopt or terminate any collective bargaining or similar agreement or
other employee benefit plan, program or arrangement of general
applicability; or (iii) make any capital expenditures in excess of
one hundred thousand euro ((euro) 100,000);
(c) not to change the rights granted by the Company collectively to its
employees as described in Annex 4.19(b), nor grant any additional
benefit to any of its directors, consultants or employees, with the
exception of compulsory salary increases made pursuant to the terms
of any applicable collective bargaining agreement or as otherwise
required by Law; and
(d) to give written notice to the Purchaser of any additional borrowings
made or funds received under the Government Incentive Contract.
6.4. Non-competition and Non-solicitation.
(a) For three (3) years following the Closing Date, the Seller shall not
undertake, directly or indirectly, personally or through Affiliates
or other individuals or entities, whether or not for compensation,
throughout the territory where the
25
Company is active, any activity that might compete with that of the
Company except for the sale of the Company's products in outlet
stores owned by the Seller or any of its Affiliates, or cooperate in
any manner whatsoever with any company that competes with the
Company; and
(b) Except as specifically contemplated by this Agreement, for two (2)
years following the Closing Date, the Seller shall not employ or
solicit for employment, either directly or indirectly, employees of
the Company, or incite any of those employees to leave any position
they occupy now or in the future with the Company.
6.5. Employee Notification. The Seller shall not provide any information to
employee representatives concerning the Purchaser and its plans for the
Company without the Purchaser's prior written approval.
6.6. Access and Information. From the date hereof until the Closing, the Seller
shall cause the Company to grant the Purchaser and its representatives,
without unduly interfering with the normal operations of the Company,
access to the books, records, management, consultants, facilities,
properties and assets of the Company (and those of the Seller to the
extent that its books, records, management personnel, consultants,
facilities and assets relate to the Company's business) to enable them to
conduct such additional audits, reviews, evaluations and investigations as
the Purchaser may reasonably request. The Seller shall cause the Company
to produce regular monthly reports on deadlines consistent with historical
practice and will provide the Purchaser with copies of such reports as
soon as possible but in no event later than five (5) days after their
production. At the option of the Purchaser, the Seller shall (and shall
cause the Company to) assist the Purchaser in preparing a reconciliation
of the 2003 Financial Statements to U.S. GAAP.
6.7. Cancellation of Related-Party Contracts and Satisfaction of Debts. Except
as specifically envisioned by this Agreement, the Seller shall, on or
before the Closing Date:
(a) repay or procure the repayment to the Company of any debt owed to
the Company, including trade accounts payables, by any of the
Seller, its Affiliates or any Related Person thereof, including
interest thereon (if any) through the Closing Date, without any
penalty for prepayment;
(b) terminate or procure the termination of, without any penalty or
payment by, or Liability (whether due or to become due) to, the
Company, all Contracts between any of the Seller, its Affiliates or
any Related Person thereof, on the one hand, and the Company, on the
other hand; and
(c) procure the full release, without any Liability (whether due or to
become due) to the Company, effective as of the Closing Date, of all
past, present or future primary or guarantor obligations of the
Company, in any form whatsoever, including as joint and several
obligor, that benefit in whole or in part the Seller, its Affiliates
or any Related Person, on terms reasonably satisfactory to the
Purchaser, and provide the Purchaser with evidence reasonably
satisfactory to the Purchaser that the Company has been released
from its obligations.
6.8. Waivers. The Seller shall obtain that, on the Closing Date, all persons
that have entered into any Contract entitling them to terminate such
Contract in the event of a change of control of the Company shall have
waived such right in writing in connection with the transactions provided
for herein.
6.9. Assistance with Regard to Relationships. During the Initial Earn-out
Calculation Period, the Seller shall use reasonable commercial efforts to
assist the Company in maintaining its relationships with customers,
government authorities, suppliers, and banks.
6.10. Further Agreements.
(a) Until the earlier of the first anniversary of the Closing Date and
the date on which Mr. Antonio ▇▇ ▇▇▇▇▇ is no longer employed by the
Seller or one of its Affiliates, the Seller agrees to make available
(or to cause its Affiliates to make available) the services of ▇▇.
▇▇ ▇▇▇▇▇ for twelve (12) hours per month (approximately three (3)
hours per week) to assist in the financial oversight of the Company.
(b) Until the Remaining Shares Repurchase Date and at the option of the
Purchaser, the Seller shall assist (in a manner reasonably
consistent with past practice) the Company in negotiations with the
Glass-Industrial Sector - Cristal Industry (Sector Vidreiro -
Industria de Cristalaria). Any out-of-pocket expenses incurred by
the Seller in providing such assistance shall be reimbursed to the
Seller by the Company.
(c) For a period of ninety (90) days following the Closing Date, the
Seller shall (and shall cause its Affiliates to) provide the Company
with transitional administrative services, such as human resources
support, information technology support and the forwarding of
electronic mail delivered to the Seller's corporate server,
reasonably required by the Company to allow the Company to conduct
its business as currently conducted and to facilitate an orderly
change of control, on such terms as are customary for these types of
administrative services; provided that the human resources support
shall correspond to the level of services previously available to
the Company as was provided by ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇
▇▇▇▇▇ and the amount the Company shall pay to the Seller for such
equivalent support shall not exceed the amount that would have been
paid to ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for the same services; and provided
further that if any costs are imposed by Law on the Company,
including Social Charges, pensions, employee benefits or severance
costs, in relation to any person providing transitional
administrative services, the Seller shall pay all such costs.
6.11. Transfer Pricing File. On or before the Closing Date, the Seller shall
prepare and deliver to the Purchaser a file documenting and substantiating
the 2002 and 2003 transactions between the Company and the Seller, the
Seller's Affiliates and any Related Person, as required under applicable
Law, including Article 58 of the Portuguese Corporate Income Tax Code.
6.12. Remaining Shares. Until the Remaining Shares Purchase Date, the Seller
shall hold the Remaining Shares free and clear of any Encumbrances.
27
6.13. Intellectual Property. The Seller shall take any and all measures
necessary to ensure that (a) as of the Closing Date, the Company shall
have the software licensing rights, source codes, maintenance contracts,
hardware and other assets necessary to operate twenty-five (25) BAAN
seats, and (b) as soon as possible after the Closing Date, all
Intellectual Property listed on Annex 4.12(a) is registered in the name of
the Company with the applicable Governmental Authority.
6.14. Governmental Authorities. The Seller shall use its reasonable commercial
efforts to assist the Purchaser in negotiating new government incentive
Contracts after the Closing Date.
6.15. Government Incentive Contract. The Seller shall use its reasonable best
efforts and proceed in a diligent manner to terminate the Government
Incentive Contract as soon as possible and to settle the obligations
thereunder with no continuing obligation or Liability (whether due or to
become due) for the Company or the Purchaser (or any Affiliate of the
Purchaser).
6.16. Satisfaction of Indebtedness. The Seller shall cause the Company to have
no Indebtedness as of the Closing Date other than Indebtedness listed on
the Government Incentive Contract Statement or the Indebtedness Statement.
6.17. Receipts of Payment. Prior to the Closing Date, the Seller shall provide
the Purchaser with receipts for all payments made in relation to the
contracts for the repair of the Company's furnace number 1 and shall
ensure that the receipts for all payments in relation to the contracts for
the rebuild of the Company's furnace number 2, as well as the repair of
any equipment related thereto, are in the Company's possession.
ARTICLE 7
INDEMNIFICATION
7.1. Indemnification by the Seller. The Seller shall indemnify, defend and hold
harmless the Company and the Purchaser and its Affiliates and Related
Persons thereof (an "INDEMNIFIED PARTY") from and against any and all
Damages that may be imposed on, incurred by or asserted against an
Indemnified Party as a result of:
(a) any breach or inaccuracy of any representation or warranty of the
Seller hereunder, taking into account any exceptions, disclosures,
limitations and qualifications of such representation or warranty
made in the applicable Annex to Article 4;
(b) any breach of any covenant, undertaking or agreement of the Seller
contained in this Agreement, including any document entered into
pursuant to this Agreement;
(c) any Liability of the Seller or the Seller's Affiliates (other than
the Company) for which an Indemnified Party is liable as joint and
several obligor or otherwise (excluding any liability that is not
related to, or does not otherwise arise out of, this Transaction);
(d) any Indebtedness of the Company on the Closing Date not reflected on
the Closing Statement;
28
(e) any Liability of the Company on account of Social Charges, pensions
or other employee benefits, to any Person who ceased to be an
employee of the Company before the Closing Date;
(f) any claim made by Printglass with respect to retention or similar
rights over the property listed in Annex 4.10(a) and Section 4.11(c)
and any claim by employees of Printglass for employment status with
the Company due to events occurring or circumstances existing on or
prior to the Closing Date or due to continuing events that started
on or prior to the Closing Date;
(g) any one-time, annual or maintenance fees incurred on or prior to the
Closing Date and billed retroactively after the Closing Date related
to the software contracts currently used by the Company; and
(h) any claim for Liability in relation to the contract entered into
between Crisal - Cristais de Alcobaca, SA, and Instituto de Apoio as
Pequenas e Medias Empresas e ao Investimento, dated June 7, 1996.
7.2. Indemnification by the Purchaser. The Purchaser shall indemnify, defend
and hold harmless the Seller and its Affiliates and Related Parties
thereof (an "INDEMNIFIED PARTY"), from and against any and all Damages
that may be imposed on, incurred by or asserted against an Indemnified
Party as a result of:
(a) any breach or inaccuracy of any representation or warranty of the
Purchaser hereunder; and
(b) any breach of any covenant, undertaking or agreement of the
Purchaser contained in this Agreement, including any document
entered into pursuant to this Agreement.
7.3. Environmental Matters.
(a) Subject to paragraphs (b) and (d) of this Section 7.3, the Seller
shall indemnify, defend and hold harmless the Purchaser (by way of a
payment to be made to the Purchaser or the Company, at the
Purchaser's direction) from and against any and all Damages that may
be imposed on, incurred by or asserted against the Company as a
result of any of the following events and circumstances, to the
extent that they occurred or existed at any time on or before the
Closing Date:
(i) any pollution, contamination or Release that would violate or
require remediation under any applicable Law, the source of
which is or was any activity of the Company or any property
owned, leased, used or operated by it;
(ii) any pollution or contamination of any land, premises or
facilities owned, leased, used or operated by the Company that
would violate or require remediation under any applicable Law;
(iii) any storage or treatment of dangerous or toxic wastes or
substances on land owned, leased, used or operated by the
Company in a manner that would violate any applicable Law;
29
(iv) any shipment or transportation of any dangerous or toxic
wastes or substances by the Company or at its direction in a
manner that would violate any applicable Law;
(v) any disposal of wastes by the Company or at its direction in a
manner that would violate any applicable Law; and
(vi) any failure of the Company to obtain, maintain in full force
for the operation of the Company's business, submit timely
renewal applications for and comply with all Permits required
under applicable Environmental Laws.
(b) The Seller shall be obligated to make indemnification payments for
claims arising out of the matters set out in this Section 7.3 only
if the aggregate amount of such claims exceeds one hundred
seventy-five thousand euro ((euro) 175,000); provided that, in the
event this threshold is exceeded, the full amount of all such Claims
shall be indemnified; provided, however, that the Seller shall be
obligated to make indemnification payments for any and all amounts
relating to Proceedings, including any costs of remediation,
initiated on or before the Closing Date.
(c) No disclosure by the Seller or any other Person, whether in this
Agreement or otherwise, pertaining to the matters set out in Section
7.3(a), shall qualify or limit the Seller's obligations under this
Section 7.3.
(d) The Purchaser shall not make any claim to the Seller regarding the
cost of the installation of air emissions equipment with respect to
the Company's furnaces nor claim from the Seller any Damages which
may have resulted from the failure by the Purchaser or the Company
to apply after the Closing Date the amount of two hundred fifty
thousand euro ((euro) 250,000) referred to in Section 1.2(a)(i) to
the acquisition and installation of such environmental equipment,
including any Damages resulting from emissions after the Closing
Date from these furnaces.
7.4. Notification and Payment of Claims. All claims made by an Indemnified
Party hereunder (a "CLAIM") shall be made in writing in a notice (a "CLAIM
NOTICE") to the Seller or the Purchaser, as applicable (the "INDEMNIFYING
PARTY"), providing in sufficient detail the reasons for the claim and the
amount to be indemnified, if it may be determined, or an estimate thereof
(which estimate shall not be conclusive of the final amount of the Claim).
If the Indemnifying Party does not notify any objection to the Claim to
the Indemnified Party within thirty (30) days of the Indemnifying Party's
receipt of a Claim Notice, the related indemnification shall become due
and payable. If the Indemnifying Party notifies an objection to the Claim
to the Indemnified Party within thirty (30) days of the Indemnifying
Party's receipt of a Claim Notice, the parties shall settle the Claim in
accordance with Article 10.
7.5. Third Party Claims.
(a) In the event a Claim is made as a result of or in connection with a
Proceeding instituted by a third party (a "THIRD PARTY CLAIM"), the
Indemnified Party shall send to the Indemnifying Party a copy of the
related claim notice (a
30
"THIRD PARTY CLAIM NOTICE") promptly; provided, however, that any
delay in sending such a Third Party Claim Notice shall not result in
the Indemnified Party forfeiting any right hereunder, but may result
only in the payment of Damages to the Indemnifying Party, to the
extent that the Indemnifying Party establishes that such delay has
actually prejudiced its defense against such Third Party Claim.
(b) The Indemnifying Party may notify the Indemnified Party of its
decision to participate in the defense of any Third Party Claim
within fifteen (15) days after receipt of the related Third Party
Claim Notice; provided, however, that such period may be shortened
at the Indemnified Party's reasonable request in order to comply
with any applicable procedural deadlines. If the Indemnifying Party
does not notify the Indemnified Party of such decision within such
period, it shall be deemed to have waived its right to participate
in the defense of such Third Party Claim. Any such waiver shall
authorize the Indemnified Party to defend against such Third Party
Claim as it sees fit, and in particular to enter into any
settlements, agreements or withdrawals, without prejudice to its
right to indemnification hereunder.
(c) If the Indemnifying Party notifies the Indemnified Party of its
intent to participate in the defense of a Third Party Claim within
the time period referred to in Section 7.5(b), and if the
Indemnifying Party acknowledges in writing that it is liable
hereunder for any Damages resulting from such Third Party Claim, the
Indemnified Party shall not, and shall cause its respective
Affiliates not to, enter into any settlement, agreement or
withdrawal in connection with such Third Party Claim without the
Indemnifying Party's prior consent, not to be unreasonably withheld.
(d) Regardless of whether the Indemnifying Party chooses to participate
in the defense of a Third Party Claim:
(i) the Indemnified Party shall allow the Indemnifying Party
reasonable access to information and documents relating
thereto; and
(ii) the Indemnified Party shall invite the Indemnifying Party to
participate, at the Indemnifying Party's expense, in all major
phases of the proceedings and, without prejudice to Section
7.5(c), in any strategic decisions to be taken in connection
with the defense against such Third Party Claim.
(e) The Indemnifying Party shall not enter into any settlement,
agreement or withdrawal in connection with any Third Party Claim
that would impose obligations on the Indemnified Party without the
Indemnified Party's prior written consent, not to be unreasonably
withheld.
7.6. Determination of the Indemnification Amount. Any indemnification payable
hereunder shall be equal to the entire amount of the Damages, subject to
the following:
(a) Any reassessment made by the Tax authorities, the sole consequence
of which is to shift a deductible or a taxable element from one
fiscal year to another,
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shall give rise to indemnification only to the extent of the
resulting effective Damages sustained by the Company, if any,
including, without limitation, penalties, interest, and increases in
Tax liability resulting from differing applicable Tax rates or the
transfer of a taxable element from a loss-making to a profit-making
year.
(b) The provisions of Sections 7.7 through 7.10, 7.12 and 7.13
hereunder.
7.7. Threshold. Subject to Section 7.10, the Seller shall not be obligated to
make any indemnification payment if the aggregate amount of the Claims
made by the Purchaser does not exceed four hundred thousand euro ((euro)
400,000), provided that, in the event this threshold is exceeded, the full
amount of all Claims shall be indemnified in accordance with this Article
7.
7.8. Deductible. Subject to Section 7.10, no indemnification shall be paid in
connection with any Claim for an amount less than fifteen thousand euro
((euro)15,000), and in any case only for the excess of any such Claims
over that amount; provided, however, that when the total of such Claims
equals or exceeds seventy-five thousand euro ((euro)75,000), such
deductible shall no longer apply and the Seller shall pay indemnification
for the full amount of all additional Claims, subject to Sections 7.7 and
7.9 and provided further that the Seller shall have no liability for
Claims for an amount less than one thousand five hundred euro
((euro)1,500). A series of Claims having the same cause shall be
considered together as one Claim for the purposes of this Section 7.8.
7.9. Maximum Amount. Subject to Section 7.10, the Seller shall not be obligated
to make any indemnification payment relating to Claims under Section 7.3
for any amount in excess of thirty percent (30%) of the sum of (a) the
Initial Payment (before the subtraction of any amounts relating to the
Government Incentive Contract or other Indebtedness pursuant to Section
1.2(a)(i)), (b) to the extent such payment has been made or is due at the
time the indemnification is payable, the Deferred Payment or the
Performance Payment, as applicable, and (c) to the extent such payment has
been made or is due at the time the indemnification is payable, the
Earn-out Payment (the sum of such payments, the "TOTAL PAYMENT AMOUNT");
provided that the Total Payment Amount shall be recalculated and applied
retroactively if the Deferred Payment, Performance Payment and/or Earn-out
Payment becomes due at a later date. Moreover, and subject to Section
7.10, the Seller shall not be obligated to make any indemnification
payments relating to Claims, other than Claims under Section 7.3, for
amounts which would exceed twenty-five percent (25%) of the Total Payment
Amount. For the avoidance of doubt, the aforesaid indemnification limits
of thirty percent (30%) and twenty-five percent (25%) shall not be
cumulative and indemnification will be limited to thirty percent (30%) or
twenty-five (25%), as the case may be.
7.10. Exceptions to Limitations on Indemnification.
(a) Sections 7.7, 7.8 and 7.9 shall not apply to Claims arising out of:
(i) breaches of the Seller's representations under Sections
4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.1(e), 4.2, 4.3(a), 4.4, or
4.21;
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(ii) breaches of the Seller's covenants and agreements set out in
Sections 6.4(a), 6.12, 8.8 and 8.9.
(iii) the matters set out in Sections 7.1(c), 7.1(d), 7.1(e), and
7.1(h).
(b) Sections 7.7 and 7.8 shall not apply to the Claims arising out of
the matters set out in Section 7.3 (subject, for the avoidance of
doubt, to Section 7.3(b)).
7.11. Interest. Any amounts due under this Article 7 shall automatically bear
interest at a rate per annum equal to EURIBOR for three (3) month
interbank loans plus two and a half percent (2.5%) calculated on the basis
of a three hundred sixty-five (365) day year and the actual number of days
elapsed, from the thirtieth (30th) day after the Indemnifying Party's
receipt of the first request for payment of such amount.
7.12. Deadlines for Claims.
(a) Any Claim for breach of a representation or warranty under Section
7.1(a) shall give rise to indemnification only to the extent that
the Indemnified Party notifies it to the Seller before the
expiration of a two-year period from the Closing Date; provided,
however, that Claims related to Tax and Social matters can be made
until the expiration of a one (1) month period after the expiration
of the relevant statute of limitations.
(b) Any Claims for breach of Section 7.3 can be made until December 31,
2012.
7.13. Release. The Seller shall not be released from any obligations under this
Article 7 as a result of (a) any knowledge that the Purchaser has or may
have had of such events, facts or circumstances, as a result, in
particular, of any investigations made by the Purchaser, its
representatives or its counsel, or (b) the approval of the yearly accounts
of the current fiscal year by the shareholders' meeting of the Company.
7.14. Duty to Mitigate. The Indemnified Party shall take reasonable steps to
mitigate the Damages under a Claim.
ARTICLE 8
FURTHER AGREEMENTS
8.1. Merger Notification. The Purchaser shall be responsible for the Merger
Notification. The Seller shall cooperate with the Purchaser in the
preparation of all forms, reports and information required in connection
with the Merger Notification and will deliver in due time and in an
expeditious manner all the documentation and information required for the
Merger Notification and such other information and documentation that,
from time to time, may be deemed necessary and/or requested by the
competition authorities.
8.2. Employee Issues. Within four (4) months of the Closing Date, the Purchaser
shall have the right, at its sole discretion, to give the Seller notice of
its intention to terminate the employment of any employee listed in ANNEX
8.2, and the Seller shall negotiate with such employee to obtain the
employee's agreement to transfer his or her employment to the Seller or an
Affiliate of the Seller. If the Seller is unable to obtain the consent of
such employee for such transfer within fifteen (15) days of such
33
notice, the Purchaser may terminate the employment of such employee and
the Seller shall pay all amounts relating to the termination, including
without limitation, any severance costs required by Law or by Contract
provisions in effect as of the Closing Date, including Social Charges,
pensions, and employee benefits.
8.3. Outlet Stores. On or before the Closing Date, the lease between the Seller
and the Company relating to the outlet store located on the Company's
property shall be terminated, all assets at the store, including
equipment, fixtures and inventory used for its operation in the ordinary
course consistent with past practice, shall be owned by the Company, and
the five employees listed on ANNEX 8.3 employed in the conduct of the
outlet store activities shall have been employed by the Company. The
Purchaser and the Seller shall (or, as applicable, the Seller shall cause
its Affiliates to) enter into (i) a commercial relationship providing for
the Company to sell the products of the Seller and/or its Affiliates in
the outlet store located on the Company's property on commercially
reasonable terms and (ii) a commercial relationship providing for the
Seller and/or its Affiliates, as applicable, to sell the Company's
products in all outlet stores owned by the Seller or its Affiliates on the
same terms and conditions as those currently in place.
8.4. Historical Data on BAAN. Until the expiration of the relevant statute of
limitations, the Purchaser shall cause the Company to use its best efforts
to retain, either on the BAAN systems or on downloaded flat files, the
historical data of the Seller that is stored as of the Closing Date on the
BAAN systems that are transferred from the Seller to the Company pursuant
to Section 6.13, and to provide the Seller and its Affiliates with
assistance in recovering such data; provided, that the -------- Seller, or
its Affiliates, as applicable, shall provide the Company with reasonable
notice of its or their data retrieval needs and the Company shall not be
required to incur unreasonable cost in fulfilling such requests, nor shall
it be obligated to provide more than eight (8) hours of service per month
without charge. The Seller shall pay to the Company an hourly rate of
fifteen euro ((euro)15) per hour for time spent by the Company's employees
on data retrieval in excess of eight (8) hours per month. The Company
shall have the right, in its sole discretion, to discontinue using BAAN,
without prejudice to the Purchaser's and the Company's rights and
obligations hereunder.
8.5. Supply of Non-Soda Lime Glassware and Ceramic Products. The Parties shall
enter into a commercial relationship under which the Seller shall sell to
the Company non-soda lime glassware, crystal and ceramic products.
8.6. IVIMA Warehouse. The Seller shall allow (or, as applicable, cause its
Affiliates to allow) the Company to use the warehouse at the IVIMA
facility in the same manner in which the Company has historically used
such warehouse for a period of six (6) months from the date hereof,
without charge.
8.7. Cancellation and Replacement of Guarantees. The Seller (and its
Affiliates) shall be entitled to cancel any guarantees, sureties,
warranties and credit support agreements listed on Annex 4.15 given by the
Seller (or any of its Affiliates) for the benefit of the Company; provided
that the Seller either (i) notifies the Purchaser of its intention to
cancel any such guarantee, surety, warranty or credit support on or before
the Closing Date, in which case the Purchaser shall (or shall cause an
Affiliate to) replace any such guarantee, surety, warranty or credit
support as soon as possible after the Closing Date and the cancellation
shall only become effective as of the date of replacement, or
34
(ii) notifies the Purchaser of its intention to cancel any such guarantee,
surety, warranty or credit support at such later date as the Seller may
elect in its sole discretion, provided that the Seller notifies the
Purchaser thirty (30) days or more in advance, in which case the
cancellation shall become effective as of such later date elected by the
Seller.
8.8. Government Incentive Contract.
(a) Reduction of Non-reimbursable Loans (incentivos nao reembolsaveis)
(i) If, after the Closing Date but before the date on which the
Closing Statement becomes final, either (a) the Company is
required to reimburse to the relevant Governmental Authority
any amounts that were characterized as non-reimbursable loans
(incentives nao reembolsaveis) on the Government Incentive
Contract Statement, or (b) such Governmental Authority
otherwise requires the Company to pay any amounts (including
interest, fees or penalties) in excess of those included in
Section 1.2(a)(i)(a), then the amount that has been
recharacterized or that the Company must pay shall be treated
as Closing Indebtedness for purposes of the Closing Statement.
(ii) If, on or after the date on which the Closing Statement
becomes final, either (a) the Company is required to reimburse
to the relevant Governmental Authority any amounts that were
characterized as non-reimbursable loans (incentives nao
reembolsaveis) for purposes of the Closing Statement, or (b)
such Governmental Authority otherwise requires the Company to
pay any amounts (including interest, fees or penalties) in
excess of those included as Indebtedness in the Closing
Statement, then the amount that has been recharacerized or
that the Company must pay shall be treated as a post-Closing
adjustment to the Closing Indebtedness and the Seller shall
pay such amount to the Company within five (5) days of
receiving notice from the Company that such amount is due.
(b) Additional Non-reimbursable Loans (incentivos nao reembolsaveis)
(i) If, after the Closing Date but before the date on which the
Closing Statement becomes final, either (a) the relevant
Governmental Authority characterizes any amount that was
treated as reimbursable loans (incentivos reembolsaveis) on
the Government Incentive Contract Statement as
non-reimbursable loans (incentivos nao reembolsaveis) under
the Government Incentive Contract, or (b) the Company receives
from such Governmental Authority in the form of cash any
non-reimbursable loans (incentivos nao reembolsaveis) under
the Government Incentive Contract that was not included in the
Government Incentive Contract Statement, then the amount that
has been recharacterized or received shall be treated as
Closing Cash for purposes of the Closing Statement.
(ii) If, on or after the date on which the Closing Statement
becomes final, either (a) the relevant Governmental Authority
characterizes any
35
amount that was treated as reimbursable loans (incentivos
reembolsaveis) for purposes of the Closing Statement as
non-reimbursable loans (incentivos nao reembolsaveis) under
the Government Incentive Contract, or (b) the Company receives
from such Governmental Authority in the form of cash any
non-reimbursable loans (incentivos nao reembolsaveis) under
the Government Incentive Contract, then the amount that has
been recharacterized or received shall be treated as a
post-Closing adjustment to the Closing Cash and the Purchaser
shall pay such amount to the Seller within five (5) days of
receiving or being credited such amount from the relevant
Governmental Authority.
(c) Late payments under this Section 8.8 shall bear interest at a rate
per annum equal to EURIBOR for three (3) month interbank loans plus
two and a half percent (2.5%) calculated on the basis of a three
hundred sixty-five (365) day year and the actual number of days
elapsed, from the date such payment was due.
8.9 Payments for Furnace Repair. If the Company receives any bills or invoices
associated with the repair of furnace number 1 due to the events having
occurred prior to the date hereof for amounts not listed on a statement
showing the Initial Payment calculation to be provided by the Seller on
the Closing Date, the Company shall promptly notify the Seller of any
bills or invoices it receives after the Closing Date related to such
repair, and the Seller shall pay to the Company such amounts concurrently
with the time at which they become due to third parties. The Seller shall
be entitled to any insurance proceeds collected by the Company from its
insurers in relation thereto. The Company shall pay the Seller an amount
equal to proceeds received from the insurance company relating to such
repair as soon as possible, but in no event later than five (5) days,
after the Company is aware that they have been received.
ARTICLE 9
CONDITIONS TO CLOSING; TERMINATION
9.1. Conditions to Each Party's Obligations. Each Party's obligation to
consummate the Transaction contemplated hereby at the Closing is subject
to the fulfillment to each Party's satisfaction on or before the Closing
Date of each of the following conditions:
(a) Approvals and Consents. All Consents required for the consummation
of the Transaction or for preventing the termination of any material
Permit, Contract, Consent or other right of the Company upon the
consummation of the Transaction shall have been obtained in writing
and shall be in full force and effect on the Closing Date.
(b) No judgment. No Judgment or Law shall be in effect preventing or
imposing any materially adverse conditions on the consummation of
the Transaction.
(c) No proceedings. No Proceeding that seeks, or may seek to prevent, or
questions the validity or legality of the Transaction shall be
pending or, to the extent that there is a reasonable basis for such
threat, threatened as of the Closing Date, and no Person shall have
given any notice, made any claim or
36
submitted any other communication to any Party threatening any such
Proceeding or otherwise seeking to prevent or questioning the
validity or legality of the Transaction.
9.2. Conditions to the Purchaser's Obligations. The Purchaser's obligation to
consummate the Transaction on the Closing Date is subject to the
fulfillment of each of the following conditions, to its reasonable
satisfaction, on or before the Closing Date. These conditions are for the
exclusive benefit of the Purchaser, which may waive such conditions, in
whole or in part, in writing at any time before the Closing.
(a) Representations and Warranties. The representations and warranties
of the Seller set out in this Agreement shall be true and correct in
all material respects on the date or dates as of which such
representations and warranties are made.
(b) Performance. The Seller and the Company shall have performed or
complied with each covenant, agreement and condition set out in this
Agreement that it is to perform or comply with on or before the
Closing Date.
(c) No Material Adverse Effect. The Company shall not have undergone or
suffered, between the date hereof and the Closing Date, any change
in its financial condition, income, properties, Liabilities (whether
due or to become due) or operations that has been, or could
reasonably be expected to be, individually or in the aggregate,
materially adverse to the Company.
(d) Contractual Waivers. The Seller shall have delivered to the
Purchaser evidence reasonably satisfactory to it of the waiver of
any right to terminate any Contract listed in Annex 4.15 by the
third party or parties entitled to such right to terminate such
Contract under applicable change in control provisions.
(e) Outlet Store. The lease relating to the outlet store located on the
Company's property shall have been terminated and the assets at the
outlet store shall be owned by the Company in accordance with
Section 8.3.
(f) Furnace Repair. The Seller shall have delivered to the Purchaser a
statement from ▇▇▇▇▇▇▇▇ ▇▇▇▇ GmbH & Co. KG confirming that the work
relating to the repair has been completed satisfactorily and
consistent with commercial standards.
9.3. Conditions to the Seller's Obligations. The Seller's obligation to sell
and transfer the Original Shares on the Closing Date is subject in
addition to the fulfillment of each of the following conditions, to its
reasonable satisfaction, on or before the Closing Date. These conditions
are for the exclusive benefit of the Seller, which may waive such
conditions, in whole or in part, in writing at any time before the
Closing:
(a) Representations and Warranties. The representations and warranties
of the Purchaser set out in this Agreement shall be true and correct
in all material respects on the date or dates as of which such
representations and warranties are made.
37
(b) Performance. The Purchaser shall have performed or complied with
each covenant, agreement and condition set out in this Agreement
that it is to perform or comply with on or before the Closing Date.
(c) Guarantee Letter. The Purchaser shall have obtained and delivered to
the Seller a guarantee letter from Libbey Inc. in the form attached
as Annex 2.2(c).
9.4. Termination. If all the conditions set forth in this Article 9 are not met
or waived on or before January 31, 2005, or such later date on which the
Parties may agree in writing, any Party may terminate this Agreement and
the transactions contemplated hereby, at any time after such date and with
immediate effect, in which case no compensation or indemnification, except
as specifically provided for under this Agreement, shall be owed by either
Party to the other.
ARTICLE 10
MISCELLANEOUS
10.1. Arbitration. Any disputes that may arise out of or in connection with this
Agreement shall be settled finally and exclusively by arbitration by a
single arbitrator appointed and proceeding in accordance with the Rules of
Arbitration of the International Chamber of Commerce. The arbitration
tribunal shall be located in Paris, France.
10.2. Language. All submissions and awards in relation to arbitration under this
Agreement shall be made in English and all arbitration proceedings and all
pleadings shall be in English.
10.3. Waiver; Enforcement. Any award made pursuant to this Article 10 shall be
final and not subject to appeal. The Parties hereby waive all challenges
to any such award. Any Party may present any such award in any court of
competent jurisdiction for enforcement. In any such enforcement action,
regardless of location, no Party will (and the Parties hereby waive any
right to) seek to invalidate or modify the decision of the arbitrators or
otherwise to invalidate or circumvent the procedures set out in this
Article 10. The Parties understand and agree that this Article 10 may be
specifically enforced by injunction or otherwise in any court of competent
jurisdiction.
10.4. Right to Set-off. Any amount payable by one Party to the other Party under
this Agreement that is not disputed by the other Party or that is the
result of an arbitration proceeding in accordance with this Article 10 may
be set off against any amount owed to such Party by such other Party under
this Agreement that itself is not disputed by the other Party or that is
the result of an arbitral or judicial process.
ARTICLE 11
INTERPRETATION; DEFINITIONS
11.1. Headings. The Article headings in this Agreement are for convenience of
reference only and shall not be deemed in themselves to have any
contractual value or particular interpretation.
38
11.2. Definitions. As used in this Agreement, the following terms shall have the
following meanings:
"2003 FINANCIAL STATEMENTS" has the meaning given to it in Section 4.7(a).
"2004 FINANCIAL STATEMENTS" has the meaning given to it in Section 4.7(b).
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such Person. As used in
this definition of Affiliate, "control" shall mean (a) the direct or
indirect ownership of more than fifty percent (50%) of the total voting
securities or other evidences of ownership interest of such Person, or (b)
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"AGREEMENT" has the meaning given to it in the preamble hereto and shall
be deemed to include all Annexes hereto.
"API" means Agencia Portuguesa para o Investimento.
"APPLIED ON A CONSISTENT BASIS" or "CONSISTENT BASIS" means, with respect
to the Company, except as otherwise herein provided, prepared using the
same accounting principles, policies, standards, practices and estimates
consistently used by the Company in prior periods and as used in the
preparation of the Company's most recent audited financial statements.
"BUSINESS DAY" means a day on which commercial banks and foreign exchange
markets settle payments and are open for general business (including
dealings in foreign exchange and foreign currency deposits) in New York
and Lisbon.
"CLAIM" has the meaning given to it in Section 7.4.
"CLAIM NOTICE" has the meaning given to it in Section 7.4.
"CLOSING" has the meaning given to it in Section 2.1.
"CLOSING CASH" means the sum of the Company's cash on hand (including cash
in immediately available funds) and amounts credited to the Company's bank
accounts as of the end of the day on the Closing Date (but excluding any
amounts that were credited but become uncollectible prior to the date on
which the Closing Statement becomes final).
"CLOSING DATE" has the meaning given to it in Section 2.1.
"CLOSING INDEBTEDNESS" means the total amount of Indebtedness of the
Company as of the end of the day on the Closing Date.
"CLOSING STATEMENT" has the meaning given to it in Section 1.4(a).
"COMPANY" has the meaning given to it in the recitals hereto.
39
"CONFIDENTIAL INFORMATION" means information concerning the business of
the Company (whether prepared by the Seller, the Company or otherwise and
irrespective of the form any such information is documented and
communicated) which has been or is furnished to the Purchaser, its
representatives or its professional advisers by or on behalf of the
Seller, including all notes, analyses, compilations, studies,
interpretations or other documents prepared by the Purchaser or its
representatives that contain or reflect in whole or in part, the
information furnished to the Purchaser, its representatives or its
professional advisers by or on behalf of the Seller; provided, however,
that Confidential Information does not include information which (i) is or
becomes available to the public other than as a result of a disclosure by
the Purchaser, its representatives or its professional advisers (or any
one of them), (ii) the Purchaser is able to establish was in its or any of
its representatives' or professional advisers' possession prior to it
being furnished by or on behalf of the Purchaser pursuant thereto, (iii)
becomes available to the Purchaser or any of its representatives or
professional advisers on a non-confidential basis from a source other than
the Seller, the Company or any of their representatives, provided that to
the Purchaser's knowledge such source is not bound by a confidentiality
agreement with or to the Seller or any other party with respect to such
information, or (iv) is developed by the Purchaser or any of its
representatives or professional advisers independently of information
provided by or on behalf of the Seller.
"CONTINGENCY PAYMENT STATEMENT" has the meaning given to it in Section
1.3(d).
"CONSENT" means any consent, waiver, approval, positive advice,
authorization, exemption, registration, license or declaration of or by,
or filing with, any Person.
"CONTRACT" means any agreement, contract, commitment or undertaking,
whether or not in writing, to which the Company is a party or made by or
given to the Company.
"DAMAGES" means all Liabilities, penalties, expenses, fees or actual
losses suffered by any party (including reasonable attorney's fees), in
each case after the application of any amounts recovered by that Party,
directly or indirectly, under insurance contracts or similar arrangements
(other than amounts recovered under such contracts or arrangements the
premiums of which are adjusted by an amount equal to any proceeds paid),
and after subtraction of any amounts recovered from third parties by the
damaged party, directly or indirectly.
"DECLARATION" means the consent of API, which is required under the
Government Incentive Contract, to the transfer to the Purchaser of the
capital stock in the Company held by the Seller.
"DEFERRED PAYMENT" has the meaning given to it in Section 1.2(c).
"EARN-OUT PAYMENT" has the meaning given to it in Section 1.3(a).
"EBITDA" means , with respect to any period, net income for such period,
plus interest, taxes (as determined below), depreciation and amortization
that would have been deducted in determining net income for such period,
subject to the following:
40
(a) Provisions for doubtful receivables, excess and obsolete inventory
and other risks and charges, all as recorded in general ledger
account 67 to 679, shall not be deducted in determining net income.
(b) Extraordinary costs and expenses unrelated to the normal operations
of the Company, including costs for restructuring and severance
payments to former employees and other costs and expenses, all as
recorded in general ledger accounts 69 through 698, shall not be
deducted in determining net income.
(c) Extraordinary income and gains unrelated to the normal operations of
the Company, including amortization of provisions and gains on the
sale of operating assets of the Company, and other income and gains,
all as recorded in general ledger accounts 79 through 798, shall not
be included in determining net income.
(d) For purposes of the definition of EBITDA, taxes shall be the amount
recorded in general ledger account 861.
(e) For purposes of the definition of EBITDA, interest shall include
other costs and financial expenses, as recorded in general ledger
accounts 68 through 688, reduced by income and financial gains as
recorded in general ledger accounts 78 through 788.
(f) Notwithstanding the foregoing, EBITDA shall not include income or
loss of Printglass or any other Person acquired by the Company after
the Closing Date, whether recognized by the Company through
recording equity earnings, dividend distributions or consolidation
accounting.
(g) Notwithstanding the foregoing, the Parties agree that, in relation
to Claims for indemnification by the Purchaser or the Company (or
their Affiliates) to the Seller (or its Affiliates),
(i) for amounts relating to such Claims that are accepted by the
Seller (i.e., Claims that are not in dispute), any amounts
paid by the Purchaser or the Company shall be deducted in
determining net income and any amounts received by the
Purchaser or the Company from the Seller (or its Affiliates)
shall be included in determining net income;
(ii) for amounts relating to such Claims that are disputed by the
Seller, such amounts shall only be deducted in determining net
income if (x) the indemnification Claims arise from Third
Party Claims, assessments or directives relating to Tax or
environmental issues, and (y) such amounts in the aggregate
equal or exceed six hundred thousand euro ((euro)600,000)
during a calendar year in the case of the Initial Earn-out
Calculation Period or during a consecutive four (4) quarter
period during the Extended Earn-out Calculation Period, in
which case the total amount of such Claims shall be deducted;
(iii) the Purchaser shall not be entitled to deduct internal costs
relating to any indemnification Claim; provided, however, for
the avoidance of doubt, that the Purchaser shall be entitled
to deduct legal counsel fees,
41
expert fees (subject to the Seller's consent to retaining such
expert, not to be unreasonably withheld), court fees and other
related third party expenses; and
(iv) any amounts deducted from or added to net income under this
Section (g) shall only be deducted or added one time;
provided, however, that if such addition or deduction is made
during the Extended Earn-out Calculation Period, it shall be
included in the calculations for four (4) consecutive four (4)
quarter periods.
"EBITDA START DATE" has the meaning given to it in Section 1.3(a)(iv).
"ENCUMBRANCE" means any mortgage, security interest, lien, pledge, claim,
right of first refusal, right to use or occupy, option, charge, covenant,
lease, order, Judgment, settlement, attachment or any other similar
restriction, except as fairly disclosed under relevant annexes to this
Agreement, and actually affecting title to the assets or rights related
thereto and their economic value.
"ENVIRONMENT" means soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins and wetlands), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life, and
any other environmental medium or natural resource.
"ESCROW AGENT" means Bilbao Viscaya Bank.
"EXTENDED EARN-OUT CALCULATION PERIOD" has the meaning given to it in
Section 1.3(a)(ii)(a).
"FINANCIAL STATEMENTS" has the meaning given to it in Section 4.7(b).
"GOVERNMENTAL AUTHORITY" means any government or governmental or
regulatory body or political subdivision thereof (or similar body),
whether supranational, federal, state, local or foreign, or any agency or
instrumentality thereof, or any court or arbitrator (public or private).
"GOVERNMENT INCENTIVE CONTRACT" means the contract listed on Annex 4.17
entered into between the Company, the Seller and API, dated July 14, 2003.
"GOVERNMENT INCENTIVE CONTRACT STATEMENT" has the meaning given to it in
Section 1.2(b)(i).
"INDEBTEDNESS" means, in each case as determined under Portuguese GAAP,
any: (i) amounts borrowed from any Person, whether or not under normal
commercial lending terms or upon the issue of bills, bonds or notes
(including, for the avoidance of doubt, all amounts borrowed under the
Government Incentive Contract and all balances between the Company and the
Seller or its Affiliates); (ii) monetary Liabilities (whether due or to
become due) under financial leases (other than financial leases relating
to vehicles, including trucks); (iii) monetary Liabilities (whether due or
to become due) in connection with receivables sold or discounted; (iv)
monetary Liabilities (whether due or to become due) under foreign exchange
contracts and all derivative instruments (including, without limitation,
any interest or currency
42
protection, hedging or financial future transactions); (v) monetary
Liabilities (whether due or to become due) under the Plan; and (vi)
accrued interest, prepayment penalties or other costs of discharge
relating to the matters set out in clauses (i) through (v).
"INDEBTEDNESS STATEMENT" has the meaning given to it in Section
1.2(b)(ii).
"INDEMNIFIED PARTY" has the meaning given to it in Sections 7.1 and 7.2.
"INDEMNIFYING PARTY" has the meaning given to it in Section 7.4.
"INDEPENDENT ACCOUNTANT" means a member firm of Pricewaterhouse Coopers
International Limited or such other accountant on which the Parties may
agree in writing.
"INITIAL EARN-OUT CALCULATION PERIOD" has the meaning set forth in Section
1.3(a)(i)(a).
"INITIAL PAYMENT" has the meaning given to it in Section 1.2(a)(i).
"INTELLECTUAL PROPERTY RIGHTS" means any patents, trademarks, trade names,
designs, copyrights and other similar industrial or intellectual property
rights.
"IVIMA" means Nova IVIMA - Industria do Vidro, SA.
"JUDGMENT" means any judgment, order, injunction, ruling, award or
administrative act of any court, arbitrator, judicial or administrative
authority or other Governmental Authority.
"LAW" means any statute, act, law, directive, code, regulation, rule,
order, decision or Judgment of any Governmental Authority.
"LIABILITY" means any liability or obligations of any nature, whether
known or unknown, accrued, absolute, contingent or otherwise, upon it
becoming due (except as otherwise specifically provided herein).
"MERGER NOTIFICATION" means the notification of the Transaction
contemplated under this Agreement to the relevant authorities in Brazil
under applicable Laws.
"NET SALES" means, with respect to any period, the amount invoiced during
such period to customers for products and services (net of Value Added
Tax), less deductions allowed or accrued for discounts, returns, price and
quality differences, and annual bonus incentive programs (rappel), in each
case as recorded in general ledger accounts 71 through 729.
"ORDINARY COURSE OF BUSINESS" means (i) the usual, regular and ordinary
course of the business conducted by the Company consistent with past
practice and custom, and (ii) all transactions being conducted on an arm's
length basis.
"ORIGINAL SHARES" has the meaning given to it in Section 1.1(a)(i).
"PARTY" and "PARTIES" have the meanings given to them in the preamble
hereto.
43
"PERFORMANCE PAYMENT" has the meaning given to it in Section 1.2(c).
"PERMIT" means any permit, license or similar instrument, in each case as
required for the Company to carry out in all material respects its
business substantially as currently conducted.
"PERMITTED ENCUMBRANCES" means (i) liens for Taxes not yet due, (ii)
warehousemen's, mechanics', carriers', landlords', employees', repairmen's
or similar liens imposed by applicable Law, created in the Ordinary Course
of Business and for amounts not yet due and payable, (iii) minor
imperfections of title or minor Encumbrances that in the aggregate do not
materially detract from the value of the property subject thereto or
impair in any material respect the use of the property subject thereto,
and (iv) leases of property owned by the Company.
"PERSON" means any individual, partnership, corporation, trust,
unincorporated organization, Governmental Authority or other entity.
"PLAN" has the meaning given to it in Section 4.20(b).
"PORTUGUESE GAAP" means the generally accepted accounting principles
applicable in Portugal and accounting rules and regulations applicable to
the Company.
"PRINTGLASS" means Printglass - Transformacao ▇▇ ▇▇▇▇▇ LDA.
"PROCEEDING" means any legal, administrative, arbitration or other
alternative dispute resolution suit, action, investigation, inquiry or
other proceeding initiated by any Person, Governmental Authority or other
party.
"PURCHASER" has the meaning given to it in the preamble hereto.
"RELATED PERSON" means, with respect to any entity, any stockholder,
member of the board of directors or officer of such entity or any relative
of any such person.
"RELEASE" means any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing into the Environment,
whether intentional or unintentional.
"REMAINING SHARES" has the meaning given to it in Section 1.1(a)(ii).
"REMAINING SHARES ESCROW AGREEMENT" has the meaning given to it in Section
1.2(d).
"REMAINING SHARES PURCHASE DATE" has the meaning given to it in Section
1.1(a)(ii).
"SELLER" has the meaning given to it in the preamble hereto.
"SELLER'S CLOSING STATEMENT OBJECTION" has the meaning given to it in
Section 1.4(b).
"SELLER'S CONTINGENCY PAYMENT OBJECTION" has the meaning given to it in
Section 1.3(d).
44
"SHARES" has the meaning given to it in the recitals hereto.
"SOCIAL" means related to Social Charges.
"SOCIAL CHARGE" shall mean any social security contribution and any other
charge or liability relating to employment, including contributions
relating to unemployment, medical costs, disability, death, pensions,
retirement and vacation.
"SUBSIDY" means any governmental, quasi-governmental or other public and
private grant or subsidy that provides any reimbursement, refund,
abatement, Tax reduction bonus, exemption, discounted loan, rebate or
other advantage or benefit, including without limitation, the Government
Incentive Contract.
"TAX" and "TAXES" mean any taxes and more generally any mandatory levies
(including their principal amount and, as the case may be, penalties,
surcharges and interest thereon) whatever their legal characterization and
beneficiary may be, including, without limitation: (i) corporation taxes,
withholding taxes, Value Added Tax (V.A.T.), excise taxes, property taxes,
business taxes, custom duties, transfer and contribution taxes, stamp
duty, registration taxes and any taxes based on salaries, (ii) any duty
paid in consideration for a service provided to the Company, (iii) any
Liability (whether due or to become due) of the Company determined on the
basis of any tax or by reference to any taxable basis, and (iv) any tax
due by a Person other than the Company and for which the Company would be
liable. Where used as an adjective, "TAX" means related to Taxes.
"TOTAL PAYMENT AMOUNT" has the meaning given to it in Section 7.9.
"TRANSACTION" means the sale and transfer of the Shares pursuant to this
Agreement and all (i) actions to be taken and (ii) transactions and
agreements to be entered into, pursuant to this Agreement.
"THIRD PARTY CLAIM" has the meaning given to it in Section 7.5(a).
"THIRD PARTY CLAIM NOTICE" has the meaning given to it in Section 7.5(a).
"U.S. GAAP" means generally accepted accounting principle in the United
States.
ARTICLE 12
GENERAL PROVISIONS
12.1. Cooperation. Each of the Parties shall make every effort to ensure that
all measures necessary or useful for the completion of the Transaction are
taken in a timely manner. Each of the Parties shall also take all
necessary steps to permit the other Party and its attorneys to ascertain
the satisfactory performance of all of its undertakings made herein.
12.2. Announcements. After the date hereof, the Parties shall not issue or cause
the publication of any press release or other announcement with respect to
this Agreement or the Transaction without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, in the event any such press release or
announcement is required by or warranted (in the
45
opinion of legal counsel) under applicable Law to be made by the Party
proposing to issue the same, such Party shall use its best efforts to
consult in good faith the other Party before the issuance of any such
press release or announcement.
12.3. Assignment.
(a) Any Party may transfer some or all of its rights and obligations
under this Agreement to any of its Affiliates, provided that such
Party remains jointly liable for all obligations under this
Agreement.
(b) This Agreement and the rights and obligations arising out of it
shall not otherwise be transferable, either in whole or in part,
without the prior written consent of the other Party.
12.4. Third Party Beneficiaries. The Parties intend the Company to be a
third-party beneficiary of this Agreement and for it to remain a
third-party beneficiary of this Agreement, notwithstanding any sale of any
or all of the Shares to any third party. Except for the foregoing, nothing
expressed or implied in this Agreement is intended or shall be construed
to confer upon or give any Person other than the Parties and their
successors and assigns any rights or remedies under or by reason of this
Agreement.
12.5. Entire Agreement. This Agreement (including the annexes hereto) represents
the entire agreement existing between the Parties relative to the subject
matter hereof and supersedes all previous negotiations, discussions,
correspondence, communications, understandings and agreements between the
Parties relating to the subject matter of this Agreement. This Agreement
may not be amended except by a written instrument signed by the Parties.
12.6. Severability. If any provision of this Agreement is held to be invalid in
whole or in part, the validity of the remaining provisions of the
Agreement shall not be affected thereby. In such event, the Parties shall,
to the extent possible, substitute for such invalid provision a valid
provision corresponding to the spirit and purpose thereof.
12.7. Notices and Communications. All notices and other communications required
under or in connection with this Agreement shall be in writing and, except
as otherwise expressly provided herein, shall be deemed to have been given
when delivered in person, on the date of confirmed delivery by a
nationally recognized overnight courier service, or in any other case upon
actual receipt by the intended recipient. All such notices and other
communications shall be dispatched to the appropriate Party at the address
specified below:
If to the Purchaser, to:
Libbey Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇.▇.
Attention: General Counsel
46
With a copy to:
Libbey Europe ▇.▇.
▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attention: Managing Director
If to the Seller, to:
VAA - Vista Alegre Atlantis SGPS, SA,
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇-▇(▇▇▇▇▇▇),
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Attention: General Counsel
or to such other addressee as the addressees above shall indicate to the
other Party in accordance with the provisions of this Section 12.7.
12.8. Costs. Unless otherwise stipulated herein, each Party shall be responsible
for the payment of all fees and costs incurred by it in connection with
this Agreement and the transactions contemplated hereby, including the
fees and disbursements of their respective financial advisors, accountants
and counsel.
12.9. No Waiver. The failure to exercise or delay in exercising a right or
remedy under this Agreement shall not constitute a waiver of the right or
remedy or a waiver of any other rights or remedies and no single or
partial exercise of any right or remedy under this Agreement shall prevent
any further exercise of the right or remedy or the exercise of any other
right or remedy.
12.10. Specific Performance. The performance of any of the obligations under
this Agreement shall be subject to specific performance ("Execucao
Especifica") as set forth in article 830(0) of the Portuguese Civil Code,
if applicable.
12.11. Governing Law. This Agreement shall be governed by the Laws of Portugal.
47
Done in Lisbon, on January 10, 2005 in two original copies.
VAA-VISTA ALEGRE ATLANTIS SGPS, SA
by: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ e ▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ e ▇▇▇▇▇
Title: Chairman of the Board of Directors
VAA-VISTA ALEGRE ATLANTIS SGPS, SA
by: /s/ Rui ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------------------
Name: Rui ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
LIBBEY EUROPE B.V.
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
LIBBEY EUROPE B.V.
by: /s/ ▇▇▇ ▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇ ▇▇▇▇
Title: Managing Director
48
CLOSING ACKNOWLEDGEMENT
CLOSING ACKNOWLEDGEMENT, dated as of January 10, 2005, by and among VAA -
Vista Alegre Atlantis SGPS, S.A., a sociedade anonima duly incorporated and
organized under the laws of Portugal with its registered office at ▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇, ▇-▇(▇▇▇▇▇▇), ▇▇▇▇-▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (the "SELLER") and Libbey
Europe B.V., a company organized under the laws of the Netherlands with its
principal place of business at ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(the "PURCHASER" and, each of the Seller and the Purchaser, a "PARTY").
Capitalized terms used but not defined herein have the meanings specified in the
Stock Promissory Sale and Purchase Agreement (the "PURCHASE AGREEMENT") entered
into by the Seller and the Purchaser on the date hereof.
The Purchaser hereby represents that each of the conditions to Closing in
Sections 9.1 and 9.3 of the Purchase Agreement have been fulfilled and the
Seller does not need to provide any waivers thereunder. The Seller hereby
represents that each of the conditions to Closing in Sections 9.1 and 9.2 of the
Purchase Agreement have been fulfilled and the Purchaser does not need to
provide any waivers thereunder, except in relation to the following sections of
the Purchase Agreement:
a) the covenant contained in Section 6.11, compliance with which is
required by Section 9.2;
b) the representations contained in Sections 4.4 and 4.9, compliance
with which is required by Section 9.2(a), and the covenant contained
in Section 6.13(a), compliance with which is required by Section
9.2(b), to the extent that these sections relate to the Microsoft,
BAAN licenses or other software licenses; and
c) Section 9.2(f).
The Purchaser hereby waives, as a condition to Closing, fulfillment of
Sections 6.11, 6.13(a) and 9.2(f) and compliance with Sections 4.4 and 4.9, and
the Seller hereby covenants to (a) provide as soon as possible but in no event
later than seventy-five (75) days from the date hereof the transfer pricing file
and any other documentation and information relating thereto required by the
relevant Governmental Authority; (b) secure as soon as possible but in no event
later than thirty (30) days from the date hereof the software licenses mentioned
above in the name of the Company; and (c) provide as soon as possible but in no
event later than thirty (30) days from the date hereof a statement from ▇▇▇▇▇▇▇▇
▇▇▇▇ GmbH & Co. The Seller acknowledges that it will be liable for any
penalties, fines, and costs relating to such transfer file, the securing of the
software licenses and the use of the software prior thereto, and the costs of
the statement from ▇▇▇▇▇▇▇▇ ▇▇▇▇ GmbH & Co. The Seller further agrees that
Sections 7.7 and 7.8 of the Purchase Agreement shall not apply to any Claims in
relation to any of the above and that Section 7.9 shall not apply to Claims in
relation to the transfer pricing file.
The Parties acknowledge that the Closing is occurring on the date hereof.
The Parties further acknowledge that, on the date hereof, the Purchaser is
giving an irrevocable transfer order for payments for the Company's account in
the following amounts to the following entities, which amounts are included on
the Indebtedness Statement provided by the Seller and are being deducted from
the Initial Payment pursuant to Section 1.2(a)(i): two million
49
two thousand two hundred seventy-four euro and eleven cents ((euro)
2,002,274.11) to Banco Espirito Santo SA; one million two hundred eighty-nine
thousand three hundred fifteen euro and sixty-six cents ((euro) 1,289,315.66) to
Fortis Bank; and one million five hundred eighty-nine thousand four hundred
ninety-seven euro and twelve cents ((euro) 1,589,497.12) to Banco BPI, SA. In
accordance with Section 1.2(a)(i) of the Share Purchase Agreement, the Purchaser
is giving an irrevocable transfer order for payment to the Seller in the amount
of sixteen million one hundred one thousand five hundred sixty-nine euro and
nine cents ((euro) 16,101,569.09) on the date hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Closing
Acknowledgement as of the day and year first above written.
VAA-VISTA ALEGRE ATLANTIS SGPS, SA
by: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ e ▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ e ▇▇▇▇▇
Title: Chairman of the Board of Directors
by: /s/ Rui ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------------------
Name: Rui ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
LIBBEY EUROPE B.V.
by: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
by: /s/ ▇▇▇ ▇▇▇▇
------------------------------------------------------
Name: ▇▇▇ ▇▇▇▇
Title: Managing Director
50
Annex 2.2(c)
[LIBBEY LETTERHEAD]
January 10, 2005
To: VAA - Vista Alegre Atlantis SGPS, SA
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇-▇(▇),
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Libbey Inc. (the "Guarantor") hereby refers to the Stock Promissory
Sale and Purchase Agreement by and between VAA - Vista Alegre Atlantis SGPS, SA
(the "Seller") and Libbey Europe B.V. (the "Purchaser"), dated January 10, 2005
(the "Purchase Agreement"). Terms used but not defined herein shall have the
meaning given to them in the Purchase Agreement.
The Guarantor hereby constitutes itself jointly and severally liable,
together with the Purchaser, with respect to the due and punctual payment, if
and when such payment becomes due and payable, of the Earn-out Payment under
Section 1.3 of the Purchase Agreement, waiving any rights of prior execution of
Purchaser's assets (beneficio de excussao previa) pursuant to Article 638 of the
Civil Code (the "Guarantee").
The Guarantor agrees that the following terms and conditions shall
apply to the Guarantee:
1. Procedure. If and when the Purchaser shall fail to pay the Earn-out
Payment (if and when such payment becomes due and payable), the
Guarantor shall pay such amount to the Seller upon its first
demand. The Seller shall make such demand by providing a written
notice to the Guarantor to the effect that the amount that has
become due and payable has not been paid by the Purchaser within
the time provided in the Purchase Agreement. Except as provided in
this Section 1, the Seller shall not be required to give notice to
or exercise any right or remedy against the Purchaser or to take
any other step prior to making a demand under this Guarantee.
2. Guarantee of Payment. This Guarantee constitutes a guarantee of
payment when due.
3. Amount of Payment. The amount of any Earn-out Payment due to the
Seller shall be reduced by (a) any amounts the Purchaser is
permitted to set-off under Section 10.4 of the Purchase Agreement,
and (b) any partial payments of the Earn-out Payment made by the
Purchaser in accordance with the Purchase Agreement.
4. Terms of Payment. All payments due under this Guarantee shall be
paid by the Guarantor to the Seller within seven (7) days following
notice by the Seller in accordance with Section 1. All such
payments shall be made in euros, for same day value, by wire
transfer to the bank account notified in writing by the Seller to
the Guarantor in such notice.
5. Representations and Warranties. The Guarantor represents and
warrants that the following statements are true, valid and correct
as of the date hereof and will remain true, valid and correct
during the Term of this Guarantee:
(a) The Guarantor is a corporation duly organized and validly
existing under the Laws of its jurisdiction of incorporation.
(b) The Guarantor has the power and authority to enter into this
Guarantee and to carry out its obligations hereunder. The
Guarantor has duly authorized the execution of this Guarantee
and no other corporate action on the part of the Guarantor is
necessary to authorize the execution by it of this Guarantee.
(c) This Guarantee has been duly executed by the Guarantor and
constitutes a legal, valid and binding obligation of the
Guarantor, enforceable against it in accordance with its
terms.
6. Term. This Guarantee shall remain in full force and effect until
the Earn-out Payment, if any, has been paid in full to the Seller.
7. Governing Law; Arbitration. This letter shall be governed by the
laws of Portugal. Any disputes that may arise out of or in
connection with this letter shall be settled finally and
exclusively by arbitration by a single arbitrator appointed and
proceeding in accordance with the Rules of Arbitration of the
International Chamber of Commerce. The arbitration tribunal shall
be located in Paris, France.
8. Entire Agreement. This letter represents the entire agreement
existing between the Guarantor and the Seller relative to the
subject matter hereof and supersedes all previous negotiations,
discussions, correspondence, communications, understandings and
agreements between the Guarantor and the Seller relating to the
subject matter of the Guarantee. This letter may not be amended
except by a written instrument signed by the Guarantor and the
Seller.
9. Assignment. The Seller may transfer some or all of its rights under
this Guarantee to any of its Affiliates. The rights of the Seller
under this Guarantee shall not otherwise be transferable, either in
whole or in part, without the prior written consent of the
Guarantor.
10. Notices. All notices and other communications in connection with
this Guarantee shall be in writing and, except as otherwise
expressly provided herein, shall be
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deemed to have been given when delivered in person, on the date of
confirmed delivery by a nationally recognized overnight courier
service, or in any other case upon actual receipt by the intended
recipient. All such notices and other communications shall be
dispatched to the appropriate party at the address specified below:
If to the Guarantor, to:
Libbey Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S.A.
Attention: General Counsel
With a copy to:
Libbey Europe ▇.▇.
▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attention: Managing Director
If to the Seller, to:
VAA - Vista Alegre Atlantis SGPS, SA
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇-▇(▇)
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Attention: General Counsel
or to such other addressee as the addressees above shall indicate
to the other party in accordance with the provisions of this
Section 10.
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IN WITNESS WHEREOF, the Guarantor has executed this letter as of the
date first written above.
LIBBEY INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------
Title: Managing Directory
------------------
ACKNOWLEDGED AND ACCEPTED
VAA - VISTA ALEGRE ATLANTIS SGPS, SA
By: ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ e ▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ e ▇▇▇▇▇
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Title: Chairman of the Board of Directors
----------------------------------
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